At the dawn of 2000, when the idea that the average sales price for a Manhattan apartment could top $1 million was but a glimmer in the eyes of brokers, it took 118 days, on average, to unload a condo.
According to appraisal firm Miller Samuel, which prepares a quarterly market report for brokerage Prudential Douglas Elliman, by the start of 2007 the average number of days it took to sell a condo shot up more than 60 percent from barely two years earlier. It now takes 162 days—or nearly half a year—from the last listing price to the signed sales contract.
The change is recent and dramatic. For the first six years of the decade, that average would rise and fall by a couple of weeks here and there, drifting downward to 94 days in the first quarter of 2004, and as high as 153 in the first quarter of 2001. Squarely in the midst of the ballyhooed boom, in mid-2005, it stayed at around 100 days—about three months—low enough long enough to spangle market small talk with the immortal phrase “seller’s market.” (No one’s saying that now, eh?)
It’s a wonder Manhattan hasn’t collapsed beneath the nail shards nibbled off by nervous condo sellers and their brokers.
A client of Lew Goodman, a senior vice president at Bellmarc Realty, sweated out eight months on the sales market last year with a three-bedroom condo at 340 East 64th Street. Mr. Goodman said it eventually sold for $2 million, $25,000 above its asking price and $600,000 more than the seller bought it for a year and a half prior.
Still, that waiting ….
“I’ve had luck with condos,” Mr. Goodman said, “but a lot of them were when the market was really soaring. I had two [in 2005] sell after just one open house, and they both went for above asking price.”
The longer wait time hasn’t brought prices down: Manhattan condos still go for an average of well over $1 million, a reality reached in 2000. In the final quarter of last year, the average condo sales price was $1,486,057, according to Miller Samuel, a slight drop from the quarter before, but up 7.5 percent from the same quarter in 2005. Both the average condo price per foot and the median sales price were also up over 2005 in the fourth quarter of 2006.
So, what gives? Wouldn’t longer times on the market force price reductions—a little buyer bait, maybe, in a time of pessimism about the housing market? Not necessarily.
Co-ops, for one, dwarf condos in Manhattan, with more than two-thirds of the borough’s for-sale housing in the form of the former; and a sizable chunk of the latter has been built in just the last few years. The State Attorney General’s office, which must O.K. condo-developer offering plans, approved more than 9,000 Manhattan condo units for construction in 2005 alone, according to an analysis by trade magazine The Real Deal.
And co-ops have been selling quicker than condos as of late. At the start of 2004, the average, according to Miller Samuel, was 100 days; by the end of 2006, three years later, it was 141—a 41 percent increase, and one that puts the average below that of condos.
Second, condos are generally more expensive than co-ops. By every sales-price measure in the fourth quarter of 2006, co-ops were cheaper than condos (cheaper being a distinctly relative word in New York real-estate parlance). The price per foot for a condo, for instance, was $1,184; for a co-op, $872.
Third, condos are selling.
The number of Manhattan condo sales jumped 36.1 percent from the fourth quarter of 2005 to the fourth of 2006, though; at 988 sales in the fourth quarter, the number was down from the three 2006 quarters before it.
The likely reason, then, for the lengthening of average times on the market isn’t a collapse—nor a pending collapse—in the Manhattan condo market, of the sort embroiling Las Vegas and Miami, but one much easier to explain: The Manhattan market’s normal now (or more normal than it was in the boom of 2005), and condos have never been that big a part of it.
Most Manhattan buyers—all 10,000 of them annually, give or take—go for more plentiful co-ops, despite the often-invasive board-screening process. As with Mr. Goodman’s seller, success in condo sales can come from simple tweaks in pricing and in marketing; he convinced the seller to turn the open listing into an exclusive with him as broker, and off the market it went.
Come 2007, such changes may stem the upward trend of days on the market, one steadily rising. At the start of last year, the average time on the market was 144 days; by July, it was 149, on its way to 162.
Good luck out there.