Manhattan on clearance: Comparing price cuts by neighborhood
February 28, 2009 11:59PM By Sarah Ryley
Click here for The Real Deal's map of Manhattan's biggest price cuts
No one is actually announcing a borough-wide "fire sale." But with hundreds of listings — for homes ranging from trophy apartments in glittering towers to shoebox-sized studios in prewar walk-ups — with price cuts exceeding 20 percent, one could be excused for thinking there was a giant clearance tag on the island of Manhattan.
Or that there could be one someday, as analysts are now beginning to agree such steep discounts will only become more prevalent as sellers reckon with the stunning recession that has already scorched big cities across the country.
This month, The Real Deal drilled down to examine price cuts in Manhattan neighborhood by neighborhood. The island was divided into 12 districts (see map in A sinking island), customized data was gathered for each on past sales by PropertyShark and on current listings by StreetEasy, and industry players discussed how far listings would need to drop for property to move.
The comparison found that in every neighborhood, current listing prices and recent actual sales differed widely, indicating a deep disconnect between sellers and buyers in the current downward market. Median listing prices would need to drop from 8 percent in Soho and Tribeca to a whopping 42 percent in the West Village and Greenwich Village just to equal the actual median sales price in those neighborhoods during the last quarter of 2008.
"Listing prices, when they're higher above market than they should be, you see a slower pace of sales. That's measuring the buyer's resistance to those prices," said Jonathan Miller, president of real estate appraisal firm Miller Samuel.
Industry executives also said, depending on the neighborhood, the divide could indicate a high number of luxury or large-sized properties sitting on the market (reports have found studios and one-bedrooms have been selling better), and could also be affected by the large number of unsold apartments in newly constructed luxury high-rises.
In comparing the median listing in each neighborhood to last quarter's median sale prices, The Real Deal analysis is not predicting what actual sales prices will be in the coming quarters, but is only noting by how much listing prices are possibly inflated.
Some analysts agree that listings must be cut back even further, to levels seen at the beginning of this decade, for today's glut of housing to move, and finding that prices will see staggering declines.
Goldman Sachs concluded in January that Manhattan condo property values would require a drop of 35 to 44 percent before the market is stabilized. (So far, Miller has noted signed contracts are averaging 20 percent lower than for similar units sold last year.)
Some are welcoming price drops. "For the good of the city you need to get a bottom here, and the sooner that happens, the sooner the city will recover," said Jon Gollinger, co-founder of Accelerated Marketing Partners, which auctions properties in distressed markets across the country.
Gollinger basically agreed with Goldman Sachs' assessment, foreseeing drops up to a devastating 55 percent in fringe neighborhoods, "assuming a tenable solution to the credit problem is forthcoming by year-end." Accelerated has been discussing partnerships with Prudential Douglas Elliman and Miller, who will help determine the starting bid of auction properties, as well as other firms (see Going, going, gone: New York City condos could hit the auction block).
Andrew Gerringer, managing director of Prudential Douglas Elliman's development marketing group, declined to reveal specific developers considering auctions, but said the Financial District is one of the prime areas. "There's a lot of people listening to us with open ears right now," he said.
Lower Manhattan
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In Lower Manhattan, the epicenter of the financial crash, there seems to be a particularly high proportion of troubled buildings. Embarrassing headlines have been written about 20 Pine Street — at least two buyers are suing to back out of contracts, and blog rumors are spreading that 80 unsold units are being marketed at half off — and 25 Broad Street, which shuttered its sales office in the Financial District, as well as Rector Square in Battery Park City, where condo owners allege units are being used for dorms and hotel stays.
Though median prices staggered upward over the past two years, with the fourth quarter of last year its best showing, the median listing price in Lower Manhattan must fall 29 percent to match that quarter, which predates the vilification of Wall Street bonuses.
Miller said the area's large, unsold towers and a transient atmosphere may mean larger price cuts are in order. Experts said the market also depends on a resurgence of Wall Street and interest from foreign investors.
At the opulent Cipriani Club Residences, named after restaurateur and co-creator Giuseppe Cipriani, four apartments are listed below their previous purchase price. "If they want to sell and they don't get offers, they have to do something about it," said Ellen Kourtides, a Corcoran vice president who is marketing one apartment that had a price chop of nearly 28 percent.
The biggest fire-sale award in Lower Manhattan goes to Five Nine John Lofts, where the sponsor is pushing the last unsold apartment, an Andres Escobar-designed penthouse, for $1.6 million, 37 percent less than the original asking price over three years ago. At that discount, Beverly Sonnenborn, a vice president of Sotheby's International Realty, said it's a "good buy."
The area comprising Soho, Tribeca, Little Italy and Nolita is the highest-priced of the 12 districts in Manhattan, with a median listing price of $2.95 million. It also contains a zip code ranked by Forbes as the most "overpriced" in the nation, determined by comparing prices to factors like earnings and rents, which generates the same outsized ratios that Goldman Sachs predicted would mean a bigger price drop to come.
Sofia Kim, vice president of research for StreetEasy, noted, "The recent price gains and increased inventory in this area have been driven by luxury new developments. Current inventory levels are 57 percent higher than they were a year ago today."
Sotheby's Sonnenborn predicted that new developments, of which there are two dozen in this district, are going to see the biggest price cuts. "A lot of the stuff that comes on the market is just sort of ho-hum property. You're one of 50 of those properties that are on the market."
But even truly unique apartments have their troubles. A one-bedroom in the former Beaux Arts police headquarters on Centre Street, with its dramatic domed great room, has been cut 29 percent to $5 million since it first debuted last March. A 6,600-square-foot pad in the former gymnasium of the same building, however, hasn't budged on its price tag of $30 million.
