How Much Further Down: 1BR Condos UES/UWS???

hopefully not

I think that's the million dollar question. And I think there are tons of answers, many of them conflicting. Some say prices will fall no further, while others say a lot further. Frankly, they're all guessing -- some guesses are more educated than others, but no one has a crystal ball.

The consensus seems to be that prices are either going to (1) keep going down for a while or (2) stabilize here. Some people think that prices have already hit bottom and will go up from here, but I think they may be in the minority. I think I've heard more "bears" than "bulls" on here lately -- but that may or may not mean anything.

So, to summarize, prices will either (a) fall, (b) stay the same, or (c) rise. Which...yeah, doesn't really tell you anything. But if anyone ever definitively figures out the answer, I'd love to know.

You will never be able to time the bottom of the market. It's impossible, do your best to find a comfortable price range for yourself and try and act when you can get what you want in your price range. If you wait for the bottom you'll most certainly find out after prices are on their way up.

> Hasn't the studio/1BR market almost bottomed out by now?

Actually, its declined less than 2bed/3 bed.

I say you've got another 10% and 18 months.

I think the low end has been artificially held up by low interest rates and (how can I put this nicely?) less sophisticated buyers combined with sellers who are more sensitive to losses and therefore more willing to try to wait things out.

I expect continued 5-10% declines for a few more years.

looking2return that is a very good point. I think there have been small pools of buyers waiting to time the market and some cannot believe some of the price drops...hence purchasing. I'm thinking we're going to see more drops but how much is the question.

studio apartments in prime locations have not dropped very much...

e.g.

1965 Broadway

06/26/2009 #21J $682,500 -9.0% $750,000 1 bed 1 bath 634 ft�
05/15/2007 #10J $799,000

That's a 15% drop, not including the >10 floor difference. Still price has to drop under $500k for cash to be equivalent to rent (same lines are renting for $3000-3500) - that is if you believe equilibrium is rational.

Your situation may vary but I use cash flow to decide how much to pay b/c I'm not going to be living in a 1 bdroom indefinately. In the future (possibly < 5 yrs) I'll either have to sell or rent it out and in this scenario the cash flow math becomes quite important. If you know you will stay for at least a decade or two, then it probably doesn't really matter when you buy, but you'd get a better deal with a coop.

"Actually, its declined less than 2bed/3 bed.

I say you've got another 10% and 18 months."

WHAT? Weren't you clinging to that 40% DB report put out by Karen Weaver recently as if it was the bible? You went frm 40% to 10%?

HSW - anecdotes are fun but don't necessarily reflect the market overall. So maybe 10J overpaid. Or maybe the apartment came with full interior furnishings. Or maybe, despite appearing to be in the same line, 10J is actually a larger apartment (a lot of the older buildings thin out as you go up). I think the only number that matters is the average ppsf, and more specifically the average ppsf for comparable neighborhood and product type. These numbers are down across the board and range from between 5 and 30% depending on factors above.

As for the original question - nobody knows. I think the prevailing wisdom is, if you find a property you think you will be in for a while, you get a great deal, and you can afford it, may not be the worst time to make the commitment.

We could get to the point where people realize that buying a one bed or studio coop is not a smart thing to do at all. They couldn't give them away before 2000. Price to rents in the single digits. Buy and rent returns in the double digits.

funny, because in my LES co-op, apts. were selling like hotcakes prior to 2000. once again you have no clue what your talking abut.

If you think prices are going anywhere but down you lack a grasp of the obvious.
Unemployment up, foreclosures up, inventory plentiful, credit availability scarce equals lower prices. It's so obvious that prices go lower from here.

There goes Rhino with his incorrect information again. Price to rent in the single digits in 1999?? Sure . . .

