Manhattan Real Estate: Adapting to Change Reflected in Increased Sales

Manhattan Real Estate 4Q 2009

2009 was a new era in New York Real Estate and buyers, sellers and real estate professionals have slowly adapted to the changes.  We have seen the adoption of stringent, if not irrational mortgage underwriting to combat the irrationally lenient mortgage underwriting of the years before. We have seen layoffs, elevated unemployment, lower compensation, sharp real estate price corrections and a shadow inventory of new developments. We have discovered first-time home buyers’ tax credits, rising foreclosures, expanding marketing times and a host of other challenges. Welcome to the 4^th quarter of 2009 market report.

While the increased level of sales in the fourth quarter of 2009 was encouraging, longer marketing times and larger discounts shed the harsh light of reality on those encouraging statistics. What that suggests is there is a buying public signing contracts but sellers have to concede on price to reach those buyers otherwise their apartments will sit on average 204 days. A true sustainable housing recovery is still hurtles away and will be marked by a meaningful decline in unemployment and greater consumer access to credit. With that said the below report is a marked improvement from a year earlier.

4Q Market Report Highlights

• The number of sales increased over the prior year quarter as inventory fell. There were 2,473 sales in the current quarter, up 8.4% from the 2,282 sales in the prior year quarter and up 10.9% from the prior quarter.
• The median sales price of a Manhattan apartment was $810,000 in the fourth quarter, 10% below $900,000 in the prior year quarter and 4.7% below the $850,000 in the prior quarter.
• Average sales price fell to 12.7% to $1,296,156 from the prior year quarter and down 2.1% from $1,323,462 in the prior quarter.
• Price per square foot was $1,051 in the fourth quarter, down 11.2% from the prior year quarter result of $1,183 but up 5.5% from the prior quarter result of $996.
• The average days on market was 204 days in the fourth quarter, up 28.3% from the prior year quarter average of 159 days and jumped 22% from 167 days in the prior quarter. Since this metric is based on closed sales, it includes properties that entered the market in the first half of 2009 that languished until the number of sales surged in the third quarter.
• The return to more normal historical levels of sales activity was reflected in the decline in inventory levels. There were 6,851 active listings at the end of the quarter, a 24.6% decline from 9,081 listings in the same period a year ago, but down 18.3% from 8,389 listings in the prior quarter.
• Listing discount—the spread between the list price at the time of contract and the contract price—increased to 12.8% in the fourth quarter from 7.3% in the prior year quarter and from 7.6% in the prior quarter.

Manhattan Co-Op Market

• The median sales prices of a Manhattan coop was $630,000, down 8.4% from the prior year quarter median sales price of $688,000 and 2.9% below the prior quarter median sales prices of $649,000.
• The average sales price was $1,005,744, down 13.4% from the prior year quarter average sales prices of $161,302 and 5.9% below the $1,068,726 seen in the prior quarter
• Price per a square foot was $866, down 5.6% from $917 per square foot in the prior quarter.

Manhattan Condo Market

• The median sales price of a Manhattan co-op was $630,000, down 6.7% from the prior year quarter result of $675,000 and unchanged from the prior quarter.
• The average sales price was $975,049 in the fourth quarter, down 19.6% from the prior year quarter, down 19.6% from the prior year quarter average sales prices of $1,213,382 and down 3.1% from $1,005,744 in the prior quarter.
• Price per a square foot was $921, down 13% from $1,059 in the prior year quarter, but up 6.4% from $866 in the prior quarter.

Manhattan Luxury Market

• The median sales price was $3,780,000 in the fourth quarter, 8.5% below the prior year quarter result of $4,132,516 and 3.2% below $3,905,000 in the prior quarter.
• The average sales prices was $4,863,673 in the current quarter, down 12.5% from the prior year quarter average sales prices of $5,559,502 and essentially unchanged from the $4,881,561 average sales price of the prior quarter.

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