A return to residential market stability, particularly among high-end listings

March 15, 2011 02:21PM

The Duke Semans mansion at 1009 Fifth Avenue

From the 2011 Data Book: Manhattan’s residential market was fairly lackluster
in 2010, but it was welcome relief from the severe
downturn during most of 2009.

“We’ve gone through this two-year roller coaster of housing
trends because of financing and credit,” said appraiser Jonathan
Miller, CEO of Miller Samuel. Now, “we’re going out of that.
We could see less volatility in these markets going forward.”

Prices remained relatively flat, though sales of higher-end
properties kicked into gear as the driving force in the market
in the later part of 2010 and skewed averages upward.

“Our luxury market has opened up,” said Diane Ramirez,
president of Halstead Property.

The Duke Semans mansion at 1009 Fifth Avenue snagged
the prize for priciest residential sale of the year, trading hands
for $44 million. A $33 million apartment at Trump International placed second. And a $31 million unit
in the Superior Ink building was the top Downtown deal and third priciest overall.

The high-end strength was a change from earlier, when lower-end properties provided the main
momentum in the market, spurred by the first-time homebuyers tax credit, which expired in June.

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The overall picture is cloudy going forward though. With unemployment still a concern and interest
rates “a wild card,” it’s possible that home prices — even if more stable
overall — could slip somewhat in 2011, Miller said.

“I see 2011 as — best case — moving sideways,” he said. “There’s a
significant probability that we could see modest erosion in prices and
sales activity.”

Of course, prices are still far behind record levels reached during the boom.

In Manhattan, homes are currently selling for roughly 14 percent less than they did during the peak
of the market in 2008, Miller said.

Queens is much worse off, with prices 26 percent off from peak levels. Brooklyn has done better, with
prices 10 percent lower.

In the rental market, the median rent for a Manhattan apartment stayed relatively flat year over year.
But a positive sign, particularly for landlords, was the decrease in concessions for renters.
“The incentives aren’t as plentiful and landlords are happy,” said Citi Habitats president Gary Malin.

Finally, in a still tenuous market, those working as brokers might face less competition. The number
of brokers and salespeople working in the industry declined in 2010 compared to the year before.
Whether a strong or weak 2011 will draw more agents back into the business or drive more away
remains an open question.

Click here to purchase The Real Deal’s 2011 Data Book. TRD