The Douglas Elliman Report: Manhattan Sales 1Q 2011 — Prepared by Miller Samuel

Report Reveals Prices Below Last Year, Listing Inventory Continues to Decline, Overall Sales Activity Remains Stable

NEW YORK, April 1, 2011 /PRNewswire/ — The Douglas Elliman Report:  Manhattan Sales 1Q 2011 reveals the first quarter of the Manhattan housing market showed a modest uptick in sales but declines in all the price indicators.  However, the declines were generally attributable to the expiration of the tax credit last spring and the significant shift in the sales mix toward co-ops over condos – markets that performed very differently in the quarter.  Inventory edged lower and the number of contracts increased from the prior quarter.

“While there were about the same number of Manhattan co-op and condo sales as there were last year at this time, overall prices were below last year’s levels as the market began to move away from the expiration of the federal homebuyers tax credit in mid-2010,” said Jonathan Miller, President/CEO of Miller Samuel, the firm that prepared the report.   

“Although housing continues to face economic challenges from high unemployment and tight credit conditions, the market has rebounded significantly over the last year and a half,” added Dottie Herman, President and CEO of Prudential Douglas Elliman.  ”We look forward to a healthy and stable 2011.”

Key Trend Metrics

– Price per square foot was $1,025, down 1.3% from $1,038 in the prior year quarter and down 3.2% from $1,058 in the prior quarter.

– Median sales price was $782,071, down 9.9% from $868,000 in the prior year quarter and down 7.4% from $845,000 in the prior quarter.

– Number of sales edged 0.4% higher to 2,394 from 2,384 sales in the prior year quarter and rose 4.3% from 2,295 sales in the prior quarter.

– Pending price index rose 7.1% from the same period last year but slipped 3.2% from the prior quarter.

– Pending sales index fell 14.2% from the same period last year but jumped 12.5% from the prior quarter

– Listing inventory fell 5.3% to 7,605 units from 8.027 units at this time last year.

– Days on market was 127 days, up slightly from 123 days this time last year.

– Listing discount was 4.5%, down from 5.3% in the same period last year.

Co-op Market

– Price per square foot of a co-op this quarter was $896, down 1.3% from $908 in the prior year quarter.

– Number of sales surged 28.7% to 1,430 units, from 1,111 units in the same period last year.

-Listing inventory levels for co-ops increased 5% to 3,998 units from 3,809 units in the prior year quarter.  

– Co-ops accounted for 59.7% of all apartment sales, its highest market share in 6 years.

Condo Market

-Price per square foot of a condo this quarter was $1,216, up 5.4% from $1,154 in the prior year quarter.

-Number of sales dropped 24.3% to 964 units, from 1,273 units in the same period last year.

-Listing inventory levels for condos fell 14.5% to 3,607 units from 4,218 units in the prior year quarter.  

-Condos accounted for 48.3% of all apartment sales and 40.3% of all active inventories this quarter. 

Luxury Market (upper 10% of all co-op and condo sales)

-Price per square foot was $1,899, up 1% from the prior year quarter result of $1,881.

-The lower limit of the top ten percent of all sales this quarter was $2,750,000.

-Listing inventory fell 31.8% to 1,025 units from the same period last year.

-Days on market were 128, down sharply from 193 days in the prior year quarter.

-Listing discount was 5.6%, up from 3.6% this time last year.

Loft Market (co-op and condo sales)

-Price per square foot was $1,101, down 1.8% from the prior year quarter result of $1,121.

-Number of sales rose 5% to 189 units, from 180 units in the same period last year.

-Listing inventory declined 15.6% to 469 units from 556 units in the prior year quarter.  

-Lofts accounted for 7.9% of all apartment sales this quarter.

About Prudential Douglas Elliman Real Estate

Prudential Douglas Elliman Real Estate is New York‘s largest residential brokerage, with over 60 offices in New York City, Long Island, the Hamptons and Westchester/Putnam, more than 3,800 real estate agents and a network of national and international affiliates. Prudential Douglas Elliman ranked in the top four of all real estate companies in the nation in 2007, 2008, 2009, and 2010. The company also controls a portfolio of real estate services, including Manhattan‘s largest residential property manager, Douglas Elliman Property Management, as well as PDE Title and DE Capital Mortgage. For more information on Prudential Douglas Elliman as well as expert commentary on emerging trends in the real estate industry, visit the Prudential Douglas Elliman site at www.elliman.com.

