Halstead Property

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

Gregory J. Heym
Executive Vice President, Chief Economist
(212) 546-1069

Manhattan Records Slide In Home Prices

The real estate market continues to thaw in Manhattan! Home prices have fallen in double digits in the fourth quarter and are down nearly 15 percent from the year ago median prices. The average price per square foot has also fallen by 17 percent.

Five Manhattan property reports issued by the Corcoran Group, PropertyShark.com, Brown Harris Stevens, Halstead Property LLC and StreetEasy.com all showed overall price declines.

Despite the fact that it is taking longer for homes to sell, there are clear indications of improvement in the housing sector.

Fewer price cuts

Properties can boast of numerous bids and in the latest quarter, fewer sellers cut prices. 27 percent of properties for sale went ahead with a price cut. This compares with the 33 percent of the inventories that went ahead with a price cut last year.

In fact, the spike in demand enabled 237 sellers, 20 percent more than last quarter, to increase prices on properties already up for sale in the market, said Sofia Kim of StreetEasy.com.

International buyers, who were conspicuous by their absence for much of last year, are back and willing to shell money. "Buyers realized that, if they kept sitting on the fence, all they'd get is splinters," said Pam Liebman, chief executive of Corcoran.

Lesser inventory

The inventory of unsold houses is definitively less. According to Miller Samuel and Prudential, the number of apartments for sale fell by a fourth to 6,851 in comparison to last year. In fact, the 10-year average of quarterly inventory for sale is 7,094 units.

However, Miller argued that over 6,000 apartments in new developments have not yet been listed for sale, hence the decline in inventory is “an anomaly”

"I just can't deny the improvement that we've had. There's been so much action...The risk of systemic failure has been priced out of the market," says Noah Rosenblatt, a broker in Manhattan, of the overall positive signs.

Still a see-saw

A year back, barely a few months had passed since the collapse of Lehman Brothers, the esteemed investment bank in the United States. The bankruptcy of the financial services sector behemoth also triggered a collapse in the housing sector and sent the Wall Street into a tailspin.

The professionals not only lost their bonuses but even their jobs. But things have turned for the better now which is fueling the recent sales activity.

"We are in a fragile economy. Things could go either way. If we see worse job numbers, it could weaken," Bill Staniford, CEO of PropertyShark.com, a foreclosure data Web site that collaborates on the Corcoran report.

Tuesday, January 05, 2010