Dottie Herman, president
of Prudential Douglas Elliman
Though pricing indicators were mixed, the volume of Manhattan residential sales increased in the third quarter of 2011, creating an overall picture of stability in Manhattan’s residential market, according to quarterly reports issued today by the city’s largest real estate brokerages.
The market’s bright spots included an uptick in sales at the most expensive end of the market — larger or relatively high-end properties (those at $5 million and above) — as well as an overall decrease in inventory, which buoyed prices, and an influx of foreign buyers investing in condominiums, experts said.
The median sales price hardly budged since last year, dropping a mere 0.3 percent to $911,333, an increase of 7.2 percent over the previous quarter, according to a report from Prudential Douglas Elliman. As The Real Deal reported in the October issue, the number of sales rose 16.7 percent year-over-year and 17.2 percent since last quarter, hitting 3,106, the report says.
Inventory, meanwhile, dipped 4.9 percent in the last year, to 8,123 units, the lowest number in five years, from 7,726 units, according to Dottie Herman, Elliman’s president and CEO.
Altogether, Herman said, the report shows a continuation of the status quo. “Everything is pretty stable,” she said.
Like Elliman, Brown Harris Stevens, which releases the same data as its sister company, Halstead Property, reported 2,492 sales in the third quarter, up 1 percent over last year. The median sale price dropped 4 percent to $850,000 compared to the same period last year, but rose slightly from last quarter’s median price of $835,000.
“Based on the headlines of the last two to three months, we might be expecting something more negative,” said Gregory Heym, chief economist for Terra Holdings, parent company of BHS and Halstead. “But I think we have to remember how our market has been unique compared to the other ones around the country.”
The Corcoran Group was similarly optimistic, reporting that the 3,750 Manhattan sales in the third quarter represented the highest number of transactions since the second quarter of 2008, before the crash. Overall, transaction volume rose 15 percent over the last year and 6 percent compared to the previous quarter, the Corcoran report says.
Some of the growth has come from sales of properties worth $5 million and up, which Heym said helped propel the average sales price to $1.44 million, up 1 percent over last year. Those high-end deals lagged at the start of the year because buyers had rushed to close large transactions by the end of 2010, when the Bush-era tax cuts were set to expire, Heym said.
On the Upper East Side, five sales over $20 million — four more than in the same period last year — contributed to a 29 percent price jump for apartments with three or more bedrooms, the BHS report indicates.
Barak Realty reported that signed sales contracts for properties valued at $5 million and over were up 66.2 percent in the last 12 months before the close of the third quarter, more than 11 times the Manhattan rate overall.
Meanwhile, the pace of sales may have picked up. Properties sat on the market for 119 days in the third quarter, down from 125 days in the third quarter of 2010, the Elliman report says. BHS had slightly less rosy numbers, finding that condos and co-ops were on the market for 111 days in the previous quarter, compared to 130 days in the same period last year.
In the co-op market, the median price dropped 9.3 percent to $705,000 from the same time last year, but sales were down a mere 3 units, the Elliman report says. Corcoran found that the median co-op price held relatively steady, increasing 1 percent year-over-year.
In the more robust condo market, Elliman reported that sales volume was up 33.4 percent over last year, but the median sale price dropped 6.3 percent to $1.05 million and the average sales price decreased 3.8 percent to $1.65 million. Corcoran echoed those numbers, showing a 6 percent drop in the median condo price, down to $1.09 million since last year.
Herman and Jonathan Miller, president and CEO of Miller Samuel and the author of the Elliman report, attributed the activity in the condo market to the presence of foreign buyers, who are taking advantage of the weak U.S. dollar and the relative security of investing in Manhattan real estate.
“The whole world is kind of a mess right now,” Herman said. So “they’re betting on New York.”
Real estate listing site Streeteasy.com reported a 9.9 percent year-over-year increase in closed deals, but found that the number of signed contracts remained virtually unchanged since last year. In the third quarter, 1,937 listings entered into contract, only 2 fewer than the third quarter of 2010, Streeteasy reported.