General Sales Manager
The market looks softest in midtown where there is a 15-month supply of units on the market. In contrast, the Upper West Side is seen as the tightest, with a mere six month supply.
By Amanda Fung
The Manhattan market for condominium and co-op's has come back a fair distance from the lows plumbed in early 2009, but there is still one part of town where the market remains a bit soft and that's midtown, according to a recent analysis of the market.
In that river to river swath of Manhattan between 34th and 59th streets there were 1,320 units actively for sale in midtown as of the end of last year—a 15 month supply at current absorption rates, according to a recent analysis conducted by Vanderbilt Appraisal Company.
“Midtown is rarely a buyer's first choice, so demand is a little weaker and the level of supply of inventory tends to be higher,” said Michael Vargas, principal and co-founder of Vanderbilt.
In contrast, in the relatively hot Upper West Side market there are 1,016 units up for sale, a mere six month supply at current absorption rates. Vanderbilt says when there is more than a nine month supply of inventory prices tend to decrease, when there is a six to nine month supply prices tend to be stable and when there is a one to six month supply prices tend to rise.
When prices declined these past few years, “people were no longer priced out of prime areas,” said Jim Gricar, general sales manager at Halstead Property, referring to the Upper West Side and Upper East Side. As a result, he noted that today there is hardly anything available for sale in the Upper West Side.
“It's one of the tightest markets inventory-wise and prices there are on the rise there as a result,” he added.
In all of Manhattan, there were roughly 6,400 units for sale at the end of 2011, a nearly nine month supply according to Vanderbilt. That number of units was also down about 13% from September.
In the Upper East Side and in Upper Manhattan, above 96th Street on the east side and above 110th Street on the west, it will take roughly 10 months in both to absorb the current inventory of 1,624 and 615 units, respectively. Downtown, south of 34th Street, it will take eight months to absorb current inventory.
The residential sales market has come a long way from the Lehman Brothers crash in the fall of 2008, when the appraisal firm started tracking inventory and absorption. Six months after the collapse, it would have taken close to two years, a little over 20 months, to absorb all the units on the market. That glut sent prices lower.
“The market slowly but steadily rolled back to where we are now,” said Mr. Vargas. “Excess inventory was absorbed because prices fell.”
Mr. Vargas expects the sales market in Manhattan to remain stable this year for multiple reasons. They include the election, the fact that prices are not declining as much as they did three years ago and the lack of new development coming on the market for sale due to a drop in recent construction
Monday, February 06, 2012