I think Julia is right. Studio apts. in prime locations have not dropped much. They are affordable to a greater number of people and remain in demand. They arn't strictly starter apartments for kids out of school. Retired people sell their 2 bedroom, get rid of their mortgage and slash their maintenance by 60%, childless couples, retired couples, peid a terres, people buying for their moms. Anyone can afford it-the McDonald's effect. The PSF is a bargain. People with money buy them for storage, household help, to combine with their existing apt or for guestrooms. In my building they get snapped up.

this is a great listing (for history, if not the unit itself), a one bedroom listed at less than $400k. it is representative, i believe, of the price movement i am now seeing, priced less than a mid-2006 price, and yet demonstrates how much higher prices are than 2004. you have to remember that many of the smaller units, especially the one bedrooms, are closing at around $80-100k below list, so when you are looking, if not at recorded sales, that must be accounted for.

http://www.streeteasy.com/nyc/sale/440453-coop-345-east-93rd-street-yorkville-new-york

06/18/2004 Previous Sale recorded for $295,000.
02/07/2006 Previously Listed in StreetEasy, but no longer available, by Corcoran at $449,000.
08/21/2006 Corcoran Listing sold. Last priced at $429,000.
08/21/2006 Previous Sale recorded for $415,000.
07/25/2009 Listed in StreetEasy by Corcoran at $395,000.

"I say you've got another 10% and 18 months."

oh wow! What caused you to change your outlook?

I was curious to know because I see a buying "frenzy" now in the 1BR condo market. Also, I keep getting out bid even though I use PPSF and other sales in the building as points of reference.

In addition, there is talk now of an economic recovery and stabilization. This seems to signal an end in sight for further decline (while leaving the possibility of the market becoming flat).

I know that housing is one of the last market to rebound in general, but NYC will most likely be one of the first RE markets to bounce back.

Thoughts on this?

what is your definition of a frenzy?

"frenzy": over the last two months i've seen many apartment listed in SE only to be sold a week or two later. a lot of inventory seemed to move in May/June/July. Perhaps it was my perception, but there was certainly an upswing for a bit. Anything that appeared to have value in the PPSF category moved quickly (or so it appeared).

I also would tend to agree with Julia. There have been some price cuts and there is some room to negotiate (especially if the listing has been lingering on the market), but don't expect dramatic declines for studios and 1 Brs.

what is a reasonable % to ask off the current apt price (given that there isn't something glaring)

nyc_ace, i see many one bedrooms getting bought at 2005-06 prices, sometimes more, sometimes less. a number of first time buyers seemed to have been drawn in by the increased inventory and lower prices of the late spring, along with the very low mortgage rates and the fear of rising rates in the future. i don't know if that volume of entry-level purchasing is sustainable in the near term. and we have two-ish more months to wait to see what the quarterly reports will say, as now we are in the much slower portion of the summer.

NYC real estate lags the rest of the country. The first real estate markets to bounce back are those which peaked earliest, and in this downturn, had the most foreclosures clearing out price levels much faster. NYC is very likely to be one of the latter markets to bounce back, as mortgage and other credit issues move up the food chain.

hotproperty...you make it sound $450k for a one room apartment is a bargain...marvyboy...i do see big drops in places like lincoln square but i doubt if i'll ever get a studio again for $150k.

ace: what is your definition of "a lot?" can you link to three or four examples of apts being sold within two weeks of original listing?

@columbiacounty - perhaps some of it was perception, but i watched a lot of properties go into contract right around the same time. Here is a good example (most of the building moved in a two month spread):

http://www.streeteasy.com/nyc/building/78-leonard-street-new_york

My queries were very widespread across Manhattan and I doubt I can come up with more information. I really can only say that I watch a lot of properties move. Much more than I expected.

Hang tight. 1br condos were 350k, not so long ago on UWS.

ace: so "a lot" means one 1 br in one building? who are you kidding?

julia, you'll get your one bedroom for $300k.

I'm going to use this as a comps thread for small units, since they rarely get picked up on the other comps thread and seem to be less neighborhood dependent for pricing (except new development, which isn't the point here). Not trying to just list the cheapest, trying to show movement.