About Miller Samuel

Miller Samuel is an appraisal and consulting services firm covering the New York City metropolitan area. Miller Samuel provided property valuations of more than $5,000,000,000 in the past year. The company’s clients include domestic and international financial institutions, law firms, consulting firms, developers, employee relocation companies, co-op and condo boards, managing agents, individuals and government agencies. The firm has authored this report series since 1994. For more information visit www.millersamuel.com.

SOURCE Rubenstein Associates

Back to top

RELATED LINKS
http://www.millersamuel.com
http://www.elliman.com

Manhattan apartment sales, prices drop in first quarter of 2011 after 6 quarters of increases

BY Phyllis Furman
DAILY NEWS BUSINESS WRITER

Friday, April 1st 2011, 4:00 AM

Sabo/News

The average price of a Manhattan apartment dropped to $1.36 million, a 5% decline from the previous quarter.

Related News

• NYC housing prices jumped 10% in 2010
• Santa came to town: Manhattan sees luxury residential market mini-boom over the holidays
• Long Island City makes bid for New York’s next hot spot
• $oHo joins list of top 10 richest zip codes in U.S.
• Buyers are returning the New York
• Real estate’s on a roll! Experts dish on why housing is a hot market again

After making some slow improvements last year, Manhattan‘s apartment market sputtered at the beginning of 2011.

As buyers sat on the fence, sales volume dropped and prices fell during the first three months of this year, according to real estate reports to be released Friday.

The average price of a Manhattan apartment dropped to $1.36 million, a 5% decline from the previous quarter and even worse when compared with last year, according to brokerage firm Brown Harris Stevens.

It was the borough’s first quarter of declining prices after six consecutive quarters of price increases, the brokerage firm said.

“After a year and a half of steady growth, the recovery stalled in the first quarter,” said Gregory Heym, Brown Harris Stevens’ chief economist.

Even so, the real estate picture in Manhattan is much brighter than the nation’s, which has seen a steady decline in housing prices.

The New York City economy “has recovered faster and our housing market has been recovering for over a year and half leading into this quarter,” said Heym. “That puts us in a much better position.”

Unlike other parts of the country, Manhattan has not been hit by the foreclosure crisis, he added.

The number of apartment sales in Manhattan in the first three months of the year fell sharply, dropping 23% compared with the same quarter a year ago, Brown Harris Stevens reported.

Another report, from research firm StreetEasy.com, showed deals fell 27% from last year.

A key reason is many homeowners, especially wealthier New Yorkers, rushed to sell last year before the Bush-era tax cuts were set to expire at the end of 2010. That accelerated sales that would have spilled over to this year.

Sofia Song, StreetEasy.com’s vice president of research, said deals fell at the beginning of 2011 because buyers saw prices drop and had no sense of urgency to make a move.

“Consumers are either taking a wait-and-see attitude or they can not get financing,” Song said. “There is no compelling reason to act now.”

With unemployment still high, she does not see prices going up in the near future.

“We will be bouncing along the bottom for a while,” Song said.

Jonathan Miller, president of appraisal firm Miller Samuel, which compiles reports for brokerage firm Prudential Douglas Elliman, attributed the decline in apartment prices to the fact that co-op sales outpaced condo sales in the quarter. Co-ops are generally less expensive than condos.

“There was a shift in the mix to lower-priced properties,” Miller said.

There was some good news for sellers on the upper East Side. The price of two-bedroom co-ops rose nicely, jumping 16% compared with the fourth quarter of 2010, to $1.6 million, according to Brown Harris Stevens.

The East Side was the only market where prices rose over last year for both prewar and postwar co-ops and condos.

pfurman@nydailynews.com

Manhattan apartment prices dropped in the first quarter. Photographer: Andrew Harrer/Bloomberg

Manhattan apartment prices dropped in the first quarter as condominium sales plummeted and new- development deals made up the smallest share of the market in almost seven years.

The median price of all properties that changed hands in the quarter fell 9.9 percent from a year earlier to $782,071, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. Total sales were little changed at 2,394 as demand for co-operative apartments offset the plunge in purchases of condos, which tend to be more expensive, said Miller Samuel President Jonathan Miller.

