Gregory J. Heym
Executive Vice President, Chief Economist
By: S. Jhoanna Robledo
Residential real estate industry insiders are letting loose with their fourth-quarter market reports today, and the news is, well, not great. But it’s not the spanking some may have expected. Some highlights:
• The average sales price of a Manhattan apartment finally fell, at least according to Halstead Property’s findings, but only slightly — 2 percent — from the previous quarter. It’s still steep: $1,449,621. (Jonathan Miller’s Prudential Douglas Elliman report shows prices practically unchanged from the previous quarter.)
• Resales most definitely took a hit. Median sales prices are down 10.1 percent from the previous quarter, and 3.1 percent compared to the same time period in 2007, per the Elliman report. Streeteasy.com saw resale median prices for co-ops dipping 5.2 percent from third-quarter figures, and by 2.4 percent compared to 2007. Corcoran’s numbers found the biggest dips in East Side two- and three-bedrooms, which fell by at least 22 percent.
• At first glance, new developments don’t seem to be doing as badly as everyone says they are. Per the Brown Harris Stevens report, average prices are up 3 percent from the previous quarter to $1,717,115, as are number of sales. Then again, economist Gregory Heym, who compiled statistics for both BHS and Halstead Property, points out that new developments “close long after contracts are signed,” meaning they were bought long before the market turned shaky. The average signing date was November 2007, he says, a full year before the economic shakedown really took hold.
Miller says new developments have actually witnessed “a sharp decline in sales activity and price levels. A periodic sampling of sales contracts showed a decline of 35 percent to 75 percent compared to the same period last year. Current contract price levels show an average DECLINE of 20 percent from August 2008.”
• Inventory’s creeping up. According to Streeteasy.com, “an average of 338 new listings came onto market every week” in the fourth quarter compared to 299 per week from July to September.
• As usual, each brokerage firm had slightly different stats, but more than one exposed a telling nugget: Buyers ran away from the market in droves. Transactions are drastically off in Manhattan from the previous quarter — from 4,300 closings to roughly 2,900, per Streeteasy.com; from 2,654 to 2,282, according to Miller; or, percentage-wise, declining by about 40 to 50 percent, according to Corcoran’s estimates. Streeteasy.com’s data shows 1,233 new contracts signed in those three months, a 37 percent decrease from the summer/early fall.
• Finally, it takes a lot longer to sell an apartment these days. Halstead Property pins the wait time at 100 days, sixteen more than the fourth quarter of 2007 and nine more than the third quarter of 2008.
The outlook for the upcoming three months? Foggy with a chance of more hand-wringing. “These were pre–Lehman Brothers numbers,” says Heym of his reports. “The [present] anxiety is not going to be reflected till the first or second quarters [of 2009].”
Tuesday, January 06, 2009