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Manhattan residential market ends year on up note By Amanda Fung Published: January 5, 2010 - 5:59 am If the final quarter of 2009 is any indication, the residential real estate market is in line for a good year in 2010. For the first time since the market collapsed in late 2008, sales activity and inventory in Manhattan stand at near normal levels, according to a number of market reports... [more]

Manhattan residential market ends year on up note By Amanda Fung Published: January 5, 2010 - 5:59 am If the final quarter of 2009 is any indication, the residential real estate market is in line for a good year in 2010. For the first time since the market collapsed in late 2008, sales activity and inventory in Manhattan stand at near normal levels, according to a number of market reports released Tuesday. The number of transactions continued to increase toward the end of 2009. During the final quarter, the number of sales rose to 2,473, up 8.4% from the same period a year ago, and up 10.9% from the previous quarter, according to a report by Prudential Douglas Elliman and Miller Samuel Inc. The number of deals was the big surprise as it actually exceeded the 10-year quarterly average of 2,297 transactions, said Jonathan Miller, chief executive of appraisal firm Miller Samuel. He attributed the spike to “a release of pent-up demand.” A separate report prepared by The Corcoran Group and PropertyShark.com paints an even brighter picture. It estimates that 3,400 sales closed during the quarter, a sharp, 48% jump from the same quarter 2008. “This is all good. We are seeing historically normal levels of sale activity and inventory, prices are stabilizing,” Mr. Miller said. “This is as optimistic as it could get.” Inventory continued to drop toward the end of the year. There were 6,851 listed units, down 24.6% from the fourth quarter 2008, Mr. Miller said. That figure was slightly below the 10-year average of 7,094 units. However, Bill Staniford, CEO of PropertyShark, warned that the inventory decrease may owe to people who have held off on putting their homes on the market because the market has come down significantly. Diane Ramirez, president of Halstead Property, attributes the lower inventory figures to the fact that properties priced below $5 million were getting absorbed late last year. In contrast, the $5 million-plus properties are still lingering on the market because it was the last segment in the market to show signs of a recovery, she added. Prices continued to stabilize in the fourth quarter, a stark contrast from the first half of 2009 when prices plummeted by as much as 25%. Median sales prices were down 10% to $810,000 from the same period last year, Mr. Miller said. Prices were down just 4.7% from the third quarter. “By the time we hit the end of the year there was a comfort zone,” said Pamela Liebman, CEO of The Corcoran Group. “Sellers got real with prices. Buyers realized there is opportunity out there, and confidence has increased.” Industry experts expect the market to continue to recover. The first-time home buyer credit extension and expansion, as well as low interest rates, are expected to help sales and encourage buyers to come out. “The last quarter, which is traditionally slow, was very active, and that will continue through the first quarter,” said Dottie Herman, president and CEO of Prudential Douglas Elliman. January 4, 2010 By ELIZABETH A. HARRIS The 2009 Manhattan real estate market ended on a better note than it began, according to fourth-quarter reports that were to be released Tuesday by the city’s largest brokerages. The improvements in the market that began over the summer pushed through to the end of the year. Most reports found that sales increased from the third quarter to the fourth, which helped eat away at the inventory of unsold apartments. Prices, meanwhile, stayed about flat — some of the reports showed slight increases, but most showed small declines. “Considering where we came from, the results this quarter were much better than we could’ve imagined a year ago at this time,” said Jonathan J. Miller, president of the appraisal firm Miller Samuel, who prepares the market report for Prudential Douglas Elliman. “There are a lot of challenges ahead for housing, but I think the worst is behind us.” Dottie Herman, president of Prudential Douglas Elliman, said that in the first half of 2009, apartment sales were low. “People were thinking, If I buy this, will the market go down more?” Ms. Herman said. “You don’t have that any more. People feel the market has pretty much bottomed out.” The Prudential report showed that the median sale price in Manhattan was $810,000 in the fourth quarter of 2009, a 10 percent drop over the same period in 2008 and a 4.7 percent decline over the third quarter of 2009. The average sale price, $1.296 million, was down 2.1 percent since last summer and 12.7 percent since the fourth quarter of last year. Real estate sales figures usually represent contracts signed several months earlier. Mr. Miller said that the median sale price of $810,000 in Manhattan was down 21 percent from the peak of $1.025 