Manhattan Real Estate starting to look Weak

Manhattan Second-Quarter Apartment Sales Drop Most Since 1998 By Sharon L. Lynch July 2 (Bloomberg) -- Manhattan apartment sales dropped the most for a second quarter since 1998 and unsold inventory approached an eight-year record, two signs prices may be poised to drop in the nation's most expensive urban housing market. Sales fell 22 percent from a year earlier and inventory rose 31 percent to... [more]

Manhattan Second-Quarter Apartment Sales Drop Most Since 1998 By Sharon L. Lynch July 2 (Bloomberg) -- Manhattan apartment sales dropped the most for a second quarter since 1998 and unsold inventory approached an eight-year record, two signs prices may be poised to drop in the nation's most expensive urban housing market. Sales fell 22 percent from a year earlier and inventory rose 31 percent to 6,869 units, New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The median price of a co-operative or condominium apartment increased almost 15 percent to a record $1.03 million, lifted by new developments. Transactions are declining as financial firms have announced plans to cut almost 90,000 jobs after taking more than $400 billion in mortgage-related losses and writedowns. Those companies may lose as many as 175,000 employees by next June, according to executive recruiters such as New York's Gerson Group, casting a pall on a property market driven by Wall Street compensation. ``People are asking: `Am I going to have a job?''' said Pamela Liebman, chief executive officer of the Corcoran Group, a Manhattan-based real estate brokerage that also issued a price report today. ``There is a lot of uncertainty and uncertainty puts people on the sidelines.'' The U.S. housing slump started in mid-2005 when sales of new and existing homes began to drop, bringing a five-year boom to a close. Prices for existing homes started falling last July and finished the year below 2006 levels, the first annual decline since the Great Depression, according to the National Association of Realtors in Chicago. Longer Selling Time While prices in New York City are holding up for now, buyers remain wary and apartments are taking longer to sell. The average time spent on the market rose 15 percent to 135 days, according to Miller Samuel. At the end of May, there were 7,320 housing units for sale in Manhattan, the second-highest number for the month since Miller began keeping records in 2001. ``There is sort of the anticipation, the expectation that the other shoe is going to drop,'' Miller Samuel President Jonathan Miller said. ``I think for this quarter, it hasn't.'' All four reports issued today show price increases. Corcoran, owned by Apollo Management LP, and the New York-based brokers Brown Harris Stevens and Halstead Property LLC, owned by Terra Holdings LLC, produced reports in addition to Miller's. The figures vary in part because the brokers include some of their own sales that have yet to show up in the city's public records database. Manhattan apartment prices rose 3.6 percent in 2007, according to Miller Samuel. Luxury Sales About a third of second-quarter closings were new condominiums, some of which went into contract before turmoil hit the credit markets last August and September, said Gregory Heym, chief economist for Terra Holdings. Many of the units closing now are multimillion dollar condominiums at the recently converted Plaza and at architect Robert A.M. Stern's 15 Central Park West. Those properties helped drive the median condominium price up almost 22 percent to $1.3 million in the three months ended in June and contributed more than three percentage points to the city's overall increase in median price, according to Miller. Without them, the median rose 11.2 percent, Miller said. Goldman Sachs Group Inc. Chairman Lloyd Blankfein, former Citigroup Inc. Chairman Sanford Weill and rock star Sting have bought units at 15 Central Park West, where the apartments have heated bathroom floors, Vermont marble countertops and six-burner Thermador ranges. Future Bonuses Other buyers there include Nascar Inc. Chairman Brian France, who paid $10.7 million, and Mitchell Julis, co-founder of the asset management firm Canyon Partners LLC, who paid $10.2 million, according to city records. Once the remaining units in Stern's building and the Plaza close, average prices may drop as much as $200,000, Heym said. ``I don't expect to see any dramatic price change before the end of the year,'' Heym said. ``The real telling thing will be Wall Street bonuses and how the city looks going into 2009.'' Prices of two-bedroom apartments rose 18 percent to $1.65 million, the biggest increase for any size category. Studios rose almost 12 percent to $480,000, one bedrooms increased 11 percent to $778,961, three bedrooms by 3 percent to $3.7 million and apartments with four or more bedrooms climbed 11 percent to a median of $7.35 million, Miller's data show. `Kiss the Ground' The top end of the residential market remained the strongest as wealthy buyers bought condominiums with amenities such as gym and spa services, hotel-style room service and swimming pools. The median price of a luxury apartment rose almost 38 percent to $4.95 million in the Miller Samuel survey and 35 percent to $4.88 million, according to Corcoran. Both companies consider apartments of more than $3.1 million as luxury. ``Real estate markets go up and down, and when it comes to New York City, it's an island. There's not a lot of land, and it'll survive,'' said Dottie Herman, chief executive officer of Prudential Douglas Elliman. ``I think we need to kiss the ground because we live in New York.'' [less]