While Miller said the police building is one of his favorites in Lower Manhattan, he said with current market conditions, the gymnasium conversion should be reduced by at least a third.
So far, the current listing with the biggest price cut is a quaint duplex co-op marked down 37.7 percent over the past two years, to $1.495 million. Sonnenborn, who is marketing the property, said the biggest issues have been its lack of a second bathroom, restrictions against using it as a pied-à-terre and the co-op board, which rejected a buyer over some "he said, she said" issue.
West Village/Greenwich Village
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Several brokers pegged the picturesque, heavily landmarked neighborhoods, Greenwich Village and the West Village, as among the more secure in the city. But the area did see a median sales price decline over the past year, and the current median listing price of $1.4 million would need to fall a staggering 42 percent to meet the prices apartments actually sold for in the last quarter.
The Village has always maintained its value better than other areas," said Sonnenborn, adding the shops, foot traffic and tree-lined streets give it a warm, neighborhood feel. "Yes, things went down in price [already], but not as much as the other areas."
Friends of Hudson River Park, an advocacy group for the waterfront park that stretches from Midtown East to Battery Park City, released a study last year showing that home values in Greenwich and West Village have tripled since the park plan was announced in 1990, far exceeding the Manhattan average over the same period. And the area is a favorite among celebrities such as Gisele Bundchen, Heather Mills, Philip Seymour Hoffman and Susan Sarandon.
Artist and filmmaker Julian Schnabel created a lavish condo, the Palazzo Chupi, there near the West Side Highway. Two of the unsold units — a duplex, discounted 35 percent to $19 million, and the penthouse triplex, discounted 31 percent to $22 million — can now be purchased together for $41 million. "The eclectic finishes and design would not appeal to most people," said Kim, adding that the closest comparable sale, a triplex in Richard Meier's Perry Street South Tower a few blocks away, had almost a third the price per square foot. That unit sold in November for $21 million, a $12 million discount from its original listing price.
Lower East Side/East Village
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The district comprising the East Village, Lower East Side, Chinatown and Noho has seen a 17 percent median sales price decline in the past year, to $612,500, yet the median listing price is $875,000, likely because of all the new luxury apartments waiting to be sold.
Kim said there are 40 percent more listings on the market today than a year ago, adding, "It's an area where people would prefer to rent than to own simply because it's cheaper."
The biggest discount is a two-bedroom walk-up on East Houston Street at Eldridge, a noisy intersection at the edge of the Lower East Side. Corcoran broker Timothy Scott said the co-op has been reduced from $650,000 to $412,000 since November because "we based it on the wrong size. And when we discovered what the real size was, it was basically about the time the financial crash started to hit."
Scott said they now have an offer "very close to asking price," but in general, buyers are starting negotiations by offering 20 to 25 percent less.
Core Group Marketing broker Mark Lynch agreed "lowball" offers are common nowadays, even on fire-sale prices. "I'm trying to shift my paradigm [from representing sellers] to renters and buyers," he said. "The pendulum has shifted to the renters' and buyers' side."
He's marketing a one-bedroom condo at Ian Schrager's "ultra-luxe" Noho project 40 Bond, which has been discounted $1 million, or 29 percent, since it came to market in November 2007. Of the developer lowering the price, he said, "There was a willingness, based on just a lack of interest."
Another frustrated broker said the failure of luxury real estate here would be appropriate karma. "Developers pushed out the immigrants and artists who made this a vibrant neighborhood, hoping to replace them with rich people. Maybe now those people who were pushed out can afford to move back."
Murray Hill/Gramercy Park
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The district comprising Murray Hill, Gramercy Park, Midtown South, Kips Bay and Flatiron is one of the few in Manhattan where the current median listing price is not far above the median sales price of last quarter — only 10 percent.
Still, Gollinger, who has been tracking the status of perilous new developments, said, "A sudden release of shadow inventory [unlisted apartments in new residential projects] would significantly alter what is otherwise likely to be an average price correction." For example, Tempo in Gramercy Park has 103 apartments, with only one in contract and just 15 listed on the market, thus distorting the actual inventory.
There are 17 new projects currently being marketed in the district, according to StreetEasy, not including those that have turned rental or have suspended sales. "This area has a very strong rental market," Kim added. "So, if units need to move, prices need to be compelling for people to buy rather than rent."
Some towers have pushed the boundaries of what once had been thought a good location for luxury housing, rising up next to a cluster of hospitals including Bellevue and a methadone clinic. One such building, Gramercy Starck, has sold most of its 207 apartments and recently discounted roughly a dozen remaining ones, including the penthouse for 21 percent off. The nearby Tempo, on the other hand, made the odd choice of raising prices.
Karen Berman, vice president of Argo Residential, is marketing a co-op in a 1960s Flatiron building discounted nearly 40 percent. She said the boards often make it difficult to slash prices, feeling it undercuts the value of their own home. "I've gotten calls from board presidents saying, 'How could you price like this? How could you do this?'" said Berman. "If they don't read the papers, they need to be told what the current pricing is."
Chelsea
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Chelsea has experienced a steady increase in median sales price, from $780,000 in the fourth quarter of 2006 to $1.15 million in the fourth quarter of last year. The median listing price of $1.5 million would need to fall 23 percent to meet last quarter's sales prices.
Gollinger said the 31 new developments being marketed in this small district indicates "price adjustment in Chelsea will likely exceed the city average."
Art galleries, a vibrant nightlife (an issue for some new residents trying to sleep) and the High Line, a park under construction on an abandoned elevated railway, have added value and cachet to the neighborhood.
