The Financial Times reports that residential real estate prices fell in the third quarter in Manhattan, according to data from a real estate appraisal firm.
Getting good data about Manhattan real estate activity can be a tricky affair, since a big chunk of the market is co-operatives (buyers acquire shares in the co-op corporation, which then give a proprietary lease to the unit) and those sales are not recorded with the city. However, the seemingly favorable comparisons have masked earlier signs of decay. As happened in other markets, demand for the best properties held up well, while the rest of the market eroded, and a higher proportion of big-ticket sales led to rising averages.
The story also does not mention that the city was in the throes of a major building boom, and there are more apartment buildings coming on the market (two large ones within a ten minute walk of my apartment, for instance). That inevitably will have a further price-depressing effect.
From the Financial Times:
Manhattan real estate prices have joined the rest of the US in a downward tumble.
The average sales price of property on the island fell by 11.3 per cent to $1,480,363 in the three months to the end of September according to data from Miller Samuel, a real estate appraiser, compared with the previous quarter.
The data points to still deeper plunges ahead because it registers closings of sales, which are normally at least three months – and in the case of newly built apartments can be more than a year – after parties agree to a sale.
Real estate brokers say that sales have come to a near standstill since the government takeover of Fannie Mae and Freddie Mac in early September…
“The events of the second half of September in the financial markets and Washington have not shown up in the market data for the quarter aside from the continuation of a lower level of sales activity compared to last year’s record levels,” said Jonathan Miller, who runs Miller Samuel…
Over the year, the picture appeared rosier, with average prices significantly higher, up 8.1 per cent on average. The median price was up 7.4 per cent to $928,263.
The sharp drop in price more recently came as banks tightened lending standards and the number of properties changing hands shrank, but also because initial sales of super-luxury properties costing as much as $40m at locations like 15 Central Park West and The Plaza have nearly completed.
The median price of the top 10 per cent of properties sold fell by 18.7 per cent in the quarter, even as the inventory of these high end apartments and condos soared by 89 per cent.
However, even excluding the sales of properties at these spots the sales price of apartments was down 6 per cent at $1,399,524, according to data from Brown Harris Stevens.
The price of condominiums (which fell by 6.6 per cent to $1,809,684) held up better than that of co-ops ( which dropped by 9.3 per cent to $1,161,302). Condominium prices were stronger.
A litany of other figures underlined the downward slope that the market appeared to be on.
Sales fell 24.1 over the year to 2,654 units compared with 3,499 units sold a year ago.
The inventory of homes for sale was up 34.6 per cent to 7,003 units from the prior year total of 5,204 units.
The average number of days properties waited on the market rose by 11 to134 days.