Here are the latest metrics on contracts signed in January 2011 at the corcoran group. The condo market really started coming back to life in January with price per square foot numbers higher, and larger units selling. Frankly, business has been brisk for right-priced prime Manhattan real estate.
Corcoran just released the Fourth Quarter 2010 Report on the Manhattan Residential Real Estate Market. You can download the complete report here for free. It breaks down the neighborhood trends for coops and condos, with a look at luxury homes, lofts, and townhouses too. In 2010, buyers took advantage of lower interest rates and soft prices, to trade-up into larger units, and move from rental properties to ownership. The residential luxury market (the highest priced 10% of apartment sales) is on the rebound now in most categories, by both sales volume and value. This market is less sensitive to interest rates, and may be reacting more to renewed optimism— a good sign overall. Additionally, in the commercial investment sales market, companies like Massey Knakal are reporting market wide sales "up substantially over 2009 levels". Some of that represents distressed assets being sold off, but it also means that capital is being deployed again, and the market is finding a new normal. More signs that the recovery is well underway.
It's fair to say that 2010 was a bit of a roller coaster too, with very uneven distribution of sales volume; more properties traded in the second half of the year; summertime was slower than in 2009. I think that market demand is basically holding steady, but have often described the marketplace to colleagues as being "fickle" in 2010.Year over year prices trended upward, yet Q4 compared to Q3 of 2010, showed a mixed bag, with downward pressure on prices evident in some categories. The full report shows the details.
That being said, residential home buyers are expecting better value, being choosy, and taking longer to negotiate & close. Sellers who are realistic on pricing and delivering on value, have had good experiences in making deals. That means a good property, priced well, prepared professionally for showing, and with superior marketing to potential buyers. Brokers widely reported over-bidding on properties where these factors come together, bringing offers to a tipping point.
Downtown Manhattan remained very desirable. Neighborhoods like the Village, Soho and Tribeca seemed to muster really consistent demand all year. However, overall the Downtown neighborhoods below 34th Street, decreased slightly in market share from last quarter, and one year ago. Upper East Side sales also decreased in market share, from 24% a year ago, to 21%. In contrast, the West Side and Midtown East increased their market share to 22% and 11%, respectively.
Buyers are taking advantage of lower prices and lower mortgage rates. Trading up to three bedrooms, and moving from rentals into a first purchase, are trends I've noticed— confirmed by the year over year numbers. Studios decreased in market share to 12% from 15% a year ago, while One-bedrooms increased to nearly 40% of the market, up from 36% a year ago. Two-bedrooms decreased slightly from 34% a year ago, while three-bedroom and larger residences increased to 17% of the market, up from 15% a year ago.
Manhattan’s luxury market is defined as the highest priced 10% of all co-op and condo sales. These are some of the most expensive homes in the world, and the return of the luxury market is a sign of confidence and strength in the future. These are buyers who are placing substantial equity into their property purchases. Sales volume was up in the second half of the year. Compared to a year ago, median price increased 8% to $4 million while average price per square foot decreased 5% which is attributable to larger apartments trading. Versus Third Quarter 2010, median price declined 2% while average price per square foot increased 6%, to $1,904. Luxury resale condos increased 18% in median price and 9% in average price per square foot versus a year ago while luxury co-ops increased 22% in median price with no change in average price per square foot.
download: fourth quarter 2010 market report
One of the graphs that I find informative is this one from the Second Quarter 2010 Corcoran Report on the Manhattan Real Estate Market. Downtown Manhattan, comprised of neighborhoods below 34th Street, accumulated the largest percentage of sales this quarter with 35%, a small increase in market share from First Quarter 2010. The West Side accounted for 21% of sales while the East Side accrued 24%. One-bedroom residences accounted for the highest percentage of sales during Second Quarter 2010, with 35%. 
If you've been holding out from selling, you might want to take another look right now. Mortgages hit 50 year lows recently, so conditions haven't been this good to trade in a while.
Downtown Manhattan is the market that's moving first. From the report: "Resale coops increased 7% in median price as average price per square foot increased 5% versus Second Quarter 2009. One and three bedroom co-ops increased by 11% and 18%, respectively, from a year ago. Versus First Quarter 2010, condo median price increased 11% while average price per square foot increased by 4%." Download a copy of the complete second quarter report for the city's complete picture. Feel free to write me with your questions.
The big news is that so far this year, sales volume could be as much as 70% higher than last year by current estimates. I've been personally involved in a couple of bidding wars in recent weeks. Correctly priced and marketed properties are meeting buyers, who are acting now without hesitation. Renewed confidence in the market, and a rapid absorption of the outstanding inventory of apartments, has leveled the market off, and many neighborhoods have started to recover off their lows. In my office, we had 20% of deals that went to contract last month, at or above asking prices. Incredible! I'll be posting more analysis soon, but for an overview of the first quarter of 2010, please download the latest Corcoran Report. I'd be glad to discuss any findings and how they might affect the value of your home.
»Download the report (.pdf)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)
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