Halstead Property

Diane M. Ramirez
President
dramirez@halstead.com
(212) 381-3203

Manhattan Residential Market Ends Year On Up Note

By Amanda Fung

If the final quarter of 2009 is any indication, the residential real estate market is in line for a good year in 2010. For the first time since the market collapsed in late 2008, sales activity and inventory in Manhattan stand at near normal levels, according to a number of market reports released Tuesday.

The number of transactions continued to increase toward the end of 2009. During the final quarter, the number of sales rose to 2,473, up 8.4% from the same period a year ago, and up 10.9% from the previous quarter, according to a report by Prudential Douglas Elliman and Miller Samuel Inc. The number of deals was the big surprise as it actually exceeded the 10-year quarterly average of 2,297 transactions, said Jonathan Miller, chief executive of appraisal firm Miller Samuel. He attributed the spike to “a release of pent-up demand.”

A separate report prepared by The Corcoran Group and PropertyShark.com paints an even brighter picture. It estimates that 3,400 sales closed during the quarter, a sharp, 48% jump from the same quarter 2008.

“This is all good. We are seeing historically normal levels of sale activity and inventory, prices are stabilizing,” Mr. Miller said. “This is as optimistic as it could get.”

Inventory continued to drop toward the end of the year. There were 6,851 listed units, down 24.6% from the fourth quarter 2008, Mr. Miller said. That figure was slightly below the 10-year average of 7,094 units. However, Bill Staniford, CEO of PropertyShark, warned that the inventory decrease may owe to people who have held off on putting their homes on the market because the market has come down significantly.

Diane Ramirez, president of Halstead Property, attributes the lower inventory figures to the fact that properties priced below $5 million were getting absorbed late last year. In contrast, the $5 million-plus properties are still lingering on the market because it was the last segment in the market to show signs of a recovery, she added.

Prices continued to stabilize in the fourth quarter, a stark contrast from the first half of 2009 when prices plummeted by as much as 25%. Median sales prices were down 10% to $810,000 from the same period last year, Mr. Miller said. Prices were down just 4.7% from the third quarter.

“By the time we hit the end of the year there was a comfort zone,” said Pamela Liebman, CEO of The Corcoran Group. “Sellers got real with prices. Buyers realized there is opportunity out there, and confidence has increased.”

Industry experts expect the market to continue to recover. The first-time home buyer credit extension and expansion, as well as low interest rates, are expected to help sales and encourage buyers to come out.

“The last quarter, which is traditionally slow, was very active, and that will continue through the first quarter,” said Dottie Herman, president and CEO of Prudential Douglas Elliman.

Tuesday, January 05, 2010