Wednesday 16 May 2012

Real Estate Prices Are Steady in Manhattan, but Sales Fall


The Manhattan real estate market closed out 2011 with prices relatively flat, but sales volume for the fourth quarter was down by more than 12 percent from the previous year largely because of shrinking condominium inventory as fewer new developments came to market, according to reports that will be released by the city’s major brokerage firms on Wednesday. 
The median fourth-quarter sales price was $855,000, down 1.2 percent from the same time in 2010, according to one report, from Prudential Douglas Elliman. The figure is far from the market’s peak in 2008, when the median was close to $1 million, but up from the bottom in 2009, when the median hovered around $800,000. 
The number of sales, however, was only 2,011, a 12.4 percent drop from 2010 and a surprising 35.3 percent drop from the third quarter of 2011, according to Elliman’s report. “That’s a pretty sharp quarterly drop, and I don’t know if it’s a precursor to lower activity going forward,” said Jonathan J. Miller, the president of the appraisal firm Miller Samuel and the author of Elliman’s report. 
Fourth-quarter sales volume typically drops off by about 9 percent from the third quarter, because of a slowdown during the holidays. But Mr. Miller said that the 35 percent decrease was probably “a byproduct of the last six months of global economic volatility, which translates into a pause until consumers figure out what it all means.” 
Dottie Herman, the chief executive of Elliman, said the 35 percent drop may have been exaggerated because third-quarter sales volume was unusually high amid heavy interest from foreign buyers when the dollar was at its weakest. “But over all, prices and volume wasn’t that different from the previous year, and I think this year, in 2012, we’re probably going to have a lot more of the same,” she said. 
Diane M. Ramirez, the president of Halstead Property, said she was not alarmed by the year-to-year decrease in sales because the 2010 figure had been inflated by a surge in sales in the last months of that year, as buyers rushed to make purchases before an anticipated increase in capital gains taxes. The capital gains tax rate had been scheduled to return to 20 percent from 15 percent in 2011, but Congress extended the lower rate just before it was to expire. “I think what we’re seeing is just the normal ebb and flow of the market,” she said. 
Pamela Liebman, the chief executive of the Corcoran Group, said the drop in sales volume was largely propelled by a dip in the number of new developments coming to market. While co-op inventory remained stable, she said, condo inventory, at 3,466, decreased 11 percent from 2010. 
While some areas, including parts of Harlem, still have new condo projects on the market, downtown neighborhoods like the West Village and Chelsea have extremely low inventory. “We’ve had a lot of clients hungry for great condos in the West Village, and we have had nothing to show them,” Ms. Liebman said. 
A report by Streeteasy.com showed overall inventory at 13,147, down 5.9 percent from 2010. “I think inventory being down is actually a good thing, because it keeps prices from plummeting even more,” said Sofia Song, Streeteasy’s vice president for research. “It suggests that a lot of sellers are holding on to their properties to wait out the market.” 
The reports also show that luxury sales of $3 million and up continued to be strong. At the super-high end, there were 23 sales with price tags of $20 million or more in 2011, the highest annual number since 2008, according to Ms. Liebman. 
Hall Willkie, the president of Brown Harris Stevens, said luxury sales rebounded early in 2011 and held strong throughout the year. His firm registered three sales over $20 million in the last three months, and will soon record the record-breaking $88 million sale of apenthouse at 15 Central Park West. 
At nearly $13,000 per square foot, Mr. Willkie said, “that price may prove to be a one-off and not a proxy for anything.” He said, though, that apartments at One 57, the Extell Development Company’s 90-story hotel and condominium tower across from Carnegie Hall, which is not scheduled to open until 2013, were selling for $10,000 per square foot. 
“But even with all these extraordinary sales we’ve seen,” he said, “the high end, like the rest of the market, is still very price-sensitive. Buyers have to feel that prices are justified.” 
Ms. Herman said she expected the bookends of the market, at the entry and luxury levels, to continue to do well. “But what’s getting killed is the middle market,” she said, “the average person who’s looking to trade up and trying to spend between $700,000 and $1.1 million.” 
Because banks have tightened their lending restrictions so much, she said, many of those buyers “have no borrowing power, even if they have good, steady jobs.” Until financing loosens up, she said, many of those buyers will be unable to trade in their entry-level apartments for larger spaces.
Thanks and Regards

Bidding Wars Amid Flat Property Prices in Manhattan


        Prices for Manhattan real estate were relatively flat in the first three months of the year, but brokers anticipate a much stronger spring sales season, saying that many properties had recently prompted bidding wars, indicating a new level of buyer confidence. 
The median sale price for the first quarter was $775,000, unchanged from the same period in 2011, according to a report from Streeteasy.com that will be released on Tuesday. Reports from New York City’s largest brokerages also indicate relatively steady pricing, with one showing the median dropping by 1 percent and others an increase of 4 percent to 6 percent. 
The average price rose, with Brown Harris Stevens and Halstead Property showing a 9 percent increase over last year to $1.48 million. That number, however, was skewed by strong sales in the luxury market, including an $88 million penthouse at 15 Central Park West. 
Hall F. Willkie, the president of Brown Harris Stevens, which represented the buyer and the seller in the $88 million deal, said the sale “had an immediate effect on comparable properties, but it also had an impact on the overall market in terms of confidence.” 
“It provided an emotional lift across the board,” he continued. 
The reports reflect deals that went into contract late last year and that closed through the end of March, but brokers said many of the sales that had gone into contract in recent weeks involved multiple bids above the asking price. 
Bidding wars returned to the market last year, but Halstead’s president, Diane M. Ramirez, said that until recently most of the bidding merely drove the sale price close to the list price. “It’s definitely a good sign that things are now starting to go over ask,” she said. 
That trend has been seen at all levels of the market, Ms. Ramirez added, but typically only when an apartment is in good condition, in a good location and priced well. She said sellers who listed their homes above the market rate to add a cushion for negotiation were making a mistake. 
“If you’re not priced correctly, everyone will walk right by you,” she said. 
Pamela Liebman, the chief executive of the Corcoran Group, said that after two years of stable pricing, “I think we’ve finally gone beyond steady and are starting to get into a real uptick.” Corcoran’s report showed the strongest numbers, with the median rising 6 percent to $809,000. 
Ms. Liebman said luxury sales buoyed the market. She mentioned two listings that recently drew multiple bids and went into contract within a few weeks of coming to market: a $24.5 million duplex on the Upper East Side and a $7.95 million West Village town house. “I think buyers have gotten the message that if you’re ready to buy, be prepared to bid aggressively and to sign quickly,” she said. 
A $24 million apartment owned by the reclusive heiress Huguette Clark, who died last year, also went into contract within a week of being listed last month. Mr. Willkie, whose agency represents the Clark estate, would not say if the bidding pushed the price for the 12th-floor apartment over the asking price. Mrs. Clark’s two other apartments in the same Fifth Avenue building, priced at $12 million and $19 million, are still available. 
On the low end, Jonathan J. Miller, the president of the appraisal firm Miller Samuel and the author of Elliman’sreport, said there was a surge in sales of studios and one-bedrooms. The market share for those small apartments rose to 56.2 percent, the highest percentage since late 2009 and up from 49.4 percent last year. 
“The entry level came back strong,” said Dottie Herman, the chief executive of Prudential Douglas Elliman, “because people know that rents are only going to go up, and at the same time they’re worried about interest rates spiking. All those things make it more appealing to buy right now.”

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