A caveat is required to prevent misunderstanding. I'm looking at a very broad and general trend, to get a sense here of where the Manhattan real estate market is headed in 2010. It is a bit like looking at the Dow or NASDAQ, each individual stock does not necessarily move in tandem. Every real estate deal is different too. It does not mean that you should look for a 5% to 7% discount off an asking price. It could easily be more or less. The averages have little bearing on what I might recommend to a customer bidding on a particular unit. That requires both research, and good instinct, built on a working knowledge of the market. It tends to be when an agent earns their keep.

» Inventory and negotiability (138 kb .pdf)
» January 2010 snapshot (156 kb .pdf)

» download the complete report as a pdf (156 kb) Here is a snapshot of the Manhattan real estate marketplace as 2009 begins, based on Corcoran's "in contract" sales data. We report that, "Marketwide sales activity slowed in January compared to December 2009. However, condominium sales are up 110% and co-op sales are up 118% versus January 2009. As is typical at this time of year, listed available inventory increased slightly this month as sellers relist their apartments in hopes of striking a deal after the holiday season. Available inventory is still far below levels seen a year ago. In January, the pricing disparity between buyers and sellers continued to close. The discounts this month were among the mildest in over a year. Buyers are typically able to obtain larger discounts for more expensive properties."

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» download the complete January snapshot as a pdf (156 kb)
» download the fourth quarter 2009 manhattan market report

Months of speculation, controversy, and debate ended last Friday as the District 2 Community Education Council voted 6-4 for "Option 2" as the temporary public school zoning for lower Mahhattan including: Tribeca, Battery Park City, The Financial District and Seaport area. Downtown Express reported that, "all Tribeca children west of Church St. will be zoned for P.S. 234. Children in east Tribeca and the Seaport will attend the Spruce Street School; the Financial District south of Liberty St. and Battery Park City south of Albany St. will attend P.S./I.S. 276; and north Battery Park City and Gateway Plaza will attend P.S. 89." The Tribeca Trib is running the map shown here as well as great coverage on the issues too. The plan redistributes and creates new school districts for PS 234, PS 89, PS 397 & PS 276. Unzoned PS 150 also serves the general community. Here's what the local media had to say:

The Tribeca Trib: Panel Chooses Zoning 'Option 2' for Downtown Schools

Broadsheet Daily: CB1's School Zoning Task Force endorses Option Two

I heard a story about a coop Board turn down last week, when I went out with a customer to look at some Greenwich Village apartments. We dropped by to see a "Gold Coast" property off Fifth Avenue near Washington Square Park, which had just come back on the market. It was a lovely place, in a converted townhouse, with just five units in the building. As we were about to leave, I asked the listing agent why the apartment had come back on the market. It could be for any number of reasons like the buyer exercising a mortgage contingency, or an inspection problem — both of which seemed unlikely by the condition of the building, and the fact that the co-op required a 50% down-payment, which most banks would see as a low risk, loan to value ratio on lending. It turns out that the prospective buyers were the parents of the person whom would be the occupant/tenant of the apartment. The Board's due diligence process included online research of the tenant. It revealed a 'Facebook' page for the potential occupant which included pictures that raised an eyebrow with some the Board members. While I'm not privy to knowing exactly what the problem was, it seems reasonable that some owners became worried about loud parties and late night noise. It projected a questionable image, and the Coop Board turned down the application.

Fair? Its hard to say. Sometimes a picture is worth a thousand words. Sometimes pictures lie. But the secret to passing a Board's scrutiny is to appear completely uncontroversial. It's a simple lesson, in today's wired world of social networks, potential buyers and their agents, need to review the online presence of the applicants, and edit where needed. As an agent, I go through a very exacting process in preparing financial data and references for Board packages; guiding customers through the coop approval process. That can all be undone today by a few badly considered photos from a New Years party.

click to download report

Has the Manhattan residential real estate market found its footing again? Prices have generally dropped about 15% from the fourth quarter of 2008 when the financial crisis began to apply downward pressure. The uncertainty of the economy in the first half of 2009, has lead to a release of pent up demand in the second half. In December of 2009 signed contracts for condos were up 48%, and co-ops up 157%.

