Friday, March 13, 2009
A snapshot of today's Manhattan residential market
download the market snapshot (212 kb pdf) »
Last week I wrote, "Values have dropped, and there is a lot of wild speculation at this point about how far" in Making the best of the Manhattan real estate market. Buyers are cautious of paying too much, and sellers know that their values have gone down, but don't know by how much. The uncertainty has contributed to the slow pace of sales. This week The Corcoran Group issued an update to last quarter's data with a 'Market Snapshot' based on Corcoran's contract signed data in Manhattan, from January and February of 2009. It helps to give us some insight on what is actually happening in the market at the moment. The snapshot confirms that it is a good time to be a buyer in Manhattan; and that when pricing hits a certain perception of value, deals will get done. The report is available for download, and I've pulled the three charts here from it, along with some key takeaways.
- Manhattan apartment inventory is now approaching 12,000 units on market, its highest since 2Q 2007; plus there is additional inventory which is being held back by developers and not listed as 'on the market'.
- Deals this year are heavily skewed toward smaller studio and one bedroom apartments; indicating that the renters, unencumbered by the task of selling, are among the first to take advantage of this buying opportunity.
- Smaller apartment sales skewed the median price of all properties (co-op and condo) downward 27% to $749,000 from $1.031 million in February 2008
- Price per square foot (PPSF) declined by 17% to $867 PPSF from its peak of $1,043 PPSF in May 2008.
- Buyers are negotiating below asking prices on 91% of all deals
- 9% of all deals still closed at or above asking, indicating that properly priced apartments still gain attention and offers; however that price is more of a moving target than in recent memory.
- Listings are being reduced an average of almost 10% before moving into negotiations
- Buyers are signing deals almost 10% below the last asking price, after listings hit a price reduction that gains a perception of value.
- The aggregate difference between original listing price and selling price in February was somewhere around -19%; it was about -4% in 2008.
It should be noted that the number of deals today is somewhere about half of what it was a year earlier, and specific neighborhood metrics will be different from averages across the entire Manhattan market. For example my own research, about a week ago, on Soho and Tribeca, showed negotiability on deals between -4% to -16% in February, but on too few transactions to truthfully draw an average. Each property and deal is unique local knowledge and proper guidance is crucial for both buyers and sellers. This report also only consider deals in which our company participated. Next month's Corcoran Report will focus on closed deals complied from a more broad survey of property transaction records, broken down by area; however as a quick snapshot, this gets the pulse of the overall market today.