But Gollinger said negatives, like nearby body shops and public housing, "may change the acceptance of the high-end product being delivered in a struggling economy, particularly if the High Line is delayed." The decreasing pool of high-end buyers now has many towers to choose from; the rest must lower prices to sell.
Advertised as a short sale, Chelsea's biggest discount is a loft-like, three-bedroom condo marked down 37 percent to $1.25 million, less than the $1.875 million the apartment was purchased for three years ago.
Appraiser Miller noted that based on the price per square foot, the property is priced 23 percent below other listings in the building, "which is a reasonable discount for ground-floor space. It's not clear whether any further adjustment in price has to be made until it is tested in the upcoming spring market."
Miller said at least a 30 percent price adjustment is in order for Chelsea's most expensive residential property, the $16.49 million penthouse atop the Yves Chelsea, a name its developer told The Real Deal was inspired by famous Yveses, like Yves Saint Laurent and pop artist Yves Klein.
Midtown West
Significant redevelopment plans for the Hudson Yards and the Javits Center promised an elevating effect on property values in Midtown West, which includes Times Square, Clinton and Hell's Kitchen.
While those plans are tabled, an experiment recently announced by Mayor Bloomberg to make sections of Broadway in Times Square and Herald Square car-free could at least lend some class to those crowded tourist hubs.
Midtown West's median sales price had a strong showing last quarter at $1 million — up from $745,000 during the fourth quarter of 2007 — and the median listing price is not far off at $1.1 million. Also, according to StreetEasy, only 11 new projects are currently listed for sale, a good sign these days.
However, Gollinger warned that while "inventory is average, this location may do worse than others since its pricing may need to adjust enough to retain a discount to more established neighborhoods, unless the development of Hudson Yards is accelerated."
Prudential Douglas Elliman broker Brian Meier is marketing the most discounted property here: a one-bedroom co-op reduced 34 percent to $365,000. The sellers "are fearful of where the market is heading right now, they're fearful the market is going to drop another 10, 20 percent," he said. "They don't want to hold out for more money … they don't think they're going to get it."
In general, he's recently been getting offers up to 40 percent below asking price, and in this market Meier said sellers have to consider them. As for new towers, he said most in Midtown West are nearly sold out, so developers aren't as likely to offer steep discounts. But in markets like Harlem and the Financial District, while not advertised, developers are negotiating huge deals, he said.
Midtown East
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Midtown East, which includes Sutton Place, Beekman, Turtle Bay and Central Park South, has been one of the "sweet spots" for foreign investors, helping to elevate the market here in recent years, said Miller.
"[But] that's not as contributing a factor now as it has been because the economies where those buyers originated from are having their own economic problems. There was a tremendous amount of demand from Europe," he said, "and I think every country in the European Union is having financial difficulties right now."
The median sales price plummeted 22 percent since its peak of $1.04 million during the first quarter of 2008, to $757,225 this past quarter. The median listing price of $1.2 million would have to fall 37 percent to meet that figure.
Gollinger said he's not currently looking at new developments marketed here, of which StreetEasy only lists nine, and predicted the price adjustment would be more in line with the citywide average.
Still, there are steep discounts on even this district's most affluent strip, Central Park South.
The Plaza Hotel's "Astor Suite" has been marked down 31 percent to $38 million, and an 11,000-square-foot apartment facing Central Park, currently used for offices, has been discounted 17 percent, to $24.9 million.
Midtown East's second biggest fire-sale price is at the Centria, where one of the last remaining sponsor units has been marked down 38 percent to $780,000. Kim said, "This is a 600-square-foot studio on a low floor in Midtown.
She added, "$1,300 per square foot is too high for the current market. This should be priced at $650,000."
Upper West Side
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Real estate headlines for the Upper West Side have been dominated by 15 Central Park West, considered Manhattan's most successful real estate venture in years, with brisk sales and nearly seven dozen apartments closing above $10 million. One was even promptly re-listed for a massive markup at $80 million, now discounted to $47.5 million.
Such a discount from an obviously speculative listing could hardly be counted as a legitimate fire sale, but it should be noted there are four other relatively modestly priced apartments in the Robert A.M. Stern building that have been discounted between 13 and 23 percent, which would still turn a profit for the ones being flipped.
Counter to the example of this outlier, the overall median sales price on the Upper West Side declined nearly 20 percent since its peak the first quarter of last year, from $1.04 million to $832,500. Kim of StreetEasy noted the current median listing price is still 10 percent higher than the peak, signaling something of a distance to the bottom. But other sources predicted that the draws of Central Park and Riverside Park, coupled with a relatively small amount of new construction, could help insulate the market.
The largest percentage price cut is for a two-bedroom co-op, which for a time was marketed with its neighboring apartment. Individually, it was knowingly listed for an unrealistic figure of $1.76 million, said listing broker Jim Testa of Prudential Douglas Elliman. "I guess there was a very special odd possibility ... but they never expected they would see that number," he said.
After a series of price cuts "before the stock market bit the dust," Testa said the sellers had a contract signed for $1.2 million. "Then [the buyers] walked away from their contract." The apartment is now listed for $995,000.
Upper East Side
The Upper East Side, home to some of the city's wealthiest residents — including Mayor Michael Bloomberg and the notorious Ponzi-scheme mastermind Bernard Madoff — has long been considered one of the safest real estate markets in the city. The median sales price has steadily increased since the fourth quarter of 2006, from $686,250 to $975,000 in the fourth quarter of last year.
But those familiar with the market agree that prices need to take a hit here just like everywhere else, particularly considering the slew of unsold new apartments weighing down the market. More than 2,200 listings are active in this district, which includes Yorkville, Carnegie Hill and Lenox Hill. Since developers only list a select number of units at once, even more "shadow inventory" is on the way, sources warned.
