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From the February issue: The fourth-quarter market reports revealed that the recession’s worst-hit Manhattan neighborhood isn’t newly gentrifying Harlem or even the recently residential Financial District. Midtown — one of the city’s most well-established neighborhoods — saw the sharpest price decreases, the most price cuts and the longest days on the market. What happened? Experts say Midtown West, in particular, fell prey to a hotbed of speculation during the boom, fueled by an abundance of new condos, and the area is now paying the price. During the mid-aughts, thousands of new condo units were built in Midtown and quickly snatched up by investors eager to flip them for six-figure profits in the wildly escalating market of the time. Now, while overall market activity is on the rise again, falling prices have dampened demand from investors, leaving Midtown with an oversupply of condos — and absentee owners frantically trying to unload them. Around 42nd Street, “there are large, monolithic new development buildings, with a lot of investors and pied-à-terre buyers who are now desperate to sell,” explained Sofia Song, vice president of research at StreetEasy. [more]

From the February issue:
Thirty years ago, the notion that the largely industrial area at the foot of the Manhattan and Brooklyn bridges would one day command some of the highest prices in Brooklyn real estate might have seemed about as plausible as an elephant taking wing. Nowadays, of course, Dumbo is well established as one of Brooklyn’s most sought-after neighborhoods. So much so that it has weathered the real estate downturn better than Brooklyn as a whole — a reality that the few developers planning projects in Dumbo hope continues. In December, the publicly traded luxury home builder Toll Brothers closed on a parcel of land at 205 Water Street where the firm intends to develop a condo with approximately 70 units. Toll paid $8.6 million for the land and hopes to start building by the end of the year. “Dumbo is fairly unique within the Brooklyn market,” said David Von Spreckelsen, a senior vice president with Toll Brothers. “It’s really been holding value better than the other neighborhoods in Brooklyn, and if you look at [condo] resales they’re at really strong numbers.”  [more]

In the fourth quarter of 2009, there were fewer price cuts, more price increases than before, a decrease in inventory and a jump in contracts from a year earlier, according to a fourth-quarter market report released today by Streeteasy.com. Though Manhattan hasn’t quite recovered from the Lehman Brothers collapse, “there’s a growing sense of buyer confidence and seller optimism,” said Sofia Song (formerly Sofia Kim), vice president of research at Streeteasy and the author of the report. In the fourth quarter, 3,810, or 27.4 percent, of Manhattan listings on Streeteasy.com saw their prices drop at least once, according to the Web site, which specializes in real estate data. That’s 29 percent fewer price cuts than in the third quarter, and 14.4 percent fewer than in the fourth quarter of 2008. “We saw fewer price cuts, and those price cuts were not as deep,” Song said. Condos saw an average price cut of 7.8 percent, down from 8.4 percent in the third quarter, the report says, while the average price cut for co-ops was 7.7 percent, compared to 8.1 percent in the previous quarter. Moreover, there were actually some price increases in the fourth quarter, though they were still rare, Song said. [more]

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An uptick in sales activity has slowed the once-rapid decline in the Manhattan real estate market, according to fourth-quarter 2009 market reports released by the city’s major brokerages today (see reports after the jump), though experts still fear a double-dip in prices. Sales activity jumped and inventory shrank in the fourth quarter, the reports show, though prices were still far below 2008 levels. Experts attributed the positive signs to low interest rates, pent-up demand from a slow winter, and falling prices. “This surge in activity and sharp drop in inventory has stopped prices from essentially hemorrhaging,” said appraiser Jonathan Miller, president and CEO of Miller Samuel and the preparer of Prudential Douglas Elliman’s fourth-quarter report. “We’re looking at a much more modest decline.”  More

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