Let's Peek in the Rear View for Stats...and Introducing a New Video Feature

I hope 2012 is off to a healthy and prosperous start for you. The end of January is already here and spring will be just around the corner soon enough. Of course, the weather feels like we're in March already. By the way, how are those resolutions going? Did you resolve to buy a house in New York City? Call me... I jest, but if you are an owner who wants to sell your apartment, the clock is ticking and there are things you should know about why listing before the spring market is a smart thing to do. In any event, read on for this month's ClosingTableNYC. For January, we report on the real estate activity from 2011.

We also have a new feature! You can view a short, two minute video version of ClosingTableNYC right here by clicking the ClosingTableNYC link. You can also watch from Facebook and Twitter on your PDA. It includes a brief wrap up of key 2011 numbers and a fun piece about pedicabs in Central Park. Check it out.  ClosingTableNYC Video

The following is an abbreviated report written by Gregory Heym, Chief Economist for Terra Holdings, the parent company of Halstead Property.

A sharp decline in condo sales brought the overall average and median Manhattan apartment sales price lower over the past year.  The number of condo closings fell 24% from the fourth quarter of 2010, which meant condos accounted for only 40% of all apartment sales.  A year ago, condos were 46% of sales, and since condos are generally more expensive than co-ops, a decline in their share of the market can bring the overall average apartment price lower. 

At $1,391,745, the average price for a Manhattan apartment was 3% lower than during 2010’s fourth quarter, while the median price fell 7% to $785,000.  However, looking at co-op and condo prices separately shows us that much of this decline was due to the lower percentage of condo sales.

The average co-op price of $1,149,203 in the fourth quarter was just 1% lower than a year ago, helped by an 18% increase in the average price for three-bedroom and larger units.  For condos, the average price rose 4% over the past year to $1,825,728 despite the decline in closings, which were led by an 8% gain in the average price of studio apartments.

The economic and financial turmoil that began in the late summer led to fewer transactions than a year ago.  Overall, there were 13% fewer closings than in the fourth quarter of 2010, when the threatened expiration of the Bush tax cuts led many high-end owners to sell before the year ended.  While condo sales fell 24% during this time, co-op sales fell by just 4%.

Job growth slowed in both the U.S. and New York City in the second half of 2011.  Through November, 49,300 jobs were added in NYC in 2011, down from 52,700 in the first 11 months of 2010.  The city’s unemployment rate in November was 8.9%, the same level as the beginning of 2011.  While there has been stagnation in hiring recently, New York’s recovery remains well ahead of schedule.  This combined with a relatively low rate of available apartments has led the Manhattan market to continue to outperform the rest of the nation.

Gregory Hehm, Chief Economist, Terra Holdings

Come back next month and ClosingTable NYC will have a new video blog and will report on the latest in the Manhattan real estate market. Enjoy February.

As the Ball Prepares to Drop, New York Real Estate Rises

This year is wrapping up quicker than the presents in your bags from Bloomingdale's. How is the real estate market in Manhattan fairing? The best way to determine this is by reviewing the recorded sales numbers. It is too soon to look at hard numbers for the entire year, so we’ll revisit the third quarter numbers which provide a good idea as to what is happening in the Big Apple. 

We did see an influx of international investors this year come to New York and pay cash for condominiums. With the vacancy rate teetering around .5%, investors saw opportunity with pricing and ability to rent quickly. In some cases, condos sold for asking price or slightly more. 

Overall, the New York market did well with an increase in volume for sales. 

I recently had a short two minute video biography produced which includes two client testimonials. I invite you to watch and refer any friends or relatives you know who will be selling or buying in the new year. Thanks for your time.

Mike's Video Biography

Have a happy holiday season and a productive, healthy 2012!

Manhattan Cooperatives and Condominiums

Prices for Manhattan apartments increased slightly during 2011. The average sales price in the third quarter was $1,437,302. This represents a 1% increase from the third quarter 2010. This is good news for the New York market. However, the median price decreased 4% during this period to $850,000.

The volume of reported apartment sales increased 1% from a year ago to 2,492.

This combined data is very useful when planning a strategy into 2012. Let’s dissect this further and see how condominiums and cooperatives performed separately.