One prominent local broker, who asked not to be named, said, "I would advise sellers to price their property as close to 20 percent lower than comparable peak sales," calculating a premium or discount for factors like view and renovations. Just looking at the median listing price today versus the median sales price last quarter, that's a huge drop of 45 percent.
Even the duplex of late philanthropist Brooke Astor, an apartment designed in 1931 by celebrated architect Rosario Candela, had its price reduced to $29 million last month, $17 million less than its original asking price.
Because prices are dropping so rapidly, contract holders are organizing revolts against developers, often on blogs and StreetEasy's chat forums, to either get price reductions themselves or their deposits back. Attorney Adam Leitman Bailey said he has groups of contract holders at the Manhattan House in the Lenox Hill section of this district and at the Brompton in Yorkville, among "many other buildings" in the city, seeking to terminate their contracts.
Uptown
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Unlike several other fledging Manhattan real estate markets, the median sales price from the northernmost tip of Manhattan down to 156th Street has ticked up over the past three years, from $349,000 in the fourth quarter of 2006 to $396,000 in the fourth quarter of last year. Inwood and Washington Heights have been known to woo buyers with their heavily discounted real estate, stunning western waterfront views and ribbons of parks — including the city's last primeval forest, Inwood Park.
Still, with a median listing price 25 percent higher than last year's median sales price and a long commute to central Manhattan, a decline is expected. Plus, the vast majority of residents are still renters.
Kim noted that 39 percent more listings are on the market today than a year ago, and that's with several new buildings shuttering their sales offices. "The location of the area is neither central nor convenient and [the] housing stock is old," she said.
Melvin Caro, a broker for Nest Seekers and co-developer of three townhouses, said he expects many unsold units to be remarketed to renters — already 90 percent of the residents — and for unfinished projects to save money by downgrading amenities and finishes.
His planned townhouses at 203 Cabrini Boulevard, each with its own elevator, are the area's three priciest residences at $2.95 million each, and also the most discounted — they were originally marketed in 2005 at $4.8 million.
Caro said the project became entangled in convicted attorney Anthony Bellettieri's money laundering scheme. "Then, we resolved the issue with the lost money, but the bank [Chevy Chase Bank] is still refusing to allow us to pull any money out of the construction loan."
Now that Capital One Financial Corp. purchased the bank, Caro said he hopes to finally get the financing necessary to pour the foundation.
Harlem
Harlem, including Hamilton Heights, Manhattanville and Morningside Heights, has historically been shaped by boom-and-bust cycles. Speculative developers typically overbuild high-end housing at the height of the market, and then are forced to drop prices once it crashes.
Experts agree that the same thing will happen this time.
There are 44 new projects currently being marketed here, according to StreetEasy, the highest of any district in Manhattan.
It is "a perfect storm of increasing prices, diminishing market demand, and too much development pipeline," said Gollinger. "This neighborhood will likely experience price adjustment on the upper end of the range."
The median sales price in these neighborhoods has been steadily dropping since its peak in the second quarter of 2007, from $712,919 to $496,500 the fourth quarter of last year. Miller said this area, together with the Uptown market, has seen the highest decrease between recent signed contracts and contracts signed for similar properties a year earlier.
The most expensive listing is a luxurious duplex penthouse listed at $14.5 million three years ago at 1200 Fifth Avenue, a newly renovated prewar building across from Central Park and Mt. Sinai Hospital. Only a third of the apartments in 1200 Fifth have been sold.
A well-placed source said there are a dozen investors in the building and only half have agreed to start discounting apartments. "We're just waiting on the other half," said the source.
Tamir Shemesh, managing director of Prudential Douglas Elliman, marketed a Harlem property that backed out of the market early, turning into a hostel. "The Lotta Condo was priced very well," said Shemesh. "The problem is we launched in a grim economic [climate]. Most of the buyers in Harlem are not cash buyers. They rely heavily on bank financing, and that's just not available."
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Comments
Nelson Benson
Interesting how History repeat itself. However, we should note in the same context, that if you add up all the aformentioned apartments, we are only talking a few thousand units. So while the narrative implies a flood of seemingly infinite supply, the facts indicate that it is the amount but the price. When these two meet, the inventory will be gone, and this Island of ourse, will resume its upward movement. It will be a year, two, three, but we all know the ending.
Comment #1 Posted By: Nelson Benson 03/02/09
Anonymous
"we all know the ending" NYC property will appreciate again, yes, but not in a year, two or three. This downturn which includes asset price deflation and debt liquidation, will be harder than any that Nelson Benson or I have experienced IMO.
Comment #2 Posted By: Anonymous 03/02/09
Anonymous
Nelson, wake up buddy and stop smoking the crack! Manhattan real estate is in freefall and will not stop until ppsf is around $300. Wall Steet is over!!!!!!!!!!!!! Dow is trading back at '97 prices and will go lower. Real estate has at least that far to fall. NO MORE LEVERAGE!!Tons of supply on the market, no more foreign investors to buy it, and the people that pay the majority of taxes will no longer have jobs (and certainly will not get bonuses)so they are out too, as are the minions that wait on those people (i.e. you). 4Q 2008 prices will seem like a dream just as NASDAQ @ 5200 does and that dream dies 9 years ago. Sellers, WAKE UP !! Nelson, You are toast my friend!
Comment #3 Posted By: Anonymous 03/02/09
Tommy Obama Lewinsky
Frankly, it is about time. Along with the unwinding of the above aforementioned, will be the unwinding of wages. We have been in an "employment" bubble for years now that has decimated the middle class, we will see all areas come back to center. It is about time... This is what Bush tax cuts, zero investment in education/energy/health care/etc and wasted resources in wars has left us. But everyone reading this is a liberal, so there needs no embellishment here. Conservatives, please stay the course, don't wake up because your way of being is dead.
