Spring blossoms this month, and its arrival will, as always, bring change to the Manhattan housing market.
“There’ll be a lot more choices for buyers than anything they’ve seen in the last two or three years [this spring],” said Jeff Wolk, president of brokerage Fenwick Keats. “There’ll be a little more tug of war between buyers and sellers.”
Spring might be the most memorable season in the Manhattan market, a collection of months after traditional winter lulls, when deals start to happen again with greater frequency and the market’s tone can be set for the entire year. This spring may be especially telling, following a winter that marked the end of the housing boom nationwide and in the city, and which comes on the heels of a record Wall Street bonus season in December and January. Past springs, then, especially those that followed a tough winter, could provide lessons for the coming one.
Data shows that from the first quarter (winter) to the second quarter (spring), sales in Manhattan generally pick up — often significantly.
Only in three of the last 10 years have sales from the first to second quarter declined, according to appraisal firm Miller Samuel. In 1996, the number of closed sales deals dropped 18.6 percent; in 2001, it dropped 10.1 percent; and, in 2000, sales dipped nearly 2 percent. In the other seven years, sales shot up by double-digit percentages from the winter to the spring. In 1999 and 2002, sales jumped more than 30 percent, according to Miller Samuel; last year, they increased 12 percent.
Overall, over the last 10 years, on average, sales in Manhattan have increased 10.6 percent from the winter to the spring, and, over the last five years, 11 percent.
Much of this sales activity that shows up in springtime is actually fomented in the winter, as deals recorded as closed during the second quarter of the year are often hammered out the quarter before. That means this spring may owe much to the current winter.
“The first quarter is generally our busiest time,” said Frederick Peters, a broker since 1980 and president of Warburg Realty Partnership. “When you’re talking about springs being strong, you’re talking about first quarters being strong.”
The first month of the first quarter of 2006 saw median and average sales prices for Manhattan apartments scratch the levels of the summer of 2005, increasing over both December as well as January of last year, according to a report from Halstead Property.
The average sales price in January was $1,277,568, an increase over the year-end 2005 price of about $1.1 million — and the highest price since June, Halstead reported, when it was more than $1.3 million. The median sales price for a Manhattan apartment in January was $750,000, up from $699,000 at the end of 2005.
Although handicapping the market month-to-month can be difficult, the Halstead numbers jibe with the trend in rising Manhattan sales prices borne out by year-end reports that showed an uptick in average prices from the third to the fourth quarter of 2005, after sizable declines the quarter before.
Generally, all sizes of apartments in locations throughout Manhattan experienced year-over-year price increases in January, according to Halstead. Two-bedrooms on the East Side, for one, ended January with a median sales price of $1.5 million, 30 percent higher than the median in January 2005. Studios and one-bedrooms on the West Side each ended January with median sales prices 29 percent higher than January 2005, and Downtown studios had a median price of $410,750, Halstead reported, a 31 percent increase over last January.
The number of new listings throughout Manhattan was also up in January, according to Halstead, except for apartments with four bedrooms or more on the West Side and Downtown. Fresh listings for studios, one-, two-, and three-bedrooms increased in January over December.
Based on the winter activity so far and the precedent that sales usually pick up in Manhattan in the spring, should brokers be bracing for a flurry of deals in April, May, and June? Probably, market observers say — but not on the scale of the most recent springs.
“You never thought the spring of ’04 could top the spring of ’03, and then it did,” Wolk of Fenwick Keats said. “And you never thought ’05 could top ’04, and then it did. I think now, for the first time in two or three years, we won’t be outdoing ourselves.”