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Residential Brokers Hang Onto Hope
Despite early winter doldrums and concerns about smaller bonus payouts, brokers are hoping that things will look up in January.
Michael Signet, director of sales at Bond New York, said his company expects January to be “a huge month.” He added, “Interest rates are coming down, and with an estimated $38 billion in Wall Street bonus money about to hit, the sky is the limit.”
Neil Binder, principal and co-founder of Bellmarc Realty, expressed a similarly optimistic viewpoint.
“I expect to see a reasonably good market for January,” Binder said. “Wall Street bonuses are still kicking in, though not at the same level as last year for most firms. However, Wall Streeters are savvy buyers, and they know now is a good time to look.”
The winter chill, however, was evident in the market in November, the last month for which data was available at press time.
The number of Manhattan home sales dropped dramatically in November from October, according to data from Gregory Heym, senior vice president of research at Terra Holdings, parent company of Brown Harris Stevens and Halstead.
Co-op, condo and cond-op unit sales plummeted 31 percent in November to 720 sales from 1,048 a month earlier. November sales saw an even more sizable 36 percent drop year-over-year from 1,119.
“The uncertainty in the financial markets and the economy in general are having some impact on buyers right now,” Heym said.
Nikki Field, a senior vice president at Sotheby’s International Realty, said the decrease in November was nothing to worry about.
“We are back to our historical trend of a classic holiday hiatus. Keep posted for January 2008. Buyers will be back,” Field said.
While overall sales are slower, the increasing percentage of new development sales is still helping to drive up prices. The median Manhattan sales price stood at $836,250 from $800,000 in October and $760,000 in November 2006, Heym said his research showed.
“Prices are continuing to rise because of the overall strength of the market, and the influence of the high-end, particularly condos,” Heym noted. “The sharp rise in new development sales is helping bring up the median price in most markets, but most noticeably Downtown.”
November statistics regarding the number of homes on the market were fairly consistent with years past.
Inventory shrunk in November from a month earlier. The number of available Manhattan co-op, condo and townhouse units for sale decreased 0.8 percent to 5,677 from 5,721, according to appraiser Jonathan Miller, executive vice president and director of research for Radar Logic. Comparatively, inventory increased between September and October.
For the last six out of seven years, inventory has surged between September and October and dipped between October and November, Miller said.
The rental market is also showing signs of softening. In November, the Manhattan vacancy rate continued to climb for at least the fifth straight month to 1.21 percent from 1.13 a month earlier, Citi Habitats data indicate.
The average asking rent in Citi Habitats rental transactions dipped 1.4 percent to $3,214 in November from $3,261 in October.
The Real Estate Group found that while citywide asking rents decreased less than 1 percent between mid-November and mid-December, the Financial District saw a much greater percentage drop – and the greatest drop in Manhattan – at 5 percent.
“Numbers like this imply that landlords are trying to quickly reduce rents to bridge the gap between the large number of FiDi [Financial District] vacancies and the smaller demand of those seeking them out,” said Daniel Baum, COO of the Real Estate Group.
Great expectations for the New Year: Survey finds brokers optimistic about ‘bouncy’ market
To assess the state of the Manhattan residential market, The Real Deal sent out a survey to real estate professionals last month. Here is what some of them had to say:
Neil Binder principal and co-founder, Bellmarc Realty
“The market is bouncy. There are components that are active and others that are not. Buyers are demanding price concessions and sellers are resistant because there is still a low level of inventory.”
Eddie Shapiro president and CEO, Nest Seekers International
“We expect a strong beginning of the year. Every January is a strong time.”
Gary Malin COO, Citi Habitats
“We have seen some properties being purposely priced slightly below market to generate activity and some of those listings have led to bidding wars -- some over $100,000 from the asking price. We are still seeing strong activity in the entry-level apartments. However, oversized studio and one-beds are taking longer to move.”
Kelly Mack president, Corcoran Sunshine Marketing Group
“In new development, one of the most interesting trends right now is the unprecedented demand for larger apartments and large-scale combinations. We have buyers looking to create 4,000-, 6,000-, even 11,000-square- foot residences in buildings all over the city.”
Nikki Field senior vice president, Sotheby’s International Realty
“We are traveling to international financial centers [including London, Hong Kong and Dubai] and meeting with potential Manhattan buyers on their turf, not waiting for them to come to us.”
Valerie Dominguez vice president, the Corcoran Group
“The demand is especially strong for condos under $500,000 since that is a very underserved segment of the market by developers, which happens to coincide with a very large percentage of the population.”
Michael Signet director of sales, Bond New York
“Perhaps surprisingly, despite all the negative press, we are having a busy December. Buyers are certainly a bit more tentative than we have seen in the past but transactions are taking place and prices have remained strong.”