The number of apartments for sale in the borough fell by double digits in the second quarter of 2012 compared to the same period last year, as sales activity and prices barely budged, according to market reports issued today by the city’s largest residential real estate brokerages.
Overall, inventory of Manhattan co-ops and condominiums dropped 13.5 percent year-over-year, to 6,891 units from 8,070 units, according to Prudential Douglas Elliman. New development listings fell an even steeper 20 percent, to 1,300 units from 1,626 units, while luxury inventory was down 8.2 percent to 1,204 units, the report says.
While a lack of inventory is not new, the dearth of listings was especially pronounced in the most recent quarter, the reports show. Only 5,084 new listings were added, 15 percent fewer than in the previous quarter and in the prior year quarter, according to the Corcoran Group’s report, which noted that available listings were off 35 percent from the peak in the first quarter of 2009.
“Inventory is probably the most significant attribute of the market because it’s continuing to decline,” said Jonathan Miller, president of appraisal firm Miller Samuel and author of Elliman’s report.
Halstead Property and Brown Harris Stevens, which are both owned by Terra Holdings and track the same numbers, reported a 13 percent decline in active listings, while Corcoran showed a decline of 12.5 percent.
At the current rate of sales, it would take just under eight months to sell off the available inventory, compared to just over nine months at this time in 2011, the Elliman report says.
In the second quarter of 2012, there were 2,647 sales of Manhattan condos and co-ops, a 14.5 percent increase over the previous quarter and all but even with the same period a year ago, the Elliman report says.
According to Corcoran, there were 3,650 closings, up 3 percent from the same period last year. Halstead and Brown Harris Stevens reported 2,511 sales, a modest 5 percent year-over-year increase.
Additionally, prices remained largely unchanged. The median sale price dipped 2.5 percent, to $829,000 from $850,000 in the prior year quarter, while the average price was almost $1.41 million, down 3.2 percent, according to Elliman.
Typically, lower inventory and steady sales volume combine to force prices upwards, but in the second quarter, the high volume of less expensive studios and one-bedrooms kept a lid on price increases. For the third straight quarter, entry-level apartments have made up more than half of all apartment sales in Manhattan, Miller said.
“The person who’s an entry-level market person that’s renting sees rents are going off the wall, [and] interest rates are low, so those people are buying,” said Elliman CEO Dottie Herman.
All in all, the stable prices, slight uptick in activity and faster absorption rate are evidence of a healthy, if not particularly exciting, market, said Jim Gricar, Halstead’s general sales manager.
“Those numbers are unchanged, and I think that’s a sign of steadiness and health in the market,” he said.
Still, Miller pegged low inventory as “one of the biggest challenges facing the housing market over the next year.”
An average of 376 new listings came onto the market every week in the second quarter of 2012, about 4.8 percent fewer than during the same period last year, according to a market report from listings aggregator Streeteasy.com. An average of 454 listings were absorbed every week, or 17.5 percent more than during the second quarter last year, the report says.
The drop in inventory is partly the result of a lack of new product, as new construction has lagged behind the strengthening sales market, as well as quick sales of appropriately priced homes, experts said.
In fact, while Elliman found that homes stayed on the market for 21.3 percent longer in the second quarter — 165 days versus 136 days last year — that spike was the result of long-marketed homes finally selling, Miller said.
Additionally, owners may be reluctant to list their homes if they cannot afford to buy a replacement residence, given the tight mortgage lending environment, Miller said.
“New development can’t respond quickly enough, and credit is just as tight on construction loans as it is on end loans for someone getting an individual mortgage,” he said.