Brokers lament high inventory

Drop in residential transactions as buyers grow more cautious

Jun.June 02, 2008 06:12 PM

With the traditionally sluggish summer season upon us, the advent of the credit crisis not too far behind and inventory piling up, real estate brokers are bracing themselves for what could be a particularly slow few months.

The number of co-op and condo units and townhouses on the market jumped 11 percent to 7,212 homes between March and April, according to the most recent research from appraisal company Miller Samuel. From February to March the increase was 4.8 percent, Miller Samuel data indicate.

“Inventory levels are rising primarily as a result of lower sales activity,” said Jonathan Miller, president and CEO of Miller Samuel.

Buyers are weighing options more carefully, sellers have not been eager to slash prices, and there appears to be no reason for that to change now.

“Buyers are taking much longer to make their decisions, and there is a large amount of insecurity and concern today [due to the] recession, economic slowdown and job security,” said John Harhay, a vice president and sales manager at Manhattan Apartments.

“Many properties are still being priced too high,” said David Cooper, a vice president on the Jacky Teplitzky team at Prudential Douglas Elliman. “Most sellers believe their properties are actually worth more than they really are.”

While prices may be going down, a surge in closings at the Plaza Hotel and 15 Central Park West in April drove the median price up, according to data from Terra Holdings, parent company of Brown Harris Stevens and Halstead Property. There was “a significant pickup in closings at the Plaza and 15 CPW, 48 in April compared to 26 in March,” said Gregory Heym, executive vice president and chief economist at Terra. The median sales price ticked up 5 percent to $945,000 in April from $900,000 in March, the data show.

The rental market does not look like it will reach eyebrow-raising prices after a period of units languishing on the market and rents staying flat or dropping.

“There is still way too much inventory for rent in Manhattan, and some owners who are not really in tune with the market are still pushing their rents. They think there are more people out there looking than there actually are,” said Marc Lewis, COO of Century 21 NY Metro.

Slow summer?

The Real Deal wanted to get a sense of how the market is doing. To that end, The Real Deal distributed a survey to real estate experts last month. Here is a sampling of what they had to say:

Marc Lewis, COO, Century 21 NY Metro

We hope the rental market will get really busy, but I anticipate the “Great Recession of 2008” will rear its ugly head, and it will be busier than the winter, but still not a typical summer season with people bidding the rental market up.

Eddie Shapiro, president and CEO, Nest Seekers

The credit crunch seems to be over. Yes, we will still continue to experience side effects, but at least we don’t have to hear about it every single day.

Jessica Armstead, vice president, the Corcoran Group

It is more important than ever to be pre-approved before venturing out into the Manhattan real estate market. Lending criteria has changed.

Antonio del Rosario, managing director and executive vice president, Barak Realty

June will be tough for sellers of studios and one-bedrooms because of the surge of inventory we are experiencing.

Deanna Kory, senior vice president, the Deanna Kory Team, the Corcoran Group

Overpricing is the kiss of death in this market.

Kathleen Brimlow, director of planning and development, Manhattan Apartments

I believe we will see fewer transactions in June and July.

Yuval Greenblatt, executive vice president, Prudential Douglas Elliman

Activity seems to suggest there are plenty of buyers.
However, more seem unrealistic and looking for discount opportunities that do not exist.

Melissa Leifer, senior agent, Best Apartments

The rents are going up, less is available, and the quality of the available apartments isn’t as high.

Gloria Sokolin, senior vice president, Fox Residential Group

Would-be buyers are putting off buying, so they are renting instead.

Darren Sukenik, executive vice president of luxury sales, Prudential Douglas Elliman

Banks aren’t lending to able buyers. The pendulum
has swung so far that that in and of itself is hurting the market.

Joanne Wong. senior sales associate, City Connections Realty

I don’t think it’s realistic for buyers to think they can wait for prices to resemble what one would find in other boroughs.

Gil Neary, managing partner, DG Neary Realty

Low owner-occupancy buildings and buyers who cannot go full doc[umentation] are hitting a bumpy road with lenders.

Jim Mazzeo, president, Weichert Realtors, Mazzeo Agency

The apartments are taking longer to sell and require more showings.

Heather Bise, associate broker, DJK Residential

Prices are still inflated, and we are seeing many buyers holding out for lower prices.

Adina Azarian, founder and CEO, Adina Equities

I believe there will be even more incentives given to buy in new developments and a lot more wiggle room off asking prices as sellers get more anxious.

Timothy Bascom, proprietor, Bascom Real Estate

Open house customers [had] dropped a bit. However, it seems to be increasing. Still, we see properties staying on the market for a longer period of time.

Compiled by Lauren Elkies


Related Articles

arrow_forward_ios
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
 Fredrik Eklund and the property (Getty, Steve Frankel)
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Gordon Ramsey and his Lucky Cat restaurant (Lucky Cat)
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Gordon Ramsay to open first South Florida restaurant in Miami Beach
North Dakota businessman scoops up 2nd unit in Extell’s One57
North Dakota businessman scoops up 2nd unit in Extell’s One57
North Dakota businessman scoops up 2nd unit in Extell’s One57
(Facebook via The Palms Hotel Fire Island)
Fire (Island) sale: Palms Hotel hits the market
Fire (Island) sale: Palms Hotel hits the market
Five Jamaica Estates homes fit for a king (of Queens)
Five Jamaica Estates homes fit for a king (of Queens)
Five Jamaica Estates homes fit for a king (of Queens)
City’s tallest warehouse could be coming to Queens
City’s tallest warehouse could be coming to Queens
City’s tallest warehouse could be coming to Queens
(Getty)
Weekly home listings hit record low
Weekly home listings hit record low
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...