Diane M. Ramirez
Gregory J. Heym
Executive Vice President, Chief Economist
The third quarter of 2010 was sending out all sorts of mixed signals about the state of the Manhattan real estate market. While prices and sales activity seemed to be performing well, there was fear about what the expiration of the first-time homebuyers' tax credit and some grim national housing news meant for the market around these parts. Would you believe that after all that buildup, things are surprisingly... normal? That's the buzzword in the major brokerages' quarterly market reports, released today. In press releases, Corcoran calls the third quarter results "the new normal," Elliman saw a "more historically normal number of sales and inventory levels," Halstead says thing are stabilizing "towards a more normal market," etc. So on this crazy island, where money is no object and yet a laundry machine is seen as some rare gift from the gods, what's normal?
Basically, a return to seasonality, and prices that aren't heading backwards. Spring is typically the busiest selling season, and then there's a drop off in both sales and available inventory during the summer, before the post-Labor Day inventory boom. Depending on which report you're looking at, the number of sales was down 2% to 19% from the spring, and up 4% to 19% over last year (though, curiously, Corcoran reported a slight decrease in sales from last year as well). The brokerages also reported that a bigger mix of apartment sizes sold, whereas the dark Post-Lehman days of two years ago essentially froze sales of anything that might make a mortgage broker sweat.
As for prices, the numbers also differ slightly, but each brokerage pegged the average sales price of a Manhattan apartment during the quarter at over $1.42 million, up from last quarter and last year. That's where those three- and four-bedroom apartment sales are having a serious impact. Median sales price, a better metric for most, hovered between $890,000 and $914,000, again improving on both the last quarter and 2009.
Sales in new developments had mixed results in both quantity and price (check the reports for more thorough breakdowns), with Corcoran reporting an 11% drop in median sales price from last year, and Brown Harris Stevens/Halstead seeing a 5% drop in price-per-square-foot, to an $1,112 average. More than half of the new development sales went into contract in 2010, so there aren't too many pre-bust lingerers inflating the numbers. Meanwhile, co-ops had a heck of summer. For example, the Elliman report lists an average co-op sales price of $1.25 million and median sales price of $777,500, both up double-digits from last quarter and up about 24% from last year. The number of co-op sales, 1,320, was a 32% improvement over 2009. Who says nobody can stand co-op boards?
As always, your thoughts, observations and prophecies are welcome in the comments. And just in case the brokerages don't do it for you, StreetEasy has a report too (warning: PDF), including data on contract activity. In the quarter, 1,832 listings went to contract, a 37% decrease that can't just be blamed on summer vacations. That's also a 30% dip from last year. Will people get back in the buying mood?
Friday, October 01, 2010