4Q Manhattan Housing Reports: Where’s That Cliff Already?

Three major Manhattan housing market reports for the fourth quarter of 2008 were released on Monday, the first ones that can at least somewhat gauge the impact of the financial crisis. (All involve deals closed in the final three months of last year, but perhaps negotiated many months prior.)

The reports suggest a market definitely impacted by the national recession; but also one that, while down from the points of view of sellers and developers, isn’t yet at the cats-and-dogs-living-together phase of pricing and sales freefall. The average Manhattan apartment, for one thing, according to the reports, still costs from $1,449,621 to $1,649,000.

Herewith, in no particular order:


Prudential Douglas Elliman and Miller Samuel

Vital stats

Average apartment sales price: $1,485,102

Median sales price: $900,000

Average sales price per square foot: $1,183

The Take-Away Report author Jonathan Miller, president of CEO of Miller Samuel, in an emailed analysis:

There was a decline in price levels and the number of sales of re-sale apartments. Due to a surge in new-development closing activity in the current quarter and a lull in activity in the prior year quarter, the number of new-development closings and price levels rose over the period; however, these sales reflect the market 12 to 18 months ago.

In contrast to the more modest trends of closed sales, contract activity in the current quarter was marked by a sharp decline in sales activity and price levels. A periodic sampling of sales contracts showed a decline of 35% to 75% compared to the same period last year. Current contract price levels show an average decline of 20% from August 2008.


Brown Harris Stevens and Halstead Property

Vital stats

Average co-op sales price: $1,103,952

Average condo sales price: $1,713,124

Average sales price per square foot for townhouses: $1,550

The Take-Away Report author Gregory Heym, chief economist for Terra Holdings, the brokerages’ parent company, in the report’s intro:

Closing prices for Manhattan apartments averaged $1,449,621 during the fourth quarter, up slightly from a year ago but down 2% from the third quarter. While closings at 15 Central Park West and The Plaza had inflated prices over the past few quarters, this was not the case during the fourth quarter. Removing these two buildings brings the average price down just $24,230 to $1,425,391, which would be up 2% from the comparable third quarter figure and the second highest figure on record. …

New developments continued to account for a higher percentage of closings during the fourth quarter. Comprising 42% of all sales, and 72% of condominium sales, they sold for an average price of $1,717,115, 3% higher than the prior quarter. As we have pointed out in previous reports, these deals are typically negotiated far in advance of when they close. On average, new developments that closed during the fourth quarter had their contract signed on Nov. 16, 2007.


The Corcoran Group and PropertyShark

Vital stats

Average sales price for existing apartments: $1,275,000

Median sales price for existing apartments: $759,000

Average price per square foot for existing apartments: $1,073

The Take-Away Corcoran CEO Pam Liebman in the report’s intro:

The Fourth Quarter is usually not the busiest one for property closings, since its resale contracts are signed in the always-slow Third Quarter (when people are off for summer vacation or starting the new school year they don’t think much about moving house). But with so few transactions in the pipeline, downward pressure on prices will continue until a sense of urgency is restored for buyers.

For this reason, it is important to consider new developments in the proper context, because most of their contracts were signed in 2006 and 2007 before the current economic slowdown was upon the market in such force. Prices of new development properties were strongly higher as several signicant buildings – such as 995 Fifth Avenue and 170 East End Avenue – reached the finish line this quarter after several years of work.

4Q Manhattan Housing Reports: Where’s That Cliff Already?