million in the second quarter of 2008. The average sale price of nearly $1.3 million last quarter was 24.8 percent lower than the peak of $1.72 million in the first quarter of 2008. Prudential said the number of sales increased 10.9 percent from the third quarter to the fourth last year, and they were 8.4 percent higher than in the fourth quarter of 2008. It was unusual to have such an active fourth quarter, which includes many holidays. “Over the last couple of years, prices leveled off and activity went down sharply in the fourth quarter,” said Gregory J. Heym, chief economist at Terra Holdings, who prepares reports for Halstead Property and Brown Harris Stevens. “That hasn’t happened” in 2009. “It’s unusual to see this kind of strength continuing in the fourth quarter,” Mr. Heym added. Inventory has been reduced by the rise in sales that started in the summer. That is unusual because the busiest time for sales in the city is usually the spring. The Prudential report found that inventory had fallen 18.3 percent since the third quarter of 2009 and 24.6 percent since the fourth quarter of last year. Inventory is now 6,851 listings, just shy of the 10-year quarterly average of 7,094, Mr. Miller said. Some of the decline in inventory, however, is seasonal. Sellers often pull their homes off the market before the holidays and put them back on in the new year. Those owners might be joined by many others who have sat on the sidelines for the last year or so, hoping to wait out the economic storm. But even with willing buyers and sellers, there is a third party to consider: the banks. Lending remains extremely tight, especially for “jumbo” mortgages, those above $729,750. In Manhattan, these represent a much larger part of the market than in most parts of the country. “It’s still a struggle,” said Pam Liebman, president of the Corcoran Group. “The inflexibility of the jumbo mortgage market does continue to kill some deals out there.” But for anyone who can get a mortgage, rates are still low. They have nowhere to go but up, and this year, some economists say, they are likely to rise, which could put some downward pressure on the market. High unemployment and concerns about commercial real estate foreclosures could play a part as well. “There are a lot of concern in the economy,” said Mr. Heym of Terra Holdings. “We want to see jobs added again; it’s hard to know what a bunch of commercial foreclosures would mean. I think we’re at a state where things are getting better; it’s just going to be a slow recovery.” Manhattan Apartment Prices Fall as New York Loses Finance Jobs By Oshrat Carmiel Jan. 5 (Bloomberg) -- Manhattan apartment prices fell for a third consecutive quarter as Wall Street job losses drained demand and the decline in co-op and condominium values reached 21 percent since the market peak. The median price slid 10 percent to $810,000 in the fourth quarter from a year earlier, down from almost $1.03 million in 2008, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales jumped 8.4 percent to 2,473 as lower prices pushed transactions above the 10-year quarterly average. Values continued to fall across apartments of all sizes as New York City recorded 10 percent unemployment in November. Fallout from the recession and credit crisis that cost more than 184,000 finance jobs in the Americas is still hurting New York. The city lost 25,200 finance jobs in the 12 months ending Nov. 30, the state Labor Department said Dec. 17. “We have some big macro issues ahead of us,” said Jonathan Miller, president of Miller Samuel. “My view is: We’re not done.” Five Manhattan property reports issued today showed overall price declines. The Corcoran Group, a New York-based broker that conducts its survey with the research company PropertyShark.com, said the median apartment price dropped 15 percent from a year earlier. Brown Harris Stevens and Halstead Property LLC put the decline at 11 percent and StreetEasy.com said the drop was 10 percent. The number of apartments for sale dropped 25 percent from the previous year to 6,851, according to Miller Samuel and Prudential. The 10-year average of quarterly inventory for sale is 7,094 units. ‘An Anomaly’ Miller called the decline in inventory “an anomaly” brought on by a wave of buyer interest built up during the first half of 2009. More than 6,000 apartments in new developments have yet to be listed for sale, he said. The biggest price reduction in the three months ended Dec. 31 was for a 43rd-floor, two-bedroom condominium in the Financial District’s William Beaver House, according to StreetEasy. The price was cut to $1.66 million from $3.05 million and the unit sold 10 days later for $1.53 million, according to StreetEasy. A smaller proportion of Manhattan apartment sellers discounted their listings in the fourth quarter. About 27 percent of properties for sale carried price cuts, compared with 33 percent a year ago, according to StreetEasy. Condo sellers cut an average of 7.8 percent off their asking prices, while co- op sellers whittled an average of 7 percent from prices in the three months ending Dec. 31. Hitting Bottom? “If we have not hit a bottom, we have definitely hit