Third Quarter 2011 – Cooperative Sales Activity

A 17% gain in three bedroom and larger apartments helped push the average price for all co-ops 2% higher from 2010’s third quarter, to $1,180,442. The average price did decline for both studio and one bedroom co-ops compared to a year ago.              

Quarter	Studio	1 BR	2 BR	3 + BR	All
3rd Q 11	$343,363	$577,256	$1,221,556	$3,559,549	$1,180,442
2nd Q 11	$351,499	$590,688	$1,308,501	$3,675,849	$1,214,047
1st Q 11	$331,846	$582,669	$1,210,817	$3,157,789	$1,070,229
4th Q 10	$342,545	$593,718	$1,231,116	$3,150,700	$1,158,333
3rd Q 10	$366,086	$606,444	$1,206,257	$3,049,980	$1,156,733

Third Quarter 2011 – Condominium Sales Activity

All sizes of condo apartments saw an increase in the average over the past year, led by a 6% gain in studio apartments. The overall average condo price rose 2% during this time to $1,756,744.

Quarter	Studio	1 BR	2 BR	3 + BR	All
3rd Q 11	$525,014	$837,707	$1,652,607	$3,844,301	$1,756,744
2nd Q 11	$493,992	$796,378	$1,652,085	$3,724,128	$1,670,908
1st Q 11	$517,980	$820,419	$1,631,454	$3,853,227	$1,745,464
4th Q 10	$495,002	$844,964	$1,637,638	$4,567,750	$1,751,219

New Development  News

Apartments in new developments sold for an average of $1,169 per square foot in the third quarter, a 5% gain from the third quarter of 2010. Lofts posted a 12% increase in  average price per square foot over the past year, rising from $1,077 to $1,204.

Time on the Market

Co-ops and condos that sold during the third quarter spent an average of 111 days on the market, down from the previous quarter, but 14% longer than a year ago. Seller’s received 95.8% of their final asking price, virtually unchanged from the third quarter of 2010.

Geographic  Performance

West Side

A number of closings at The Laureate, a new development condominium, helped bring the average price for three-bedroom and larger condos on the West Side increase 13%  over the past year. These closings also helped to bring the average condo price per square foot up 11% from 2010’s third quarter, to $1,390. Co-op prices on the West Side fell over the past year, with the average price per room down 2% for prewar and 5% for postwar co-ops.

East Side

East Side pricing gains over the past year were led by three-bedroom and larger apartments, whose average price rose 29% to $4,541,417. This figure was helped by 5 sales over $20 million. Prices also rose for one and two bedroom apartments, while falling for studios. The increased high-end activity in this area was concentrated in the prewar co-op market, whose average price per room rose 23% compared to 2010’s comparable period.

Midtown East (34^th Street to 59^th Street, 5^th Avenue to East River)

The average price per room fell last year for both prewar and postwar co-ops in the Midtown East market. Condo prices were slightly lower, as their average price per square foot fell 1% to $1,260.

Midtown West (34^th Street to 59^th Street, 5^th Avenue to Hudson River)

Although sharp declines were seen in the average price per room for prewar co-ops in the Midtown West market, this is a relatively small area and can see large fluctuations in data from quarter-to-quarter. The average condo price fell 6% over the past year to $1,178 per square foot.

Downtown

Downtown prices were mixed over the past year, with the average price up for studios and two bedrooms but lower for one and three bedrooms and larger apartments. The average co-op price per room rose 4% for prewar and 2% for postwar units. Condo prices averaged $1,192 per square foot, 1% lower than a year ago.

Upper Manhattan (North of 96^th Street East and West)

While the average price rose 11% over the past year for three-bedroom and larger units in Northern Manhattan, this was the only size category to see an increase in its average price. Co-op prices were mixed, as the average price per room fell slightly for prewar but rose for postwar apartments. At $575, the average condo price per square foot in Northern Manhattan was 7% lower than a year ago.

This data copied and reworded in cases from a report  by Gregory Heym, Chief Economist, Halstead Property, LLC.

©2011 by Halstead Property, LLC. All Rights Reserved. This information may not be copied, commercially used or distributed without Halstead Property’s prior consent. While information is believed true, no guaranty is made of accuracy.

The Summer Season Heads Towards Dusk, Upper West Side Performs.

A collective groan was heard throughout the Upper West Side office of Prudential Douglas Elliman last week as the stock market performed like the Cyclone on Coney Island. Instead of tasting sweet cotton candy after a wild ride and giggling about the head rush, the real estate market had the mouth puckering taste of a sour lemon Italian Ice.

