Diane M. Ramirez
Gregory J. Heym
Executive Vice President, Chief Economist
BY Phyllis Furman
DAILY NEWS BUSINESS WRITER
The economy is dealing a heavy blow to the once frothy Manhattan real estate market.
The number of apartment sales completed in April, May and June were cut in half, while prices sank again, according to several reports released yesterday by Manhattan real estate brokerage firms.
"The market is much weaker than last year," said Jonathan Miller, CEO of real estate appraiser Miller Samuel, who prepared the report issued by Prudential Douglas Elliman. "Sales were off by 50% because of the weak economy, rising unemployment and, most important, the credit crunch."
The average price of a Manhattan apartment slumped 24% from last year to $1.26 million, according to a report issued by another real estate firm, Halstead Property.
The median price of Manhattan apartments also shrunk, dropping 19% from a year ago to $795,000, the lowest median price since the second quarter of 2007, Halstead said.
The grim numbers show a continuation of weakness in the Manhattan real estate market that began to falter last September. The researchers only focused on Manhattan, but the weakness in that borough is indicative of conditions citywide.
Among the properties worst hit in the quarter were the priciest apartments, with the average sales price falling 25% to $4.76 million, according to Prudential Douglas Elliman. The steep decline came as Wall Street pay shrunk and lenders froze up on providing larger mortgages.
"There was a lot of wealth that we're not seeing anymore," said Bill Staniford, CEO of PropertyShark.com, which prepared a report for brokerage giant Corcoran.
Price declines were less steep for apartments at the lower end of the market, where it was easier to get a loan.
While the second quarter numbers were bleak, several real estate execs said they're seeing positive signs that could foretell a recovery.
Corcoran CEO Pamela Liebman said prices have slumped, but deal activity is increasing.
While closings plummeted in April, May and June compared with the second quarter of 2008, they rose about 10% to 15% compared with the first quarter of this year, she said. Leading the way have been smaller, lower-priced apartments.
"The stalemate is over," Liebman said. "Buyers have returned."
Halstead President Diane Ramirez said she began to see an uptick in signed contracts in March. "I am seeing a light at the end of the tunnel," she said.
Thursday, July 02, 2009