Here's a bing and bing that saw some fairly large price reductions. 12H sold in 03/05 at $715k. A caveat is that sometimes, particularly in pre-war and new developments, apartments get larger as the floor is higher, but the pricing wouldn't indicate that here.

http://www.streeteasy.com/nyc/sale/378387-coop-220-east-73rd-street-upper-east-side-new-york

01/31/2009 Listed in StreetEasy by Corcoran at $795,000.
02/27/2009 Price decreased by 14% to $685,000.
04/06/2009 Price decreased by 5% to $650,000.
05/11/2009 Price decreased by 4% to $625,000.
05/21/2009 Listing entered contract.
07/20/2009 Listing sold.
07/20/2009 Sale recorded for $595,000.

@columbia - no, that was the example. but i've been querying manhattan for the past 6 months or so. I can't recreate my search queries at this time to show the trend nor do i really have the time to do so. but that was just one self-contained example of a lot of properties moving in a relatively short period of time. I can only tell you that you'll see when the numbers come out that there was a uptick, perhaps not earth shattering, but there was an uptick. I'm sure there are other on this site who have more data to support that.

This one needs a probably extensive renovation, and there are no direct comps, but it is $527 psf with very reasonable mtc. Has a small, separate dining nook (8x8) that could accomodate a baby, particularly as the other rooms are spacious and the closets are ample.

http://www.streeteasy.com/nyc/sale/375652-coop-49-east-96th-street-carnegie-hill-new-york
01/16/2009 Listed in StreetEasy by Corcoran at $639,000.
03/13/2009 Price decreased by 8% to $589,000.
04/29/2009 Listing entered contract.
07/20/2009 Listing sold.
07/20/2009 Sale recorded for $527,320.

This one's down to an early '06 price.

http://www.streeteasy.com/nyc/sale/385694-coop-302-east-88th-street-yorkville-new-york
04/28/2006 Previous Sale recorded for $482,000.
02/19/2009 Listed in StreetEasy by Halstead Property at $535,000.
03/03/2009 Price decreased by 7% to $500,000.
05/14/2009 Listing entered contract.
07/17/2009 Listing sold.
07/17/2009 Sale recorded for $485,000.

Larger alcove studio back to early 2005 price.

http://www.streeteasy.com/nyc/sale/391126-coop-200-east-74th-street-upper-east-side-new-york

06/28/2005 Previous Sale recorded for $390,000.
03/11/2009 Listed in StreetEasy by Corcoran at $399,000.
04/30/2009 Listing entered contract.
07/17/2009 Listing sold.
07/17/2009 Sale recorded for $395,000.

@aboutready - i noticed your examples are in the co-op market. do you see the same results in the condo market?

6C sold for about 10% less, $350k, in mid-04. small one bedroom, pre-war.

http://www.streeteasy.com/nyc/sale/379383-coop-160-east-91st-street-carnegie-hill-new-york
02/04/2009 Listed in StreetEasy by Stribling at $430,000.
03/17/2009 Price decreased by 7% to $399,000.
04/28/2009 Listing entered contract.
07/16/2009 Listing sold.
07/16/2009 Sale recorded for $385,000.

nyc_ace, i'm just trolling recorded sales and listing them as i find them. but no, i'd think not. financing is much easier for established condos, and they've always been priced higher psf at the lower-end market. but i've been seeing some condo movement on the uppers in the jr4 and 2 bedroom markets. i would guess that this fall/winter you'll see some in the smaller condos as well.

i think a lot of properties moved, but i'm not so certain that the movement will demonstrate a stabilization in pricing. i'm just not seeing it.

@aboutready - I agree with you. I equate this to people buying a stock as it's on it's way down. It will still continue to fall and as it does so it picks up some volume momentum (sales) because people see an opportunity. I think from a macro perspective things will begin to stabilize sooner rather than later (but that's just a guess like everyone else).

in regards to the condos, that's precisely the question. to what extent will they continue to fall.... will they go back to 2004/2005 prices or not really.... just curious what your take is...

ace: how many times did you get outbid in the last 30 days?

