The Real Deal New York

Election creates uncertainty in apt. market

October 16, 2007
By Will Swarts

After a weak September apartment market in which potential buyers and sellers were distracted by the Republican convention and the later-than-usual Jewish holidays, October marked a return to somewhat more normal conditions.

Uncertainty created by the presidential election appeared to give the market some pause, however, even though the lower-end showed strength as a result of low interest rates.

Overall, weekly purchase application numbers from mid-October were stable, said Jonathan Miller, president of the appraisal firm Miller Samuel and author of the Douglas Elliman Manhattan Market Overview. Interest rates at a six-month low help drive purchases.

Lauren Cangiano, senior vice president at Halstead Property, said the market was active, “but if I had to compare this October to last October, this one is a little slower.”

The proportion of deals done at the lower-end of the market has been increasing and there has been a marked increase in inventory in this segment as well, she said.

In the third quarter, studio and one-bedroom units made up 54 percent of all the apartments sold, a rise from 49 percent the quarter before, according to Miller’s statistics.

“We are definitely seeing a slight inventory increase,” said David Michonski, chairman of Coldwell Banker Hunt Kennedy. “We think that its things being on the market longer.”

“There have been many more open houses over the last several weeks,” Cangiano agreed. “We’re seeing more inventory in the lower-end a million and under.”

Elaine Clayman, a vice president and director at Brown Harris Stevens, had a different take, saying she was seeing multiple bids and getting “aggressive” prices for her listings.

“I was a little bit nervous in the summer,” she said. “But perhaps that was just a seasonal slowdown. I thought maybe people would hold off buying until after the election, but that’s not what’s happening. They’re out there buying like crazy.”

Earlier, September sales activity declined 18 percent from the previous month, which was already showing signs of a significant slowdown.

Regardless of their political sympathies, brokers can blame the Republican Party for the dip that month, said Jeffrey Jackson, chief economist for appraisal company Miller, Maxwell & Jackson.

“Sales activity disappeared the week of the Republican convention, dropping to the lowest weekly level in over two years,” he said. “Even though low mortgage rates have kept the market hot, owners, buyers and brokers all took time off.”

The appraiser also said the Labor Day holiday and Jewish holidays played a role in the slowdown of the week ending Sept. 4, when sales dropped 34 percent in Manhattan while national sales rose by 12 percent.

The contracts that were signed during that period were most likely for or above the asking price. The Douglas Elliman report for the third quarter said the average price climbed to $1,069,445, a 2.1 percent rise from the preceding quarter.

However, the median sales price dropped to 655,000, a 2.8 percent decline from the preceding quarterly record of $674,000, which Miller attributed to the rise in smaller apartment sales.


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