Comment #4 Posted By: Tommy Obama Lewinsky 03/02/09
Anonymous
#5, you must be a brokah! you probably have a leveraged house in the hamptons too. no bids on that either. your favorite restaurant will be closing too! you should break out those big toed clown shoes that you wore in '97 too!
Comment #5 Posted By: Anonymous 03/02/09
Anonymous
where is the best place to buy?
Comment #6 Posted By: Anonymous 03/03/09
Anonymous
RE: Comment #7: Wait six, eight months until units start auctioning/ sellers get really desperate, buy in Lower East Side/ East Village somewhat near a train station. That is the neighborhood where the curves of greatest price drop and best potential for a neighborhood to retain/ increase its desirability meet at the most favorable place, if you want to sell the unit in, say, 10 years at the next height of the market and make a huge profit. Or, look at the other neighborhoods that have seen an increase, not decrease, in sales price between 2007 and 2008, and those are the least vulnerable. Again, wait at least six months to make an offer on a place, and only buy something that's been heavily discounted.
Comment #7 Posted By: Anonymous 03/03/09
Anonymous
# 8 your advice is so ridiculous you must be posting from someplace far west of the Hudson. You have no clue as to what you are talking about.
Comment #8 Posted By: Anonymous 03/03/09
Anonymous
What would your advice be, #9?
Comment #9 Posted By: Anonymous 03/03/09
Anonymous
#9 is so sad. he is quite obviously someone who has never made money is his entire life. his lack of knowledge and unrelenting pessimism is pathetic. he quiet obviously is a loser that hopes the market continues to fall so that nobody makes money... this is typical of someone who does not have the smarts, ability or balls to do anything on his own. stop wasting people's time and get back to your remedial job.
Comment #10 Posted By: Anonymous 03/03/09
The Manhattan real estate market, like any market, needs clarity. The stock market is cratering due to lack of clarity on the bailout and the economy in general. I think the April auctions of Manhattan condos will shine some light on where prices are. At peak Manhattan real estate sold for 1200-1500/sq ft. Bids will open at 600 sq ft at these auctions. should be interesting.
Comment #11 Posted By: 03/03/09
Anonymous
When a company's earnings do not go up then their employees wages do not go up. Historically, home prices and wages have risen in tandem. Wages are not going up so housing prices have to come down. And down they will go. We will see S&P at 500. That $600 ppsf is going to look far too rosey once April comes around. NYC housing will retrace to levels seen in the late 90's ($300 ppsf) by the end of next year. There need to be bids for things to trade and there is no smart money out buying right now.
Comment #12 Posted By: Anonymous 03/03/09
Anonymous
BY the way, #11 probably owns a house in the Hamptons too. That market will be absolutely decimated. How many people refinanced and took money out of their primary residence to purchase a place (i.e put 10 or 20% down) out east? You will soon find out soon enough! Half of this crew (non wall streeters that joined the suburban arms race and were racing to keep up with the jonesteins) had sub-prime loans (or something pretty close). Now that their primary residence in NYC is being devalued on a daily basis they are getting margin-called. the first thing to go will be the house out east. you know what happens when everyone tries to puke their assets and there are no buyers around? that's right. firesale!!...........i smell smoke!
Comment #13 Posted By: Anonymous 03/03/09
Anonymous
I don't think any of you know what you're talking about!
Comment #14 Posted By: Anonymous 03/03/09
Anonymous
I love the guys who equate having balls with success. Those big ballsy moves caused the loss of trillions in market value that only existed because of their big swinging balls. Hopefully they sold at the height but I suspect they are doing the tight twist and wish they just had the money back that they spent on bottle service in the hamptons last summer.
Comment #15 Posted By: Anonymous 03/04/09
Anonymous
I dread this summer when all the neurotic retards that are usually in the Hamptons for the summer are instead, walking around manhattan, annoying everyone they come in contact with
Comment #16 Posted By: Anonymous 03/04/09
one
Manhattan is a unique place. How many people are desperate to sell their properties for less than $700 p/sf in 2009? How many people wouldn't afford their mortgages in 2009 in Manhattan? How many people would refuse to purchase desirable apartments for $600 p/sf? What was sold for $1 mln in 08 won't drop to $500K in 09.
Comment #17 Posted By: one 03/04/09
Anonymous
hey one (#18), you are right! manhattan is a unique place. unique in that one industry contributes around 50% to the tax base. unique in that when that when wall st. sneezes, the rest of the island catches a cold. check out the tape my friend. wall street is either dead or owned by uncle sam. sammie don't pay out bonuses and people that are working this year will be working for peanuts by comparison to olden days. How many people are desperate to sell their properties?? LOTS! you better beat the rush and try to sell now. Oops, no bids! GAMEOVER!
Comment #18 Posted By: Anonymous 03/04/09
one
hey, #19, be specific; give us the numbers. Will we see a drop of a unit from $1000 p/sf of 08 to $500 p/sf in 09?
Comment #19 Posted By: one 03/04/09
Anonymous
#14,#19 are correct. Prices out east are dropping and will only get worse as a tidal wave of inventory hits the hamptons mid season. $24.95mil, reduced to $12.95mil, everyone knows that the builder is in at $7 tops and overpaid for the land. Same goes for the lower end. The people who didn't drink the cool-aid the first time around will not even consider entering this market until 50 off 2004 prices start showing.
Comment #20 Posted By: Anonymous 03/04/09
Anonymous
No One, what sold for 1mil in 08 will not drop to 500k in 09, it will drop to 300k in 10.
