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.

March is Out Like a Lamb While Buyers Feast on Studios!

Although the year was off to a good start and the Manhattan real estate market fizzed with activity during January and February, March has fallen flat. As much as an optimist as I am, things slowed down a bit after what seemed to be a busy early winter. There was a lot of shopper activity in March, and some low offers tossed about as buyers tested where sellers will go. The overly harsh weather could have been a determent for buyers. Official numbers will be reported here for quarterly performance so stay tuned. 

The market is still bouncing along a jagged bottom. The New York Times reported that the housing market has stabilized at a level below the peak of 2006 but higher than the height of prosperous periods in the 1990's. If we look at a 12 month spread of nationwide sales of existing homes, we're at the same level as we were in mid 1999.

Prudential Douglas Elliman has been named the exclusive sales agency for two boutique Tribeca condominiums. The Real Deal reports that the two buildings, located at 471 Washington Street and 1 North Moore Street, include 12 and five units, respectively. Prices at 471 Washington Street, which includes one, two and three bedroom apartments, range from $1.7 million to $15 million. At 1 North Moore, which includes two triplexes and three full-floor, three-bedroom lofts, prices have not yet been set, but they should be in the $4.25 million to $20 million range. If interested give me a shout. mdubour@elliman.com



If a boutique condo in Tribeca doesn't fit your budget then join a growing number of buyers who are snatching up Manhattan real estate priced under $300,000. According to The New York Times, we are now at 2005 prices in New York which is presenting numerous opportunities. Studios priced at an average of $500,000 in 2008 have adjusted to around $404,000 based on sales from 2010. Co-op studios may even be bought for under $300,000! Imagine this in a market where certain studios approached the million dollar mark just a few years ago. Miller Samuel, a market analyst for Prudential Douglas Elliman, reported that studios had accounted for 17% of sales in New York in previous years. In 2010, however, the market share dropped to 11%. "Market share for studios tends to drop off when conditions are weak" Mr. Miller reported.



155 East 34th Street (click address for more info)



Studios can be a good investment especially the ones in "A" locations. What were once hard to find studio apartments with enviable addresses are now available. The majority of stock is co-op studios, but there are also limited condominium studios for sale right now. If you position the financing right or pay cash, with moderate maintenance fees and taxes, you will be able to pick up a nice investment unit that could generate some strong rental income. The rental market in Manhattan is once again, very tight. The typical studio in a prime location rents for around $2,000 per month. Ironically, I do have a studio condo unit listed for sale in Murray Hill. If interested let me know. mdubour@elliman.com

Finally, Renee Zellweger has put her two apartments on 82nd Street on the Upper East Side in contract. Combined, they were listed at $8.95 million.  The starlet plans to spend more time on the west coast.

Be on the look out for a quarterly re-cap which may come out early to mid April. Please send any questions to mdubour@elliman.com or call 917-359-7373.

Agency Disclosure, Month to Date Street Action and 2010 Stats

Agency Disclosure

Imagine in the dating world if there was such a thing as full disclosure. That would clear the way for no nonsense romance and save single folk a lot of time. This idea may be fictional, but in real estate it is a reality. Effective January 1, 2011, New York City real estate agents are required by law to disclose, in writing, who they represent when brokering a real estate transaction. This will take away any guessing that may happen and you’ll know when the agent is in your corner. Other markets have had mandatory written agency disclosure laws in place for many years. New York is playing catch up.  

Here is a quick description of the agency types:

Seller’s Agent- If you are listing your home for sale, the agent you hire represents you and your best interest. Your agent has an obligation to sell your home for the best possible price and terms that benefit you.

Dual Agent- In simplest of explanations, this is when the listing agent (seller’s agent) has a buyer client who is interested in their listing. This becomes equal representation for both parties. Most sellers and buyers are cautious of direct dual agency as they think their best interest is not represented. However, the agent can effectively negotiate directly with both parties without a combative or obstructive real estate agent that may be on the other side of negotiations.

Buyer’s Agent- A buyer’s agent represents you as a consumer when looking to buy property. They ask pertinent questions, search suitable properties for you to peruse and help you get the best price and terms for a dream home. If you are shopping for a home and decide to tour open houses by yourself, the agent hosting the open house of your dreams is most likely representing the owner.

This is a brief description of agency disclosure law. Please email me at mdubour@elliman.com if you have additional questions.  