a level of resistance here,” said Bill Staniford, chief executive officer of PropertyShark.com. “This is an area where buyers and sellers met and agreed there is value at this level.” Studio apartments prices fell 11 percent from a year earlier to a median of $375,000, Miller Samuel and Prudential said. One-bedrooms dropped 7.6 percent to $661,000; two-bedrooms fell 23 percent to $1.24 million and three-bedrooms plunged 42 percent to $2.35 million. Apartments with four or more bedrooms fell 38 percent to a median price of $5.4 million. Three of the five most expensive closings of 2009 happened in the fourth quarter, according to StreetEasy. The priciest was a 12th-floor unit at 820 Fifth Ave. bought by Ken Griffin, founder of Citadel Investment Group, for $40 million. He bought from philanthropist Lily Safra and closed the deal last month. South of 34th Street, sales at the Superior Ink Condominiums and Townhouses helped boost the average price for apartments with at least three-bedrooms by 39 percent to $4.67 million, according to Halstead and Brown Harris, both owned by Terra Holdings LLC. “A lot of those units were bought some time ago,” reflecting prices at the peak of the market, said Gregory Heym, chief economist for Terra Holdings. The market reports issued today are compiled from public records and brokers’ proprietary data. January 5, 2010, 12:01 AM ET Manhattan Real Estate Now ‘Reasonable,’ Whatever That Means The weather in Manhattan may be in deep freeze, but the real estate market continues to thaw. With prices falling–co-ops hit 2005 levels–buyers are pounding the (frozen) pavement hunting deals. Median prices were down nearly 15% from a year ago. The average price per square foot fell 17%. Buyers defied the typical seasonal slowness and pounced, sending closings soaring by nearly 50% from a year earlier, according to fourth-quarter data from brokerage The Corcoran Group and PropertyShark.com. Several market reports expected Tuesday detail a once high-flying market trying to recover from a housing crash and credit-crisis paralysis. While homes are taking longer to sell, there are early signs of improvement: Properties are receiving multiple bids, less inventory is hitting the market and, in the latest quarter, fewer sellers cut prices. International buyers, absent for much of last year, are returning. “I just can’t deny the improvement that we’ve had,” says Noah Rosenblatt, a broker and publisher of UrbanDigs.com, a blog focused on Manhattan real estate. “There’s been so much action…The risk of systemic failure has been priced out of the market.” The closings boost is expected to continue for several months, fueled by increasing buyer confidence as the economy shows improvement, interest rates remain low and the government dangles a tax credit to first-time and move-up buyers. But the market faces headwinds that could reverse recent improvement, including the risk of mortgage rates climbing, mounting unemployment and the expiration of the tax credit, which was extended from November until April. Credit standards, meanwhile, remain tight–particularly for those looking to get a “jumbo” mortgage–making it hard for even some willing buyers to close deals. The market’s lower end benefited from the credit in the fourth quarter, as affordability increased for those long priced out of the market. Properties under $500,000 made up nearly a quarter of total sales, up from 15% a year ago, according to Corcoran. At that price point, most Big Apple buyers would likely be snaring a studio apartment–that median price fell 13% to $390,000 from a year ago. Weakness, however, persists for new projects, which saw rampant overbuilding during the boom. Those median prices tumbled 23% from a year earlier to a median $1.19 million, Corcoran reports. It’s also been tough for the luxury segment, hurt by higher interest rates on so-called jumbo loans, which saw median prices fall 22% to $3.9 million. Some desperate sellers have resorted to dramatic price chopping. At 15 William St. in downtown, unit 43A has been cut by more than 45% to $1.7 million, according to StreetEasy.com. Further uptown at 444 E. 86th St., a three-bedroom unit measuring 1,400 square feet, has fallen by more than 40% to $1.17 million. That’s quite the turnaround for Manhattan, which long seemed immune to the housing downturn thanks to an island geography that limits expansion. But it weakened following the September 2008 bankruptcy of Lehman Brothers Holdings Inc. and the ensuing financial crisis that erased thousands of local high-paying jobs and slashed Wall Street bonuses. Since peaking in the third-quarter of 2008, co-ops have tumbled 13% to a median $622,250, while condos, which peaked the next quarter, have plunged 22% to a median $1.033 million, according to Corcoran. For co-ops, both median sales price and average price per square foot have fallen back to late 2005 prices. Kyle Young recently looked at dozens of apartments before paying $635,000 for a one-bedroom on West 75th Street priced around $675,000 in December. The closing price, he said, is reasonable, “if you can use the word ‘reasonable’ in terms of Manhattan real estate.” [less]