“The co-op and condo market seemed to be polar opposites this quarter,” he said in an interview. “The disparity between the two forms of ownership is probably temporary, but clearly was a primary cause of the overall decline in price indicators compared to last year.”

Overall sales held steady as New York City’s jobless rate stayed at 8.9 percent in February, unchanged from the prior month and a percentage point lower than a year earlier. The city’s private job count rose by 11,100 in February, as employment in the financial industry increased, according to the state Labor Department.

New Developments

The shift in apartment demand sent condo transactions down 24 percent in the first quarter from a year earlier to 964, according to Miller Samuel and Prudential. Sales of co-ops climbed 29 percent to 1,430. New developments, which are primarily comprised of condos, accounted for 14.5 percent of the sales market, the lowest since the third quarter of 2004.

Residents in co-ops buy shares in a corporation that owns the building, rather than having a deed to the property itself. Co-ops tend to be in older buildings and often are lower priced because they are smaller-sized on average, and their boards maintain more restrictive rules on who may purchase and how those deals may be financed, Miller said.

“I’m not so sure it’s suggesting a change in buyer sentiment, it’s just what happened,” he said. “I would characterize this housing market as relatively stable but fragile.”

Noah Rosenblatt, founder of UrbanDigs.com, a real estate analytics and consulting company in New York, said the decline in condo sales was because of a lack of properties on the market rather than falling demand.

“There’s just not as much condo supply as there was a year ago,” Rosenblatt said. “If condo supply is down, of course you’re going to see fewer condo sales. The pace of sales is relative to the pace of supply.”

127 Days

The inventory of condos listed for sale fell 15 percent in the quarter, according to Miller Samuel, while co-op supply increased 5 percent. Apartments on average stayed on the market for 127 days, four days longer than a year earlier.

The absorption rate, or the length of time it would take to sell all the inventory at the current pace of sales, was 9.5 months, down from 10.1 months in the year-earlier quarter.

“There’s more security for people with their jobs, overall finances,’ said Pamela Liebman, chief executive officer of the Corcoran Group brokerage. “A majority of people do not believe that prices are going to go down any further. You’re just seeing more people spending money again.”

Different Reports

Five reports issued today showed declines in closing prices in Manhattan. Brown Harris Stevens and its sister firm, Halstead Property LLC, reported a median price of $787,500 for apartments that sold in the quarter, a 4 percent decrease from a year earlier.

The Corcoran Group said the median price fell 2 percent from a year earlier to $800,000. StreetEasy.com, a service that compiles broker listings, put the median drop at 7.8 percent.

The reports from Brown Harris, Halstead and StreetEasy showed a drop in sales in the quarter as buyers were no longer motivated by incentives such as the federal tax credit that expired in 2010. Wall Street cash bonuses, which are also linked to housing purchases, fell 8 percent last year from 2009, New York State Comptroller Thomas DiNapoli said last month.

“Buyers don’t have that sense of urgency to purchase,” said Sofia Song, vice president of research for StreetEasy.com “Wall Street bonuses weren’t that great this year. And mortgage rates, they’re pretty stably low so there wasn’t any urgency for buyers. They’re taking a wait and see attitude.”

Price Reductions

Listing discounts, which measure the amount of money sellers subtracted from their last asking price to strike a deal, fell to 4.5 percent in the first quarter from 5.3 percent a year earlier, according to Miller Samuel and Prudential. About 60 percent of all price cuts in the period were for co-operative apartments, whose prices were reduced on average by 6.2 percent, the StreetEasy report showed.

Two-bedroom apartments comprised 38 percent of properties that sold in the quarter, according to Miller. One-bedrooms accounted for 36 percent of sales. Three and four bedrooms had a 13 percent share, as did studios.

The median sales price of luxury apartments, defined as the top 10 percent by price, fell 14 percent to $3.95 million, even as the number of sales climbed 1.7 percent to 239 deals, according to Miller Samuel and Prudential.

“Buyers are buying when they perceive good value,” said Hall Willkie, president of brokerage Brown Harris Stevens. “There’s been a cultural change. The idea that it doesn’t matter what they pay because it’s going to be worth more tomorrow, people don’t feel that.”

To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net.

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net