Market Trends
Whats up with the market?
Is it so wrong to be a real estate broker who is tired of looking at Market Reports? Personally they give me a headache, and no matter how many charts I look at from Jonathan Miller I still need someone to explain them to me repeatedly.
After reading reports Prudential Douglas Elliman, Corcoran, Brown Harris Stevens, and Core Group along with commentary from Crain’s, The New York Times, and The Real Deal; I began to long for simpler times when we sold homes not ‘investment vechicles’. In the end this is what I took away.
Positive
- Transaction levels back to normal by end of year.
- Condominium sales are starting to out number co-ops again.
- Median price stable at $810,000 over the past five quarters.
- Inventory down 25% since this time last year
- Up to 4000 pending deals set to close first quarter 2010
Negative
- Average price per square foot same as the fourth quarter of 2006.
- Biggest % price decrease, was for larger lofts over 2500sq.ft. dropping 41% since last year, re-inforcing a trend that room count is more important than size.
Our personal experience of the market at the end of last year was one of many buyers chasing the 30% of apartments that were priced correctly to the market, resulting in multiple bids. This is continuing in January.
Recent contracts and sales signed include.
- Lower Fifth Ave two bedroom pre-war bid up $100,000 above asking after one week on the market.
- In Soho 76 Crosby 2A in contract within a week on the market.
- Lenny Kravitz’s infamous penthouse at 30 Crosby after years.
- High floor facing Central Park asking 14.575m within a month.
- 7 Hubert street, penthouse closed 1/10 for 11.5million.
- 92 Charles in the Village closed 1/23 for 13.5mil.
Even if you are not a buyer or seller at the high end of the market, the fact that so much property is selling at these prices brings a level of confidence back to Manhattan Real Estate. A positive sign for at least the near future. If you want more information you know where to find us.
Signs of a Bottom?
What a difference a month makes. At the end of June when the various Brokerages released their market reports we were coming off a pretty dismal Spring and it was difficult to look forward with any optimism. However, in the last thirty days there has definitely been a change in the ’tone’ of the market.
For one we are very busy. Appointment requests are up across the board. It is harder to get appointments to show other brokers exclusives than it has been over the last nine months, because their days are also booked, a sign that they too are busy.
We are seeing an increase in signed contracts and multiple bids on competitively priced properties. Most notably the luxury market is starting to move because sellers are negotiating prices and facing up to the reality of the market. Buyers will step up for a discount. An prime example of a developer facing reality is Donald Trump’s twenty million dollar price reduction on the penthouse at 502 Park Avenue.
Nationwide the price dip from the high of 2006 to the Spring of 2009 was about 29%. NYC took that hit in three quarters as opposed to three years.
Inventory levels have declined throughout the country over the past three months as buyers have stepped forward to take advantage of bargain prices and low interest rates. New York City inventory peaked in June and is in decline ever since. This is the combination of unrealistic sellers leaving the market and contracts signed, but the result is the same; less to sell.
For another opinion on the market, check out the Luxury Letter from our colleagues, Leonard Steinberg and Herve Senequier here at Elliman.
New York City Real Estate Market
Last week the major brokerages released their market reports and the news was grim.
- Overall transactions down over 50%
- Closings over 10mil down 82%
- Loft sales down 73%
- Average sales price down 28%
- 3081 transactions in the second quarter of 2008
- 2727 transactions in the first six months of 2009
The majority of sales were under a million dollars so this is where we have the most transparency. It is the only area of the market that is ‘normal’ with enough transactions to give a clear valuation. In our business we see that if a property is priced correctly (25%-30% discount for the market) it will attract multiple bids.
The higher the price the more frozen the market becomes. There are so few sales that sellers cannot get a clear direction and so remain in limbo. This will be the status quo until jumbo mortgages return.
Predictions:
- Value is hot and excess is not.
- Luxury will always be with us. However the definition of luxury has changed.
- Room count is more valuable than square footage. No one wants to pay up for a 2000 square-foot, two bedroom loft if a 1500 square-foot apartment is less money.
- We are not at the bottom of the market.
- Brokerage firms will reduce the sizes of their offices and close some.
Credit: Jonathan Miller: Matrix
Prudential Douglas Elliman Real Estate Market Overview
