1st Quarter Market Manhattan Listings - 1st Quarter Market Report Review
Manhattan Listings The 4th Quarter of 2008 saw drastic impacts on the US economy and specifically Manhattan real estate. The 1st Quarter Market Report reveals how the events have created a new landscape and "reset" of apartment prices in Manhattan. A number of highlights from Prudential Douglas Elliman's 1st Quarter Market Overview:
- The Manhattan Listings tipping point which occurred last September was largely triggered by the bankruptcy of Lehman Brothers and federal bailouts of AIG, Fannie Mae and Freddie Mac. This marked a sharp contraction of credit, greatly restricting demand as participants had more difficulty obtaining financing. A national recession, rising unemployment and reduced compensation in the financial services sector also played a role in restricting demand.
"There is no denying that a sudden and far reaching impact occurred to the Manhattan real estate market as almost overnight the shift occurred."
- The market reset caused sellers to be more than a year behind the current market, still setting list prices in relation to the last high mark in their respective buildings.
"Sellers who have bought in the last two to three years have been attached to higher Manhattan listing prices because they typically have less equity to work with to sell the property without taking any loss."
- The result is an expansion of Manhattan Listings inventory, listing discount and days on market metrics. However, by the end of the first quarter there was a noticeable up tick in contract activity and attendance at open houses.
"We see a lot of interest in our well priced studio and one bedroom Manhattan listings. First time buyers who have just recently been priced back into the market now see the potential opportunity to buy for the first time as interest rates are low and pricing is becoming more and more favorable.
Market Metrics that we like to follow:
- The number of sales declined 47.6% to 1,195 units from 2,282 units in the prior year quarter and down the same amount from the prior quarter.
- Listing inventory increased to 10,445 units, a 34.3% increase from the 1st Quarter of 2008.
- Average days on market increased to 170 a 16.5% increase from the 1st Quarter of 2008 and a 7.1% increase from the 4th Quarter of 2008.
- Manhattan Listings Discount(from Last List Price) was 12.4%
"The listing Discount from Last List Price is one the market metrics that I give special consideration. I refer to this number as the Negotiability of the unit. Now keep in mind that this number takes into account all types of property(condo, co-op, townhouse) and all price points. Naturally the high end market has been affected far more drastically than the sub-million market. The listing discount shows that there is still considerable disconnect between what buyers are willing to pay for a property and what sellers think their apartment is worth. The average listing discount has been approximately 2% over the past ten years. "
- As Manhattan listings inventory rises, the spread between list price and sales price tends to expand as sellers fall behind the declining market when setting their list prices, especially when there is rapid change in market conditions.
Manhattan Listings: Re-Sale versus New Development: It's very important to distinguish pricing trends for re-sale and new developments.
- The median sales price of a Manhattan re-sale property- defined as any property not sold in a newly constructed or converted development fell 20.8% to $675,000 from $852,500 in the same period last year.
- The median sales price of a new development increased 31.4%. The price negotiated in a new development sale transaction was likely reached 12-18 months ago.
What Does this All Mean for Manhattan Listings?
Buyers- If you are looking for Manhattan listings, we encourage you to first become educated, and speak to a mortgage broker or local bank regarding financing. If you are first time home buyer, please read our first time buyer series outlining the process of buying in Manhattan. One of the questions we hear most is, when is the market going to bottom? We can't tell you, we won't know until we are back on the way up again. What we can say is that we will need to see listing inventory level off, the listing discount come down to historical levels, and the average days on market for Manhattan listings to decrease. There are also a number of macro-economic factors including price vs. rent, affordability indexes to come back in line to the current market conditions.
Sellers- Two most important questions we ask: Why are you selling and when did you buy? You have to have a very important reason to sell in this market. We are seeing some apartments trade for prices that we have not seen since 2005.
Ultimately, what's your motivation? Do you really need to sell or would it be nice to sell if you could get a certain price? In order to have a successful sale being market educated and to understand what it will take to actually sell will be the keys to your success.
We are Real Estate agents under one of the most successful Manhattan Brokerage firm Prudential Douglas Elliman with extensive Manhattan Condo and Co-Op market knowledge. In addition, we have the confidence and success in selling all of our exclusive properties.
If you are a Manhattan Condo owner that is unsure how to price your condo properly, call us today at (917)837-8869 or email us at Ehsu(at sign)elliman.com for a confidential conversation. We will be able to discuss your specific needs, open and clear solution to help you achieve your Real Estate goals.
*Manhattan Listings - was first published on www.Manhattan-Condo-Living.com*
Morgan Evans is a Manhattan New York Real Estate specialist in neighborhoods such as: Greenwich Village, Soho, Union Square, Upper East Side, Upper West Side, Chelsea, Midtown West, Midtown East, Nolita, Lower East side, Financial District in Manhattan. Morgan specialize in working with international buyer, high net worth buyers, parents buying for children and investors buyers. Contact him today by calling (917)837-8869.