twice

ace, it depends on what kind of props occur in the market, incentives, underwriting, ability of developers to delay adding to active inventory, bankruptcies, whether there is another leg down for the economy after this inventory correction, un and underemployment. but my core belief is that, especially given the glut of condos (and brooklyn will compete with manhattan for the younger buyer, particularly at the right price) and rentals, further declines are inevitable, it's just the timing that may be at issue.

foreign demand is much, much lower, and if you look at recorded sales in a few mid-town buildings particularly, the buyers are a veritable representation of the UN. inventory is still increasing. real wages have been stagnant the last nine years and are currently on the verge of declining. the financial, legal and medical fields, as well as advertising, sales, real estate, IT and consulting, have all contracted significantly. household creation has been severely slowed and the current crop of newcomers to the city is much reduced. given the prior increase in demand being more than offset by the overall increase in supply, i don't see where any of the increase in pricing from 2000 forward is sustainable. particularly if interest rates rise. there have been some who have said that a rate increase might not have a great impact, but i certainly can't see that in this market segment.

OTNYC, are we talking about the same building? Both 10J and 21J have exactly the same floor plan at 634 sq ft. And you think the Grand Millenium is an older building?

aboutready: i agree with you that a rate increase would substantially push the prices lower in our current economic climate. if the current interest rates are maintained, i think that things will stabilize and flatten by the Q2 of 2010 (but that's a guess based on what i read in the news and based on how the Dow has been performing over the last 6 months).

i just didn't (and don't) expect prices to go back to 2000 levels. while I wish prices would drop that low -- it would be fantastic for me! -- i just do not expect it.

i guess it's impossible to expect. but think about it. we had a recession and 9/11. then suddenly prices went zooming into the stratosphere. why? what caused it? i had my apartment on the market for 6 months starting fall 2002, not a single offer. same apartment, no new renovations, put on the market at a higher price fall 2003, sold in one day with multiple offers above asking.

a sutton area large one bedroom, again with a separate dining area that could work for a baby. 10B sold mid-2005 for $700k. this one went into contract, and then back out, probably resulting in a lower price. high maintenance for a one bedroom, but probably not unusual for the neighborhood.

btw, these prices still seem very high to me. i'm just showing movement similar to the movement seen in the market for larger units.

http://www.streeteasy.com/nyc/sale/348738-coop-36-sutton-place-south-sutton-place-new-york

09/13/2008 Listed in StreetEasy by Prudential Elliman at $800,000.
10/08/2008 Listing entered contract.
01/27/2009 Price decreased by 6% to $750,000.
01/28/2009 Re-listed by Prudential Elliman.
03/03/2009 Price decreased by 7% to $699,000.
05/07/2009 Listing entered contract.
07/16/2009 Listing sold.
07/16/2009 Sale recorded for $600,000.
07/27/2009 Listing sold.

alcove studio, only same line comp is 2004, appears to be roughly the same size as the b line, also an alcove studio line, which would make this an early 2005 price.

http://www.streeteasy.com/nyc/sale/216375-coop-220-east-67th-street-lenox-hill-new-york

04/11/2008 Listed in StreetEasy by Prudential Elliman at $429,000.
04/25/2008 Price decreased by 2% to $419,000.
06/03/2008 Price decreased by 2% to $410,000.
07/02/2008 Price decreased by 3% to $399,000.
07/22/2008 Listing is no longer available.
09/09/2008 Re-listed by Prudential Elliman.
01/28/2009 Price decreased by 8% to $369,000.
02/04/2009 Price decreased by 5% to $349,000.
03/04/2009 Listing is no longer available.
03/11/2009 Re-listed by Prudential Elliman.
05/07/2009 Listing entered contract.
07/16/2009 Sale recorded for $338,000.
07/17/2009 Listing is no longer available.

What leads anyone to believe that prices will be higher in 12 months from now? Sure they may be higher month over month, but why would they be higher next year?

aboutready...i saw an ad on streeteasy for stuytown..they're down to $2270...your thoughts on it going lower..

Because people haven't seen a sustained decline in so long that they subconsciously think it never happens evan though it does and has many times.

you already missed the bottom in both sales price and interest rates.