Halstead Property

Mentioned in this Article:

Gregory J. Heym
Executive Vice President, Chief Economist

Manhattan Apartment Prices Fall As New York Loses Finance Jobs

By Oshrat Carmiel

Manhattan apartment prices fell for a third consecutive quarter as Wall Street job losses drained demand and the decline in co-op and condominium values reached 21 percent since the market peak.

The median price slid 10 percent to $810,000 in the fourth quarter from a year earlier, down from almost $1.03 million in 2008, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales jumped 8.4 percent to 2,473 as lower prices pushed transactions above the 10-year quarterly average.

Values continued to fall across apartments of all sizes as New York City recorded 10 percent unemployment in November. Fallout from the recession and credit crisis that cost more than 184,000 finance jobs in the Americas is still hurting New York. The city lost 25,200 finance jobs in the 12 months ending Nov. 30, the state Labor Department said Dec. 17.

“We have some big macro issues ahead of us,” said Jonathan Miller, president of Miller Samuel. “My view is: We’re not done.”

Five Manhattan property reports issued today showed overall price declines. The Corcoran Group, a New York-based broker that conducts its survey with the research company PropertyShark.com, said the median apartment price dropped 15 percent from a year earlier. Brown Harris Stevens and Halstead Property LLC put the decline at 11 percent and StreetEasy.com said the drop was 10 percent.

The number of apartments for sale dropped 25 percent from the previous year to 6,851, according to Miller Samuel and Prudential. The 10-year average of quarterly inventory for sale is 7,094 units.

‘An Anomaly’

Miller called the decline in inventory “an anomaly” brought on by a wave of buyer interest built up during the first half of 2009. More than 6,000 apartments in new developments have yet to be listed for sale, he said.

The biggest price reduction in the three months ended Dec. 31 was for a 43rd-floor, two-bedroom condominium in the Financial District’s William Beaver House, according to StreetEasy. The price was cut to $1.66 million from $3.05 million and the unit sold 10 days later for $1.53 million, according to StreetEasy.

A smaller proportion of Manhattan apartment sellers discounted their listings in the fourth quarter. About 27 percent of properties for sale carried price cuts, compared with 33 percent a year ago, according to StreetEasy. Condo sellers cut an average of 7.8 percent off their asking prices, while co- op sellers whittled an average of 7 percent from prices in the three months ending Dec. 31.

Hitting Bottom?

“If we have not hit a bottom, we have definitely hit a level of resistance here,” said Bill Staniford, chief executive officer of PropertyShark.com. “This is an area where buyers and sellers met and agreed there is value at this level.”

Studio apartments prices fell 11 percent from a year earlier to a median of $375,000, Miller Samuel and Prudential said. One-bedrooms dropped 7.6 percent to $661,000; two-bedrooms fell 23 percent to $1.24 million and three-bedrooms plunged 42 percent to $2.35 million.

Apartments with four or more bedrooms fell 38 percent to a median price of $5.4 million.

Three of the five most expensive closings of 2009 happened in the fourth quarter, according to StreetEasy. The priciest was a 12th-floor unit at 820 Fifth Ave. bought by Ken Griffin, founder of Citadel Investment Group, for $40 million. He bought from philanthropist Lily Safra and closed the deal last month.

South of 34th Street, sales at the Superior Ink Condominiums and Townhouses helped boost the average price for apartments with at least three-bedrooms by 39 percent to $4.67 million, according to Halstead and Brown Harris, both owned by Terra Holdings LLC.

“A lot of those units were bought some time ago,” reflecting prices at the peak of the market, said Gregory Heym, chief economist for Terra Holdings.

The market reports issued today are compiled from public records and brokers’ proprietary data.

Tuesday, January 05, 2010