Its median price slid 10% to US$810,000 in Q4 from a year earlier, as Manhattan records 10% unemployment
Manhattan apartment prices fell for a third consecutive quarter as Wall Street job losses drained demand and the decline in co-op and condominium values reached 21 percent since the market peak.
The median price slid 10 per cent to US$810,000 in the fourth quarter from a year earlier, New York appraiser Miller Samuel Inc and broker Prudential Douglas Elliman Real Estate said on Tuesday. The median price hit US$1.03 million at the top of the market in 2008. The number of sales jumped 8.4 per cent to 2,473 in the three months ended Dec 31.
Values continued to fall across apartments of all sizes as New York City recorded 10 per cent unemployment in November. Fallout from the recession and credit crisis that cost more than 184,000 finance jobs in the Americas is still hurting New York.
The city lost 25,200 finance jobs in the 12 months ending Nov 30, the state Labor Department said on Dec 17. ‘We have some big macro issues ahead of us,’ said Jonathan Miller, president of Miller Samuel. ‘My view is: We’re not done.’
Five Manhattan property reports published on Tuesday showed price declines for the fourth quarter from a year earlier. The Corcoran Group, a New York-based broker that conducts its survey with the research company PropertyShark.com, said the median apartment price fell 15 per cent. Brown Harris Stevens and Halstead Property LLC put the decline at 11 per cent and StreetEasy.com said it was 10 per cent.
The number of apartments for sale dropped 25 per cent to 6,851, according to Miller Samuel and Prudential. The 10-year average of quarterly inventory for sale is 7,094 units.
‘For most people, interest rates were great and you could buy into the New York City market at a better price than you could have in the last couple of years,’ said Dottie Herman, president of Prudential Douglas Elliman.
Mr Miller called the decline in inventory ‘an anomaly’ brought on by a wave of buyer interest built up during the first half of 2009. More than 6,000 apartments in new developments have yet to be listed for sale, he said.
The biggest price reduction in the past three months was for a 43rd-floor, two-bedroom condominium in the Financial District’s William Beaver House, according to StreetEasy. The price was cut to US$1.66 million from US$3.05 million and the unit sold 10 days later for $1.53 million, according to StreetEasy.
A smaller proportion of Manhattan apartment sellers discounted their listings in the fourth quarter. About 27 per cent of properties for sale carried price cuts, compared with 33 per cent a year ago, according to StreetEasy. Condo sellers cut an average of 7.8 per cent off their asking prices, while co-op sellers whittled an average of 7 per cent from prices in the three months ending Dec 31.
‘If we have not hit a bottom, we have definitely hit a level of resistance here,’ said Bill Staniford, chief executive officer of PropertyShark.com. ‘This is an area where buyers and sellers met and agreed there is value at this level.’
Studio apartments prices fell 11 per cent from a year earlier to a median of US$375,000, Miller Samuel and Prudential said. One-bedrooms dropped 7.6 per cent to US$661,000; two-bedrooms fell 23 per cent to US$1.24 million and three-bedrooms plunged 42 per cent to US$2.35 million.
Apartments with four or more bedrooms fell 38 per cent to a median price of US$5.4 million.
Three of the five most expensive closings of 2009 took place in the fourth quarter, according to StreetEasy. The priciest was a 12th-floor unit at 820 Fifth Ave bought by Ken Griffin, founder of Citadel Investment Group, for US$40 million. He bought the property from philanthropist Lily Safra and closed the deal last month.
Fourth-quarter sales of luxury apartments, defined as the top 10 per cent by price, increased 8.3 per cent from a year earlier to 247, according to Miller Samuel and Prudential. The median sales price fell 8.5 per cent to US$3.78 million.
South of 34th Street, sales at the Superior Ink Condominiums and Townhouses helped boost the average price for apartments with at least three-bedrooms by 39 per cent to US$4.67 million, according to Halstead and Brown Harris, both owned by Terra Holdings LLC.
‘A lot of those units were bought some time ago’, reflecting prices at the peak of the market, said Gregory Heym, chief economist for Terra Holdings.
On the East Side, between 57th and 96th streets, both condo and co-op prices dropped 21 per cent from a year ago, with condos selling for an average of US$1,094 a square foot and co-ops selling for US$806 a square foot, Corcoran said.
The West Side between 57th and 110th streets, the average price per square foot for co-ops fell 11 per cent to US$849, according to Corcoran and PropertyShark. The price of condos for re-sale increased 2 per cent to US$1,394 a foot. Prices of new developments in the neighbourhood plunged 38 per cent to US$1,400 a square foot.
New development sales declined all across Manhattan as lenders hesitated to finance purchases in buildings where less than 70 per cent of the units were sold, Mr Miller said. Sales at newly constructed buildings accounted for 19 per cent of transactions in the fourth quarter, compared with 38 per cent a year earlier, Mr Miller said.
‘Lenders are very wary of new construction because they’re worried about completion,’ he said.
The market reports issued on Tuesday are compiled from public records and brokers’ proprietary data.
Source: Business Times, 7 Jan 2010
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