Diane M. Ramirez
Gregory J. Heym
Executive Vice President, Chief Economist
Tight credit, a harsh winter and a return to seasonality led to a relatively quiet first quarter in Manhattan, according to several residential sales market reports released today by some of New York City's top firms. While reports from Prudential Douglas Elliman and the Corcoran Group show a rosier picture than those from sister companies Brown Harris Stevens and Halstead (which release the same data), experts across the board agreed that the market is stable.
The median home sales price dropped to $782,071 in the first quarter of the year, down 9.9 percent from the same time a year earlier and 7.4 percent from fourth-quarter 2010, according to the Elliman report. That decline was led primarily by re-sale units, which saw their median price drop to $725,000, down 12.7 percent year-over-year and 9.4 percent from fourth-quarter 2010.
That price drop was due in part to the disparate sales activity in the co-op and condo markets, according to appraiser Jonathan Miller, CEO of Miller Samuel, and the preparer of the Elliman report. The number of co-ops sold last quarter jumped 28.7 percent to 1,430, compared to the same time a year ago, while the number of condo units sold dropped 24.3 percent to 964 during that same time period. Overall, sales activity across the entire market was flat year-over-year, climbing just .4 percent with 2,394 total homes sold, and was up 4.3 percent from fourth-quarter 2010.
"A lot more co-ops [sold] than condos and condos are more expensive," Miller explained. "[It's] a stable but weak market that has rebounded significantly from the low period two years ago but still isn't out of the woods."
Even so, Dottie Herman, president and CEO of Elliman, said that financing is still an issue for many buyers.
"The biggest problem going forward, I still think is the credit," Herman said. "Whatever you could have afforded to buy last year… you can't afford this year. Not because [you don't have the income] but because of banks."
Corcoran's report showed a similar percentage in sales, with a 6 percent year-over-year climb to 3,250. That number is up 7 percent from fourth-quarter 2010. Similar to other reports, the median sales price, meanwhile, dipped slightly -- by 5 percent year-over-year -- and 2 percent quarter-over-quarter -- to $800,000.
Corcoran CEO Pamela Liebman wasn't available for comment.
The report from Brown Harris Stevens and Halstead, however, paints a bleaker picture than the ones from Elliman and Corcoran when it comes to sales activity. Manhattan sales dropped 23 percent year-over-year and 7 percent quarter-over-quarter to 1,769, according to the report, compiled by Gregory Heym, chief economist for the parent company, Terra Holdings. But, when it came to median sales price, like Elliman and Corcoran, Terra Holdings' report showed a 4 percent drop to $787,500 compared to a year earlier and a roughly 6.2 percent change from the previous quarter.
Heym said the expected expiration of the Bush-era tax cuts artificially inflated sales volume at the end of last year, leading to a "one-quarter malaise," while adding that, despite the pronounced drop in sales activity, he doesn't anticipate that the trend will continue.
"I expect to see continued stability in the market," Heym said. "The local economy is continuing to do very well."
Diane Ramirez, president of Halstead, said that while the number of sales was down in the first quarter, the level of activity was in a healthy range for typical winter quarter sales. Ramirez noted that unexpected influences, like the battery of snow this past season and the tumultuous geopolitical climate, took their toll.
"Those factors always concern me. You always have to keep [those] in the back of your mind," Ramirez said, adding that increased lender caution has also caused a slower sales environment.
"It's just not the heyday, which was not a healthy thing," Ramirez said of the more relaxed lending environment of the boom years. "People actually need to be financially sound to be able to get financing, which is the way it should be."
A report from real estate listing site Streeteasy.com, released today, also shows a considerable drop in both the number of homes sold and the closing price. The site saw about 2,400 closings during the first quarter of the year, down 27.4 percent from a year ago and 21.1 percent from the previous quarter. The median price, according to Streeteasy.com, declined .6 percent year-over-year and 7.8 percent quarter-over-quarter to $770,000.
Friday, April 01, 2011