Comment #21 Posted By: Anonymous 03/04/09
one
>No One, what sold for 1mil in 08 will not drop to 500k in 09, it will drop to 300k in 10.< If you "predict" 300k in 10, it has to be 500k in 09. I don't think you would pass on a chance to get a 1 mil apartment in 08 for 300k. Manhattan is no Florida or Nevada.
Comment #22 Posted By: one 03/04/09
Anonymous
Manhattan is Florida and Nevada but sellers will not believe that until mid 2010 when they are forced to sell or foreclosed at 70% reductions. There will be a leveling and possible uptick in values this fall as everyone once again puts their faith in the hands of the astute pros who will tell all that NOW is the time to jump back in. That's when you will know that they got it wrong once again and the great slide of 2010 will begin.
Comment #23 Posted By: Anonymous 03/04/09
Anonymous
Interesting how Mr. Miller is more careful in this article than the New York Times. Or maybe the New York Times doesn't have the money to print what he wants to say?
Comment #24 Posted By: Anonymous 03/04/09
Anonymous
My God, where have I been if I can purchase and combine a duplex and a triplex in the Palazzo Chupi for only $41 million when Mr. Schnabel built the entire structure with a $33 million loan? If only I could smash a few tousand plates, rearrange and sell them at $100,000 a crack to my overserved friends and fools, I too could indulge in this fantastically overpriced and extremely profitable venture. Congratulations are due to this artist because he WON!
Comment #25 Posted By: Anonymous 03/04/09
Anonymous
Info to share in a newsletter?
Comment #26 Posted By: Anonymous 03/05/09
Anonymous
#26: Schnabel didn't actually sell the Palazzo Chupi combo for $41 million and he probably won't, mainly because it's hideous. The inside is filled with exposed bulbs attached to the non-matching wood ceiling with those off-white ceramic mounts seen in low-end laundry mats and butcher shops, and also the pipes from the sink are exposed too, but not in a chic way since they are also the same pipes attached to the same dinky sinks seen in gas station and bodega bathrooms. Anyone with taste that buys that thing would have to totally renovate, starting with the hideous pink paint job on the outside. I say, just for the space, it's worth $7 million, considering gut renovation is necessary.
Comment #27 Posted By: Anonymous 03/05/09
Anonymous
None of you guys know what you're talking about. Nearly 3 years ago, many Americans stopped buying in Manhattan because the prices were too high to make sense of, much less AFFORD. THE INDUSTRY ASKED IF THE SKY WOULD FALL in the second half of 2006. People paused and held their breath. 'Investors' fled the scene. But because of foreign buyers smelling currency bargains and the January 07 spewing out of $35Billion in Wall Street bonuses, the market continued it's growth. The word that the greatest architects in the world were doing Manhattan spread to the global super-rich community. But smart developers bet on smaller projects and many sold their land to commercial interests or converted to hotels. Only a few dumb novices and mega-developers awash in cash continued to build in Manhattan, because the costs of land, construction, and materials had jumped 40%. THE QUALITY OF DESIGN AND MATERIALS MEANS PRICING WON'T GO LOWER THAN 2005 AVERAGES. PEREIOD.
Comment #28 Posted By: Anonymous 03/05/09
Anonymous
#29, Commercial space in manhattan has gone from a high of $183 ppsf to current prices with deals being made close to $50 ppsf. That market is trading at almost 25% of where the top was. Residential real estate is a bit stickier so things take a bit longer to flush out but $300 ppsf sounds about right for 2010 since bonuses should be ZERO for 2009. Design and materials don't count for much when people are unemployed. For good desing check out Ebay, lots of chix selling their shoes online!
Comment #29 Posted By: Anonymous 03/05/09
NelsonBenson
So many smart people. I do not doubt that prices will fall. And it matters principally to people selling NOW. But what people forget, is that most of the properties that are dropping precipitously, which are new condo's, have been overpriced from the get go. In other words, grand larceny. However, when the storm passes, as it shall, Manhattan is still Manhattan. There will always be only one intersection of 18th and Fifth, or 65th and Park. Anyone comparing this to Arizona or Nevada should not be in this business. By the way, I dont have vested interest. I dont care.
Comment #30 Posted By: NelsonBenson 03/07/09
NelsonBenson
Oh, and I agree, to what number 5 said about number 3. It's probably true.
Comment #31 Posted By: NelsonBenson 03/07/09
Anonymous
Nelson, new condos are dropping because developers are leveraged and need to sell them at any price. old condos/coops are next because their owners are leveraged too..they just have a little mmore time. need to sell the place out east first, wait hope and pray market will come back along with thier wall street job. won't happen. then the firesales begin. who cares about nevada and az? there is plenty of desert. it will take at least a decade to recover from the last two. 300 PPSF by 2011.
Comment #32 Posted By: Anonymous 03/07/09
Anonymous
Wow, now people are talking about 2011? 300 ppsf will be the norm last q of 2010. 2011 will go even lower, say 1992?
Comment #33 Posted By: Anonymous 03/08/09
Anonymous
#36, now that is doom and gloom but you are closer to the mark than anyone else on this rag. when do they turn the lights out in westchester/fairfield counties. lots of men with soft white hands will be out of work and there will very little asset backed paper to peddle. divorce rate should skyrocket!
Comment #34 Posted By: Anonymous 03/08/09
Anonymous
nelson, people would get shot in AZ or NV for doing the things that they do west of that intersection (18th and 5th). the "creative" community will get rocked too. all the fabulousness of the last 10 years was just smoke and mirrors too. pathetic middle class poseurs pretending to be glamorous with their mass market luxury goods living in a world they could barely afford!