Supply is shrinking and buyer activity, catalyzed by lower prices, is picking up. In Q4 2009 the story was about the available inventory of apartments. It was actually absorbed by 36%, and stands at about the same level as in 2007, at the height of the market (see chart below). That to me is the most striking metric. It is exactly the opposite of what was happening just before the market began to slide, as inventory built, and demand halted due to the financial crisis. Corcoran's entire Manhattan market report is available for download here. It has in-depth metrics on sales activity in the fourth quarter of 2009 and compares them to a year earlier.

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What it means if your a buyer is that the time is now, if you've been sitting on the sidelines. Interest rates are still fairly low for the moment and there are special tax credits available for some buyers. If you are a seller it means that there is a marketplace again for your property, if it is priced well and marketed properly.

When price appreciation will begin is anybody's guess. My opinion is that we've hit a point of price equilibrium now. It is a delicate balance which may be the beginning of a recovery; but it will be difficult for prices to rise significantly without greater employment and a more robust overall economy. I think we will see a market which has some stability, but little if any appreciation in the near term. If you are waiting for market prices to get back up to their peak to sell your home, you will be likely measuring that distance in years.

where are the opportunities?

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For first time buyers, it's a no brainer to buy now while prices are on a dip, mortgage rates low, and tax incentives are out there. If you are looking to sell and buy simultaneously, you're going to find both challenges and real opportunities in this market. It's no surprise to find that one bedroom buyers moving from rental to ownership comprised the biggest segment of buyers in the chart above. People also traded up to larger units, taking advantage of the dip in the market. Downtown Manhattan had stronger demand, on a relative basis, than other parts of the city. Your personal real estate strategy always requires looking at what and when you may have purchased, and what and where you are looking to buy. I help clients navigate those decisions every day. As always, please let me know if you have questions about the Q4 2009 market report.

» download the fourth quarter 2009 manhattan market report

I was surprised to find out that my Christmas postcard from 2004 was being auctioned on ebay, by an outfit named Sensual World, "Purveyors of sensual items from around the world". While I fail to see how exactly I fit in there, I'm somewhat flattered nonetheless. These were both mailed out and distributed on postcard ad racks around downtown Manhattan that year. It was free then, but can be yours today for about three bucks. I've always focused on developing a brand and bringing attention to my practice, and my clients listings, through design. While this is a truly minor recognition of my design work, it gave me a great excuse to recycle this image, and take a moment to wish you all a very happy holiday season!

» download snapshot (544kb) I'm presenting some data published here by Corcoran based on November contracts signed, which leads the sold and closed metrics by 60 to 90 days. This is telling if you are thinking about bringing a home onto the market, or buying one in the first half of 2010. I've met several new customers who will be spending bonus money in the first quarter, but others have been sitting on the sidelines waiting to see what was going to happen before plunking down hard earned, and recently recovered savings. I can feel the momentum to a busy first quarter of the year starting already. It was not unusual to see multiple bids on properly priced homes this December.

In truth, we've seen good activity in the final quarter of 2009. A year ago, amid the uncertainty of the financial crisis, sales activity had slowed to a trickle. This chart shows the number of Manhattan contracts signed market-wide since November of 2007 for some context. Today they are up 193% since January, largely because of improved opportunities for buyers, and consumer sentiment generally feeling better.

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The sales activity has a roughly inverse relationship to the chart below, which shows the supply side. A year ago we began to see peaking inventories of apartments. It has today decreased by 25% since November 2008. While there is some "shadow inventory" of new developments (unlisted/unsold) unaccounted for in these metrics; the pipeline of newly developed units, has virtually been turned off. Developers accepted the new market reality and began improving prices as the year continued.

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november 2009 manhattan condo and coop prices

Condos gained in pricing in November compared to a month earlier, amidst strengthening demand for larger homes. The number of contracts signed was roughly consistent with October and about double a year earlier. Coops sales activity was also up a significant 173% over November 2008. Median sale prices increased 18% over the month prior and 12% year over year. They are selling quicker too. The increased activity is due to pent up demand from people needing to trade up to larger units and improved pricing that brings them in line with demand.