  Activity

The volume of shopper traffic in Manhattan has been strong in February during what is typically a slow, cold month for home sales.  We are seeing a mix of both cash and financed deals occurring. A motivating factor for cash buyers is the fact that cash is king once again! Some sellers who are presented with cash offers are now willing to accept prices lower than their expectations in order to exit. Buyers have this knowledge and are using it to their advantage in getting some great deals. Also, with mortgages more difficult to close, some sellers see the cash buyer as a definite. The value of not having a deal based on the results of an appraisal is now worth its weight in gold.    

Buyers who are seeking mortgages are being fueled by the fact that mortgage interest rates have inched up a bit over the past month. Consumers may see this as an indication that the magic combination of low prices and interest rates is changing. This has really pushed some buyers to act now and January saw an increase in existing home sales which seems to be extending into February. However, last week, mortgage rates inched down a bit to an average 4.75% for 30 year fixed products after hovering around 5%.  This is being attributed to the recent unrest in the Middle East which has caused investors to pursue safer investment strategies.

Closing Table NYC consulted with DE Capital Mortgage Specialist, Lenny Holler, who said,  “My expectations are that despite the high level of volatility, mortgage rates will ultimately stabilize and head lower again, although not to the levels previously seen as recently as early November, as the economy will at best grow only at a steady pace throughout 2011.”

  

A driving force in home sales is consumer confidence. This is ultimately linked to the unemployment rate and this Friday, the latest numbers will be released. If you are contemplating selling your property, keep an eye on this number. Low unemployment numbers may have a positive impact on consumer confidence and create more buyer activity. The spring market is here and if you need to sell, March is the month to put a plan in place. Send me an email at mdubour@elliman.com if you have questions about selling your home.    

    Numbers
Market statistics released from Prudential Douglas Elliman show that in 2010 the median sales price of property in Manhattan was $880,000, 3.5% above $850,000 in 2009 and more than double the $430,000 in 2001. 2010 was the second highest only to the 2008 median price of $955,000, which was considered the peak of the Manhattan market. The reason for the year over year increase was due to the shift in the mix towards larger apartment sales as the 2009 housing market, which could be referred to the “year of the first time buyer.”

There were 10,060 co-op and condo sales in 2010, the third highest total of the past decade, second only to a record 13,430 sales in 2007 and 10,299 sales in 2008. The 2010 total was 35.4% higher than the 7,430 sales total in 2009, the lowest total in more than a decade.

Listing inventory levels ended up in 2010 by 5.6% to 7,232 listings from 6,851 units in 2009. The rebound in sales activity encouraged individuals who had removed their listings in 2009 to re-enter the market. As a result, the monthly absorption rate—the number of months to sell all active inventory at the current pace of sales—declined to 8.6 months from 11.1 months and below the 9.3 month decade average. Days on market— It took an average of 119 days to sell a property in 2010, down sharply from 179 days or 2 months faster than it took in 2009. Listing discount—the percentage difference between the list price at the time of contract and the contract price—fell to 7.1% from the ten year high of 10.2% in 2009, but well above the 4.2% average of the past decade.

Check back in one month for more information on the real estate market in New York City.

-Mike DuBour

Manhattan Market Review, 2010

The end of January is here so let's look in the rear view for a review of how the real estate market performed last year.

The proof is in the hard data that the Manhattan real estate market is stabilizing. Although there has been a 5.6% increase in inventory compared to 2009, 4th Quarter, sales still remain constant. There were 2,295 recorded sales in the 4th Quarter 2010. The median sales price of a Manhattan apartment, condo and co-op, has increased to $845,000 from $810,000 in 2009 Q4, but this is an actual decrease from 2010 Q3 which had a median sales price of $910,000. Days on market decreased from 204 to 125 days. This may be attributed to sellers adjusting selling prices to move product instead of trying to get a high price from a fictitious buyer. Listing versus selling price was calculated at 8%.

The good news is that prices have stabilized.  The “spin” is that the market is continuing to build strength and momentum. The higher end of the market with purchases of $15 million up, is especially strong and is inflating the average price figures. There remains a degree of uncertainty in the more mainstream segments of the market as reflected by the number of sales which is down from last year. This is a sharp contrast from Spring 2010 when smaller units were much more in demand and sales volume was on the rise. Entry level buyers took advantage of the market conditions and the home buyer credit.

Data from STREETeasy reports that 5,582 condominiums and 6,655 cooperative apartments sold in Manhattan in 2010. So far, month to date, 70 condominiums and 119 cooperative apartments have sold.

