Manhattan apartment sales plunged the most in 18 years last quarter as buyers faced the prospect of a recession and job cuts at Wall Street securities firms. First-quarter sales fell 34 percent from a year earlier and inventory rose 4.6 percent to 6,194 units, New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The median price of a Manhattan co-operative apartment or condominium increased 13.2 percent to a record $945,000. ``If it continues along this pattern, we're in a period of transition to a weaker market,'' Miller Samuel President Jonathan Miller said in an interview. ``You typically see a slowdown in sales activity precede a slowdown in pricing.'' Financial companies have cut at least 34,000 jobs in the past nine months as losses and writedowns related to mortgage- backed securities climbed to at least $230 billion. Wall Street drives Manhattan real estate, with the median apartment price roughly tracking bonuses paid by investment banks since 1997, Miller said. Until now, Manhattan has avoided the national housing slump. Last year, the U.S. saw the first drop in existing home prices since the Great Depression, while Manhattan apartment prices rose 3.6 percent, according to Miller Samuel. http://www.bloomberg.com/apps/news?pid=20601087&sid=a2bKcC6ZeVmQ&refer=home
Who said manhattan was recession proof, they cannot sustain those type of prices, I would not be surprised to see prices come down 5-10% by mid 2008.
Talk to people in Manhattan, they say "Manhattan is different" than the rest of the country and it is, but it isnt bulletproof
I wonder if the swings in Manhattan, like stock, are higher beta. Since the feeding frenzy of the last few years was driven by leverage on Wall Street, this let them make unsustainable gains (ie highly leveraged bets that paid off); likewise, with the credit spigots or at least not as much leverage, this decreases their earning power. Ie the engine of NYC real estate is a function of the leverage the financials used -- since its gone, will NYC real estate also suffer worse than the rest of the country? I know it seems heresy to say that; but those are usually the best trades.
Suss------As long as prices remain "firm", it's not a "problem". Are you going to buy something in NYC with your '07 bonus?
Manhattan is overflooded with million dollars condos, which are cheap crap and ridiculously overpriced. All of it rides on Wall Street fortunes and now you see that tide turn. There already are a few high rise developments which have been abandoned halfway through. The ultra rich condo market will still keep on trucking.
try to rent a nice place in manhattan. tell them the market is going down, see what happens...rental prices are staying firm for now,,,, hopefully they come down shortly. surf