Comment #35 Posted By: Anonymous 03/08/09
Anonymous
right on #36!!! Carrie Bradshaw should be jailed...
Comment #36 Posted By: Anonymous 03/10/09
Anonymous
Amen
Comment #37 Posted By: Anonymous 03/11/09
Anonymous
manhattan real estate $300 ppsf right around the corner!!
Comment #38 Posted By: Anonymous 03/13/09
Anonymous
where does everyone think manhattan will be when we hit bottom? how low will price per square feet be? i was planning on buying, but no i think i need to wait it out. i'm not sure what to do anymore or how low manhattan real estate will go.
Comment #39 Posted By: Anonymous 03/15/09
Anonymous
$300 ppsf by the end of 2010.
Comment #40 Posted By: Anonymous 03/16/09
NelsonBenson
I disagree, and I have no vested interest in it dropping or rising. The real ponzi scheme was with new developments, where people were willing to fork two and a half millions for a two bedroom condo to impress their friends with granite and big bathrooms (not noticing the small bedrooms). These condos will drop precipitously simply because they were overpriced and that the maintenance is too high in relation to the cost (which makes it also more difficult to finance) However, the fundamentals remain, that once these condos are cleared and liquidated, the city is still 85% rental buildings and the supply of available and desirable apartments, especially co-op, is relatively limited. Plus, these were never sold as high as condos but simly followed them for the ride. Yes, there was a bubble but there is still only one corner of 65th and Park. I predict that depending on the area, unit, and maintenace, prices will drop 5%-25% but not more. And will rebound much quicker than before.
Comment #41 Posted By: NelsonBenson 03/16/09
Anonymous
nelson, you my friend are wrong! Manhattan has a 30% ownership and 70% rental market. The interesting Barrons article recently told us how normally the NYC cost is 4 times income for purchasing a home/apartment etc. Recently it was 7.7 times income. To get back to where we need to be at 4 times income would require a 46% reduction in price across the city. We are not including the effects of the recession which will not be healed overnight. Therefore, we should not be surprised at all if a greater then 50% decline should occur within the next 2 years or so. Peak to bottom could easily be 60% or more, I am betting on 70%. After that a bottom plateau with no growth in prices for 5 years followed by very slow appreciation of 1-2 percent per year.
Comment #42 Posted By: Anonymous 03/16/09
Anonymous
my hound typically relieves himself at 65th and park!
Comment #43 Posted By: Anonymous 03/16/09
Anonymous
$300/SF is very realistic.
Comment #44 Posted By: Anonymous 03/17/09
Anonymous
65th and park will be $400 ppsf
Comment #45 Posted By: Anonymous 03/17/09
Anonymous
You all are idiots... Miami with it's glut of condos isn't even at 300/sqft. You sound like a bunch of vultures with fantasies of owning a cheap apartment.
Comment #46 Posted By: Anonymous 03/18/09
Anonymous
My hound also uses 65th and Park to relieve himself.
Comment #47 Posted By: Anonymous 03/18/09
Anonymous
Miami,with its surplus of inventory (thousands of unoccupied units), is not really a new york comp since you do not taxes approaching 50% of income. Maint. costs are inching up towards $1 ppsf per month which is similar (1/2) to NYC prices. A 1 bedroom (866 sq. feet avg) at $300 ppsf would cost 260k. Assuming 25% down (in case of co-op), a person would have to come up with 40k down plus pay $1350 a month in mortgage and another 1500 in maint. Anotherwords, a person needs to make 72k before tax money just to live in a manhattan shoebox..and this at $300 ppsf. Prices go here easily in the new world!
Comment #48 Posted By: Anonymous 03/18/09
Anonymous
what happens in a financial crisis? Assets get cheap!! There will be no fantasy when it comes to owning apts. in manhattan that are cheap. one and two bedrooms are a cookiecutter and plentiful and you will get your pick for close to what is costs to own a one bedroom in the rest of the country!
Comment #49 Posted By: Anonymous 03/18/09
Anonymous
another indicator to watch is the divorce rate. it is skyrocketing in NYC and in westchester/fairfield counties. guys are getting taken to the cleaners on the home front too and most people are going to need to downsize because of this factor too. many a gold digging (shoe and bag buying troll) is going to get tossed out onto the street in this downturn!!
Comment #50 Posted By: Anonymous 03/18/09
Anonymous
all these factors will conspire to bring prices back to 2002 levels: - nyc unemployment over 10% with highly-compensated wall streeters, attorneys, consultants leading the payroll exit - distressed sellers of existing supply - new condo supply that has to discount - absence of europeans - tightened credit for new mortgage loans this market will with absolute certainty continue to fall. all the way back to 2002, maybe even more.
Comment #51 Posted By: Anonymous 03/18/09
Anonymous
2002, maybe even more. YOU ARE CORRECT SIR!! '95 is more like it! what are all the white boys with soft bankers hands going to do now that the gravy train has crashed??????????????? wall street is the engine that makes everything else move in NYC and without those bonuses the city will get decimated. in case you have NOT been watching AIG hearings.........NO BIG BONUSES for the near future. certainly NOT for the rank and file. GAME OVER! stock market and real estate market will retrace to levels seen in '95
Comment #52 Posted By: Anonymous 03/18/09
Anonymous
So when is the right time to buy in manhattan???
Comment #53 Posted By: Anonymous 03/18/09
Anonymous
#17, wait until this fall, and then wait another 6 months when desperation sets in. fire sales will begin early 2010. spontaneous combustion, fall of the same year.
Comment #54 Posted By: Anonymous 03/19/09
Anonymous
To: #18 I typically do not believe in market timing but something tells me you are spot on. A year and a half from now NYC will be a different place..............much cheaper!