Although real estate here in New York City is holding firm and some tremendous opportunities exist, we are not out of the woods. The rest of the country continues to experience a struggle in regards to the housing market. According to the Standard and Poor's Case-Shiller Home Price Index, 20 major metropolitan areas saw a 1% slide in price. Chicago, Las Vegas, Detroit, Atlanta, Seattle, Charlotte, Miami, Tampa and Portland, Ore top the list.

The winter and overall seasonal variances will impact the market performance. An interesting fact is that it can take up to four months to close property in New York City from initial acceptance of  the offer to reaching the closing table. The discrepancy of when a property actually sells versus closing would be a very interesting study. In fact, The National Association of Realtors released yesterday a report that the Pending Home Sales Index, a forward-looking indicator, increased 2.0 percent to 93.7 based on contracts signed in December from a downwardly revised 91.9 in November. The index is 4.2 percent below the 97.8 mark in December 2009. The data reflects contracts and not closings, which normally occur with a lag time of one or two months in other markets.

Send me a message if you'd like me to email you a more detailed analysis of 2010 real estate reporting. This includes a breakdown of how new development and condos vs. co-ops performed last year.

Next month, Closing Table NYC will discuss the new agency disclosure laws that are now in effect for Manhattan.

Happy 2011 Wishes! The Real Estate Market Vibrates

Happy New Year and may you have a prosperous and healthy 2011.

Is that the smell of roasted chestnuts? Think again, with mortgage rates and home prices still low, talk of a rebound in the housing market permeates every street corner and party in New York. This year could potentially be stronger for home sales than 2010. Although we can safely say that the market has not recovered, there has been an increase in sales activity. We have to monitor the early months of 2011 and hope to see a more consistent increase in home purchases.

According to the National Association of  Realtors, executed contracts to purchase homes in the northeast increased 22.1% since June 2010. The signing index, which has been tracking this data since 2001, reports that June had the lowest number of signings since tracking began. Most sales are being attributed to sellers positioning their properties based on market activity. The low mortgage rates also created a blip of activity in November in the wake of a slow October due the homebuyer tax credit ending.

Mortgage rates may have bottomed out. The average rate for a 30 year fixed product increased in December 2010 to the highest point in seven months. Freddie Mac reports that the average rate increased to 4.86% from its historic 40 year low of 4.17% in November 2010. 15 year products increased to 4.2% from 3.57% in November, the lowest since 1991. You may want to contact your mortgage broker to refinance or if making a purchase, lock in the rate.

Mouths of the Manhattan elite fell agape in 2010 when the estate of Brooke Astor accepted a low offer for the sprawling property which consists of the 15th and 16th floors at 778 Park Avenue. Originally listed in 2007 for $46 million, then reduced to $24.9 million, the accepted offer is said to be in the high teens. The estate is encouraging additional offers and hopes to land in the low $20 million range. Now is the time to contact your mortgage broker and make magic happen. As a historic notable, Mrs. Astor's husband, Vincent Astor, was the oldest son of John Jacob Astor who perished in the Titanic disaster of 1912.   

Celebrity drag queen RuPaul sold her 1490 square foot West Village apartment at 296 West 10th Street for $2.4 million in 2010. The "supermodel to the world" purchased the condo in 1998 for $1.095 million.

Have a safe and happy start to the new year. Closing Table NYC will be updated later this month with the final calculation of 2010 sales activity in New York City.

-Michael DuBour
mdubour@elliman.com

Data obtained from The Real Deal, New York Times and Prudential Douglas Elliman Real Estate.

November Out-Performs October in Real Estate Activity

This Friday heralds some promising news for the Manhattan real estate market. In New York City and Brooklyn, the monthly performance of the market is a positive. November has seen some modest improvements in both median and average sales price. There has also been an increase in number of closed transactions. The number of properties actively listed has decreased by 8.5%. As the year draws to a close, it will be interesting to see how the market is positioned to enter 2011.     

• Median sales price increased to $825,000 from $786,250.
• Average sales price increased to $1,390,403 from $1,216,157.
• Discount from Last Asking Price decreased to 5.4% from 5.6%
• Discount from Original Asking Price decreased to 10.9% from 11.3%
• Transactions under $1Million increased to 63% from 60%
• Transactions over $5 Million increased to 3% from 2%
• Transactions from $1 Million - $2 Million decreased to 23% from 27%
• Median number of days on market to contract signed, since last ask price, decreased to 52 days from 70 days.

Data has been provided by Prudential Douglas Elliman Real Estate. Check back next Friday for a quick snapshot of information on market performance in New York. Have a great weekend and please email any questions to:  mdubour@elliman.com.