Lack of inventory remained a key concern for Manhattan residential real estate in December, amid what many agents said was a holiday season that was busier than usual for sales.
Coming off a third quarter that saw a 13.8 percent drop inventory and data that showed listing inventory had been on a six-month decline, anecdotal evidence from agents and company heads in mid-December indicated the inventory situation had not necessarily been improving.
“There is such a lack of property,” said Elizabeth Stribling, president of Stribling & Associates, when asked about her concerns for 2004. “We’re all looking for more listings.”
Andrew Heiberger, president and chairman of Citi Habitats, said he also saw “no inventory” in the sales market but a preponderance of buyers.
As a result of the low inventory, agents had less prospective apartments to show buyers. Buyers also tended to converge on properties.
“There’s been more people looking at the same properties,” said Jacky Teplitzky, an executive vice president at Douglas Elliman.
Heiberger said new developments seemed to be drawing a significant number of buyers almost automatically.
“There are a lot of buyers in the market who have seen the five to 10 new condo projects, and if they don’t like them, they are sitting on the fence,” he said. When a new development is ready to start selling units, “you get 20 to 40 percent sold in the first month. There is almost a reserve of people you can count on to buy that amount. After that, it depends on the particular price, location and amenities involved.”
While inventory was low, agents said activity was still more brisk than the usually slow period stretching from Thanksgiving to Christmas and through the first two weeks of January.
“I had an apartment that had not moved for six months – and now I have two parties involved and we have an offer on the table,” said Teplitzky, who said she had sent out two contracts over Thanksgiving. “It’s been busy.”
“We have seen a lot of bids at asking price and overbids,” Stribling said in mid-December. “There seems to be general confidence in the market.” Teplitzky said apartments were getting within 5 percent of the asking price “if they are priced right.”
One reason buyers have been entering the market is low interest rates, and the prospect that they might rise soon, agents said.
“As there is more talk about interest rates going up, people are buying even harder,” said Pam Liebman, CEO of the Corcoran Group.
Expectations about bonuses -which some predicted would be the highest in the last three years – could also have been a factor in December activity, even though bonuses are not paid out until February, and usually don’t have an effect until spring.
“If people were on the fence, the expectation of a larger bonus might help them decide,” said Teplitzky.
Heiberger characterized the expectation for bonuses as “not incredibly significant this year, but a sign of stability.”
As far as expectations for the coming year, Heiberger said it will be “kind of a wait and see in terms of what happens in sales. It will be a good year. But I don’t think it will be better than 2003.”
Stribling said all indications point to “a robust beginning of the year. I think we can clearly predict the first half,” she said.
In the rental market, Heiberger said increased hiring could indicate a turnaround in 2004, adding that Citi Habitats recently got four $10,000-per- month clients from a huge bank, “the first time that has happened in two years,” he said.
Teplitzky said she was surprised that more people weren’t renting given the soft market for rentals.
“What is amazing to me is that you think if the rental market is soft, people would not be buying because they can get a great deal for rentals,” she said. “But people are still buying.”