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.

Is the Big Apple Ripe? Quarter 1, 2011 Summary

It is already May if you can believe it. Not quite mid year, but a good time to check in and see how the real estate market is doing. News reports these days seem to say the market is moving laterally. So is it a good time to buy? Are properties bursting with value in Manhattan, ripe for the picking? Interest rates have inched up a bit and prices remain flat, but how about the overall market performance in New York? The following is a summary of the 2011 Quarter 1 report from Prudential Douglas Elliman.  

Manhattan Market Overview

There were more sales in the first quarter of 2011 than in any first quarter in 3 years or since the credit crunch in 2008. There were 2,394 sales in the quarter, 0.4% more than 2,384 in the same period a year ago and 4.3% more than 2,295 in the prior quarter. The pending sales index indicated a 10.1% increase from the prior quarter, but activity was 14.2% lower than the same period a year ago. Market share for new development sales slipped to 14.5% of all sales down from 16.6% during the same period a year ago.

Median sales price for co-ops and condos slipped 9.9% to $728,071 from same period last year. Price per square foot decreased to 1.3% for same period.

Listing inventory fell 5.3% to its lowest first quarter total in 3 years. The number of days it took to sell a property fell beneath the ten year average of  132 to 127 days.

Cooperatives
Co-op sales jumped 28.7% to 1430 from 1111 Q1 2010. Sellers took advantage of positive media reports on co-op sales and the spring market, as inventory increased 5%. The median sales price fell 6.2%  to $642,500 from $685,000 Q1 2010. It took 9 additional days on the average to sell a co-op this year. The average was 119 days. The difference between asking and sales price declined.

Condominiums
Condo sales dipped by 24.3% from Q1 2010. However, listing inventory fell 14.5%, to its second lowest level in 5 years. Price per square foot increased 5.4% to $1,216 from $1,154 last year Q1. It took 140 days to sell a condo, 5 days longer than Q1 2010. Sales price was 7.7% less than asking.

High End Homes
The median sales price for the luxury market adversely adjusted by 13.8% to $3,950,000. Price per square foot increased 1% to $1,899. Active inventory fell 31.8% when compared to Q1 2010. It took 128 days to sell a luxury home, this is two months faster than Q1 2010.


Performance
6.8% of all sales exceeded the listed price. A property listed at market value sold 43 days quicker than a higher priced comparable property.

The time it takes to sell an active listing was reduced by 50 days as sellers adjusted their expectations to realistic selling prices.


If you would like a more detailed 2011 Quarter 1 report, please email me and I will send you a PDF version.