If we continue to see the inventory of available apartments going down, and buyer activity remain as strong, I believe that we will be hitting real price equilibrium soon. On a micro scale I know that I've seen pricing in some larger coop buildings actually increasing already off their lows of the year.

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» download the manhattan november real estate market snapshot (544 kb)
» download the Q3 2009 manhattan market report (3.9 mb)

So for those of you who've been wondering where I've been, let me start by saying I'm back to blogging. I've been managing my time a bit differently recently for both professional and personal reasons, and took a momentary break from blogging this summer. I've actually had a busy time of working, and closed a good number of deals. I made a recommitment to my own health. I guess leaner times call for leaner brokers. I had been about 100 lbs. overweight for a number of years. I said to my doctor a year ago that if I didn't do something about my weight, I felt like I was going to die. With his best Borscht Belt style delivery he told me, "Peter, I have bad news for you. Your gonna die sooner or later anyway". Which actually kinda put it in perspective for me. I decided that my quality of life, longevity, and eight year old daughter, were important enough reasons to make a change. Since the beginning of the year I've now lost 75 lbs and still counting downward.

This has meant putting my life back into balance. That looks like spending much more time exercising, planning my nutrition, and taking the time to sit down and have a proper meal— rather than grabbing a slice while running to an appointment. In this marketplace, the deals take longer and require even more diligence to close too. I remember that when I worked at Newsweek as their Director of Covers, the top editors would always take the time, even when we were on a Friday night publishing deadline, to leave the building and sit down to dinner. The important take away for me being that time management is what we make it. Life will run you, if you don't run it. Focusing on the areas of my life that were demanding my immediate attention was the right thing to do for me, and have lead to new opportunities and accomplishments.

I've added quite a lot to my days. Rather than using a ghost writer, or posting something half-baked, I just went quiet for a little while. It's funny, but when one blogs, there is a kind of self-imposed tension to keep up with it. The real estate market is still here, and I will be continuing to bring you my perspective on it. This week I'm learning how to work my posting back into my routine. I'm feeling great and excited to be back to blogging. I posted the latest report on the Manhattan real estate market (3.9 mb) for download in the left column, and have a commentary forthcoming. Stay tuned.

download a fact sheet

Alexander and Leo Bing were considered NYC's leading property developers at the turn of the 20th Century. They were brothers who built apartment houses in Manhattan in the twenties and thirties, which have since been converted to cooperative ownership.They often collaborated with Roth, who also designed some of Central Park West's iconic buildings including The Beresford, The Eldorado, and The San Remo. In covering the sale of a portfolio of 29 Bing & Bing properties in the 1980's, the New York Times described them: "The Bing & Bing buildings are regarded as among the city's finest prewar properties. The company, a development and management concern founded in 1906, built hotels and apartments at a time when luxurious in New York was still synonymous with spacious." You can see the listing here and download a fact sheet for more Information. Its being shown by appointment daily.

Cobblestoned that is. I noticed as I was walking home from the office today, this scene of Leonard Street undergoing a restoration to its original cobblestone pavers. It is being done as it was originally paved, starting at Hudson Street and moving eastward to West Broadway. These are beautiful finishing touches that help soften the edges of the neighborhood, and a reconnects us visually and tactilely, with its history. It adds value to the experience of everyone who lives here or visits. The work is part of the Harrison, Leonard, Greenwich Streets Reconstruction Project which LowerManhattan.info says, "includes utility upgrades including water and sewer mains, catch basins, and electric, cable, and telecommunications. Curbs, sidewalks (some pigmented), and roadway restoration... Reconstruction of Harrison from Hudson to West Street is slated to start by late 2009." I can tell you from personal driving experience, that stretch of Harrison Street is sorely in need of help, I just hope my shocks hold out until the work is done. The entire project is expected to conclude in spring 2010.