Buyers who had been shopping and ready to make the leap, suddenly had to be coaxed back off the benches to make offers. Sellers, cautious about the market, eagerly worked with qualified buyers whose weight is worth their mortgage in gold.

This comes after somewhat of a productive summer, a traditionally slow time for sales. The Upper West Side in particular did well. The Real Deal real estate news magazine reported that "business, while not quite back to normal, has vastly improved over the last year, especially for new luxury rentals and large family-sized apartments."

The realities of the market have changed. The New York City buyer is smart and checks StreetEasy, OLR and NYTimes before even contacting a broker. Any property that is priced too high will not sell. The magic buyer only exists in fairy tales and soap operas. And like the demise of daytime drama, an overpriced listing will collect dust and become invisible in the market, leaving some sellers ready to pull out their hair.

Studios and one bedroom homes are seeing an adverse price adjustment due to the large amount of inventory. If you are entering the Manhattan market, this is where the deals are. An apartment selling for $600,000 in 2005, can potentially be listed for $400,000 today.  Investors, particularly from Brazil, are buying studio and one bedroom condos for cash, then renting them out for income.

The rental market, as a side note, has gone wild. The vacancy rate is under 1% which is making landlords attempt to recapture lost income from the past few years. Rental increases of $300-900 per month are being reported. An example of a hot Upper West Side rental apartment is this listing at 11 West 81st Street. Three doors down from Central Park, it is a one bedroom co-op renting for $3750! Click here for more info: Upper West Side One Bedroom

Banks are still difficult to deal with when making a purchase. Chase Bank recently rejected the building of a two bedroom apartment that was under contract. They had previously approved the building and then reversed the decision. Several months later the second appraisal revealed that the property had increased in value by $10,000. The buyer made money before the closing even occurred. This is rare these days but it was a newer condominium. Most newer development and luxury condos go quickly once listed. 

Come back after Labor Day and we'll see how the fall buying season starts. Enjoy the remaining days of summer.  

Manhattan Condo Market Makes a Bang this Fourth of July

So what is going on in Manhattan real estate as we hit the halfway mark of 2011?

Condominium sales are on the rise as investors eager to take advantage of the rental market in New York, are buying up units to gain passive income. The only issue here is that the inventory is so low that reports actually show a decrease in selling activity for condominiums. Sellers of condominiums in all price ranges are holding firm to their expectations. Although prices have not increased yet, if the activity continues, we may see it in the near future.

Developers in Lower Manhattan/ Battery Park who filled their buildings with renters a few years back, have determined the climate is right for liquidation. They cleared the building of tenants and are selling the apartments as condominiums. The inventory is moving. Recent transactions which I brokered in Battery Park, Upper West Side and Murray Hill, saw some sellers counter generous cash offers with the listed price, firm and final. In other words, some condominium owners have a "take it or leave it" attitude. This is reminiscent of 2005 real estate. We'll keep tuned in and see where this goes.

It is a great time to buy a co-op in New York. That is, in my opinion, if you are looking for a primary home. Co-op sellers are more open to negotiating than their condo owner counterparts. The inventory presents many opportunities for buyers who plan to stay in New York for at least five years. This segment of the real estate market in New York may present the best avenue for those seeking long term housing, shared liability and more square feet for the price.

The rental market in New York has gone crazy.  The vacancy rate is under 1% (.69%), the lowest in five years. Long lines at open houses, multiple bids and jockeying for a good position with property managers are now back in vogue. If you are renting in the big apple, be prepared to write a check when you see what you like. If you have a "wait and come back tomorrow" attitude, you will be left scrambling for a place that may be less suited to your taste. The average rent right now is $3,353 per month, just 1.2% less than the peak rental year of 2007. This segment of the market is strong.

The New York Times reported that although there is still a feeling of insecurity with the overall economy,  nine out of ten Americans feel that owning a home does hold value and is an important part of the American dream. This is a drastic difference from the sentiment one year ago. Additional findings from this NYTimes/CBS News poll found that Americans were almost divided when questioned if the government should help troubled homeowners out of upside down mortgages.


Have a safe and happy Fourth of July Weekend. ClosingTableNYC will report first half and second quarter activity in a few weeks.