By Carter B. Horsley
Fourth quarter reports about Manhattan's luxury
condo and co-op apartment market indicate a slight improvement
with increased sales and lower inventories.
In his report for Prudential Douglas Elliman,
Jonathan Miller of Miller Samuel Inc., said that "there were
2,473 sales in the fourth quarter, up 8.4 percent from the 2,282
sales in the prior year quarter and up 10.9 percent from the prior
quarter," adding that "This level of activity was more
than twice the 1,195 sales seen in the first quarter of 2009,
which had been lowest level of sales in nearly 15 years."
Mr. Miller said that "there were 6,851
active listings at the end of the quarter, a 24.6 percent decline
from 9,081 listings in the same period a year ago, but down 18.3
percent from the 8,369 listings in the prior quarter." "Excess
inventory was worked off the surge in summer and fall sales activity,
ordinarily seen during the spring market," he said, adding
that "This drop in the number of listings was also compounded
by the seasonal trend of sellers withdrawing listings over the
end of the year holiday season and re-listing in the New Year."
He also noted that "this decline in listing inventory does
not include the 'shadow inventory' of stalled new development
projects, which is estimated to be in excess of 6,000 units."
Prices, however, continued "to show weakness,"
according to Mr. Miller, noting that "the median sales price
of a Manhattan apartment was $810,000 in the fourth quarter, 10
percent below $900,000 in the prior year quarter and 4.7 percent
below the $850,000 in the prior quarter." Average sales
prices, he continued, fell 12.7 percent from the prior year quarter
to $1,296,156 but the average price per square foot of $1,176
was only 0.6 percent lower than the prior year quarter. Listings
took an average of 204 days on the market to sell in the fourth
quarter, he said, up 28.3 percent from the prior year quarter.
"Buyers, sellers and real estate professionals
have slowly adopted to changes including stringent, if not irrational
mortgage underwriting, elevated unemployment and layoffs, lower
compensation, a sharp price correction, shadow inventory, first
time home buyers tax credit, rising foreclosures, declining appraisal
quality, expanding marketing times and a host of other challenges.
While the increased level of sales in the second half of 2009
was encouraging, a true housing recovery will be marked by a meaningful
decline in unemployment and greater consumer access to credit,"
Mr. Miller maintained.
The Brown Harris Stevens report for the Fourth
Quarter indicated that "co-op prices averaged $990,921,"
10 percent lower than a year ago and "declines continued
to be led by three-bedroom and larger co-ops" whose average
sale price declined to $3,001,012 from $4,279,841 a year ago.
Condos, on the other hand, the report continued, saw prices rise
slightly from a year ago with "a 33 percent increase in the
average price of three-bedroom and larger condos" to $4,574,080
from $3,443,710 a year ago.
The average price for lofts in the fourth quarter
was $1,017, six percent higher than the prior quarter but 14 percent
below a year ago, the report said, adding that buyers paid an
average of 95.4 percent of the seller's last asking price for
apartments that were not new developments in the fourth quarter,
"up slightly from a year ago."
It found that on the Upper East Side prices
for studios fell 12 percent over the past year, while one-bedroom
prices fell 19 percent, two-bedroom prices fell 22 percent and
apartments with three or more bedrooms fell 20 percent. Prices
on the Upper West Side, however, it continued, fell less.
The Halstead Property report found that the
average price per square foot for condos on the Upper East Side
fell to $1,168 in the fourth quarter from $1,378 the year before,
and that the average price per room of pre-war co-ops there fell
to $348,425 from $422,393 the year before while the average price
per room of post-war co-ops there fell to $204,713 from $238,700.
On the Upper West Side, the Halstead report
found that the average price per square foot of condos fell to
$1,267 from $1,455 the year before and that the average price
per room of pre-war co-ops there fell to $215,967 from $239,806
the year before while the average price per room of post-war co-ops
fell to $189,264 from $216,967 the year before.
The report said that the average price per
square foot of condos downtown rose to $1,326 from $1,262 the
year before. It also said that the average price per room of
co-ops in Northern Manhattan rose to $120,601 from $107,217.
"This quarter there is reason to be hopeful
that the significant devaluation we have tracked since the demise
of Lehman Brothers is coming to an end. Values are still down
significantly compared with 2008 (median prices are 15 percent
lower than they were one year ago' average price per square foot
is 17 percent lower). However, prices in the Fourth Quarter were
essentially unchanged from the Third, suggesting that buyers and
sellers reached price equilibrium after twelve months of downward
pressure. This was particularly apparent in the comparison of
quarter-over-quarter resales: the median price for a re-sold apartment
in the Fourth Quarter was $725,000, down 3 percent from the prior
quarter; while the average price per square foot rose 1 percent
to $936," Pamela Liebman, chief executive officer of The
Corcoran Group, reported.
"Additionally," she continued, "there
is a clear and growing confidence overtaking consumers as the
number of transactions in this quarter easily outpaced the prior
year. Overall there were 48 percent more closings this quarter
than in the Fourth Quarter of 2008, and 64 percent more re-sale
closings. With homeowners reluctant to list their properties
and savvy buyers taking advantage of price reductions, the total
available inventory has decreased 36 percent since its peak in
March, gradually reducing the broad selection buyers had to choose
"The rumored influx of significant bonus
money in the financial sector and the promised repayment of TARP
funds by Citibank and Wells Fargo are promising indicators for
sales activity and buyer confidence in the new year," Ms.