Comment #55 Posted By: Anonymous 03/19/09
Anonymous
adding to the pain - the american taxpayers will get billions of wall st bonuses back. that means even less money to be recycled into manhattan property. if you are a broker or owner who wants to sell, may I suggest that you wake up and smell your lattes. you have to slash prices even more. the party is long over.
Comment #56 Posted By: Anonymous 03/20/09
Anonymous
No chance of $300 psf. Do any of you writing this actually believe this is going to happen?! I agree the market will continue to deteriorate through 09 but it is not even a reasonable comment to state market values will fall by 2-300%, get real. The amount of foreign investment and vulture capital foccused on the new york real estate market will at worst, allow prices to dip south of $700 psf in prime areas (wv, gv, soho, etc) but beyond that is hard to fathom.
Comment #57 Posted By: Anonymous 03/23/09
Anonymous
#21, sorry about your NYC investment. vulture capital does not focus on one and two bedroom condos or coops. prices will fall way more in 2010 than in 2009. high end properties are a different animal but for people buying one and two bedroom apartments it will be worth their while to wait it out. lack of leverage will magnify the results on the way down just as they were magnifies on the way up. in case you have not been informed, foreign capital is toast too. we are all in the same boat............and it is sinking! NYC sinks the most from here.
Comment #58 Posted By: Anonymous 03/23/09
Anonymous
"shoe and bag buying trolls" ?? misogynist much?
Comment #59 Posted By: Anonymous 03/23/09
Anonymous
Not a lot of bright lights on this page. Wall Street firms will repay TARP money asap to control their comp and the trillions of dollars on the sidelines will enter the market within 12 months as they perceive the values to bottom out. The short to mid term profit opportunities for hedge funds, I-banks and other distress capital pools is enormous and we will return, in due course, to masters of the universe earning $10MM a year.
Comment #60 Posted By: Anonymous 03/23/09
Anonymous
#24 GAME OVER!!!!!!!!!!!!! he dead bodies are starting to float to the surface. they will start to stink soon enough. NYC real estate meltdown is just beginning!
Comment #61 Posted By: Anonymous 03/24/09
Anonymous
#21 prices can not fall more than 100%.
Comment #62 Posted By: Anonymous 03/24/09
Anonymous
3X wages (250k capped) = 750k or a good price for a three bedroom apartment!
Comment #63 Posted By: Anonymous 03/24/09
Anonymous
#24, are you John Thain? still on your own planet? wall street will never be the same. oh sure, some here and there will make their millions, but with little or no leverage and heavy government regulation, the game is over. so why don't you apply for that barista job at the corner starbucks and make yourself useful to society.
Comment #64 Posted By: Anonymous 03/24/09
Anonymous
#24, make me some coffee. nelson, true, there is only one hamptons too but you will only find bids at 50% of the last sale going forward. how long can the masters of the universe hold on out there. one more season at bes. manolos, birkens, and boxsters will all have weak bids on ebay! OBAMA!!
Comment #65 Posted By: Anonymous 03/24/09
Anonymous
#24, I'll take a grande mocha frappachino! If you put your best skills to work, I'll give you a buck tip!
Comment #66 Posted By: Anonymous 03/24/09
Anonymous
Right on! I am more convinced than ever that real estate has another 25% to fall, and best case, it is dead money for another five to ten years. The New York Times produced some insightful data on inflation adjusted home prices for the last 120 years, which baselines at a $100,000 for a single family home in 1890. Few people realize how superheated the recent real estate bubble really got. Past bubbles very consistently peaked at $125,000 in 1896, 1979, and 1989. This last one peaked at $205,000 in 2005, almost double the previous record highs. And while we have dropped 34% since then, to $135,000, we haven’t even fallen to the past all time highs yet. If you look at historical lows, my call for a further 25% slump looks positively bullish. We saw lows consistently around $66,000 in 1920, 1932, and 1942. Postwar lows came in at $105,000 in 1976, 1983, and 1996. These figures suggest the best case low is down a further 28%, and the worst case is down another 51%. I think I’ll go find something else to trade. www.madhedgefundtrader.com.
Comment #67 Posted By: Anonymous 03/25/09
Anonymous
is real estate.
Comment #68 Posted By: Anonymous 03/26/09
Anonymous
the best hedge against inflation
Comment #69 Posted By: Anonymous 03/26/09
Anonymous
raw land or income producing real estate can hedge a portfolio against inflation. inflated real estate is the last thing you want to own in the deflationary death spiral that precedes inflation. hence, the yard sale that they call the hamptons!
Comment #70 Posted By: Anonymous 03/26/09
Anonymous
Prices should fall at least 40% and stay flat another 10 years like in 87 to 97. By the way not everything revolves around Wall Street.
Comment #71 Posted By: Anonymous 03/30/09
Anonymous
Divorced, unemployed and soon to be foreclosed, I will soon be releiving myself at 65th and Park Too.
Comment #72 Posted By: Anonymous 04/02/09
Anonymous
The fed and treasury are in cohoots to reinflate, as that is the only way we as individuals and a country can repay our debts. Deflation for the next year or so, then (hyper?)inflation really will kick in, and if you think real estate will look like a bad investment for the next several years, compare that with what will happen to the purchasing power of cash you have stashed in the bank. Commodities/TIPS now, and real estate in a year to hedge yourself.
Comment #73 Posted By: Anonymous 04/02/09
Anonymous
No one here called the top. No one here called the bottom. Just because you "feel" like 2010 is going to be the bottom, doesn't mean it will be. Stop wasting your time writing about what you don't know and get me another coffee.
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