Gregory J. Heym
Executive Vice President, Chief Economist
By JOSH BARBANEL
After a year of declines in Manhattan co-op and condominium sales, the residential market has perked up enough for real estate appraisers and brokers to at least debate the question on the minds of many New Yorkers: Has the market reached a bottom yet?
Market reports released on Friday showed that during this year’s third quarter, July through September, the number of sales rose steeply from the second quarter, but remained below the levels of last year’s third quarter.
Sale prices moved roughly sideways, with some up and some down, compared with those in the second quarter, though the prices of loft apartments and new condominiums continued to fall, according to third-quarter data.
A report by one broker, Prudential Douglas Elliman said the number of sales was up 45.6 percent from the second quarter, but down 16 percent from the third quarter of last year. It put the average co-op and condo apartment sale price at $1.32 million, off 10.6 percent from the same quarter in 2008, but up 0.8 percent from the second quarter. Co-op prices were down 5.9 percent from the previous quarter, while condominium prices were up 3 percent.
Jonathan Miller, an appraiser who, as the president of Miller Samuel Inc., prepares the market report for Prudential Douglas Elliman, said that while the Manhattan housing market may be improving in some ways, it had “not yet found a bottom.”
Mr. Miller cited high local unemployment, tight credit and a “shadow inventory” of new condominiums not officially listed on the market as reasons for pessimism. On the other hand, he noted, sales have picked up and the number of owners listing apartments is falling.
Dorothy Herman, the president of Prudential Douglas Elliman, was more upbeat. She said that her firm had experienced its busiest summer in years, because buyers who had been “unwilling to pull the trigger” in the spring had more confidence in the market. “We see the market as stabilizing,” she said. “It has hit bottom.”
Hall F. Willkie, the president of Brown Harris Stevens, another broker, declared that with the rebound in the stock market and slowing job losses, buyers were becoming more comfortable. “Confidence is returning to the marketplace,” he said.
Pamela Liebman, the chief executive of the Corcoran Group brokerage firm, said that “if we are not at a bottom, we are close to it.” She added that the rise in sales and the decline in inventory were strong signs of an improving market at a time when the Wall Street bonus season is approaching.
She said listings in September had fallen to the lowest level in a year and were nearly 10 percent below the level of a year ago, when the economy staggered after the bankruptcy of Lehman Brothers.
Yet despite the increase in sales, she said she had seen little evidence that prices will rise significantly in the near future. In fact, she said, the average sale price on Upper East Side town houses is still 50 percent below the price in the first quarter of last year.
Gregory J. Heym, an economist who prepared the market reports for Brown Harris Stevens and another brokerage, Halstead, said that despite the surge in sales and increased confidence, prices of large Upper East Side apartments with three or more bedrooms lagged 42 percent below the prices of a year ago, and 12 percent below the second quarter.
He said that during the third quarter of last year, there were eight sales of apartments for more than $20 million, including two for over $40 million and four others between $30 million and $40 million. In the last quarter, he said, there was only one sale of more than $20 million.
The Elliman report put the average sale price of a co-op at $1 million and the median price at $630,000. It found that the average price of a condominium was $1.58 million, while the median price was $1.02 million.
Spring is usually the busiest season for apartment sales in Manhattan. But Mr. Miller said that because sales in the spring were chilled by difficult economic conditions, the usual surge in sales happened later, during the third quarter, rather than in the second quarter. “The spring market in effect occurred this summer,” he said.
Friday, October 02, 2009