Manhattan Condos Get Deepest Cuts As Financial Sector Sees 180k Layoffs So Far

http://www.bloomberg.com/apps/news?pid=20603037&sid=aZ2FN2jxOwHQ&refer=home

Man, it would have sucked to have bought in 2005, 2006, 2007 or last year, huh?

40% and 50% discounts, SO FAR, and more to come, in all likelihood.

Manhattan Financial District Condos Get Deepest Cuts (Update1)
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By Oshrat Carmiel

May 7 (Bloomberg) -- Real-estate broker Ronnie Diamonde expected the three-bedroom apartment in New York’s Financial District, listed in August for $1.64 million and seen by 145 potential buyers, to sell in eight weeks.

The condominium in the triangular-shaped Cocoa Exchange building was reduced twice by a total 21 percent over four months to $1.3 million, according to Streeteasy.com, a service that tracks New York real estate prices. A buyer will probably sign a contract this week for even less, said Diamonde, of the Corcoran Group, who has three other listings in the building.

The Financial District suffered the deepest price cuts in Manhattan in the first quarter as securities firms shed more than 180,000 jobs in the Americas. Manhattan apartment sales fell 48 percent from a year earlier, real-estate appraiser Miller Samuel Inc. said. Sellers lowered prices on almost a third of condo or co-op listings by an average of 11 percent in the Financial District, according to Streeteasy.

Downtown has been “disproportionately impacted by the layoffs and contraction of the financial-services sector,” said Jonathan Miller, president of New York-based Miller Samuel.

In TriBeCa, the site of converted warehouses and the TriBeCa Film Festival, 24 percent of advertised apartments were discounted by an average of 11 percent, Streeteasy said. The deepest cut in the area is at 39 Worth St., which is listed at $5.99 million, a 40 percent discount, Streeteasy said.

SoLow

Sellers in SoHo, home to shops including Prada and Morgane Le Fay, lowered 27 percent of listings by an average of almost 11 percent in the first quarter.

Spurred by tax breaks, developers moved into the Financial District after the 2001 attacks on the World Trade Center. Prices climbed as they bought office buildings and converted them into upscale condominiums.

“The Financial District was definitely an emerging neighborhood,” said Sofia Kim, vice president of research at Streeteasy. “People were being priced out of TriBeCa, but wanted to stay in the school district.”

Then the recession hit and investment banking profits vanished amid more than $1.3 trillion in global writedowns and credit market losses tied to the collapse of the U.S. mortgage market. Wall Street bonuses dropped 44 percent last year, according to New York State Comptroller Thomas DiNapoli.

Cipriani Club Cut

“In any sort of a downturn, the neighborhoods that suffer first and fastest are the emerging areas,” Kim said.

Five of the area’s 10 biggest price reductions are at the Cipriani Club Residences at 55 Wall St., where markdowns ranged from 21 percent to 27 percent as of this week, according to Streeteasy. Prices were whittled at 18 of the building’s apartments in the first quarter. That number now stands at 27.

The dwellings are attached to a restaurant, party and concert space. Amenities include a wine vault, a movie screening room with velvet recliners, a barber shop and free muffins and croissants delivered daily to residents’ doors.

A 1,500-square-foot, two-bedroom condo, listed in June 2006 at $2.55 million, is now advertised for $1.85 million.

Steven Witkoff, co-developer of the project, didn’t return calls for comment.

No Magician

“That area was less about infrastructure and was more like, ‘Don’t you want to live in this cool building because it has a cool name?’” said Kathy Braddock, a partner at real- estate consultant Braddock & Purcell.

At 15 Broad St., in a building known as Downtown by Philippe Starck, Prudential Douglas Elliman Real Estate broker and managing director Jacky Teplitzky gave up a listing after deciding she couldn’t sell the apartment.

“I’m good at what I do, but I’m not a magician,” Teplitzky said in an interview. “There were no showings, no nothing. Inventory was mounting and mounting and mounting.”

There are 45 apartments for sale in the building, according to Streeteasy.

There are 11,150 sales listings in Manhattan as of this week, according to Streeteasy, which counts only listings that are exclusive to a brokerage and that have verified addresses. The number is higher than any that Miller Samuel has counted since it began tracking inventory in 1999. About 30 percent of current listings, or 3,345, are downtown, which is defined as the area below 34th Street, Streeteasy said.

Kelly MacDonell, 34, an executive at Aeropostale Inc., and Todd Watkins, 40, considered moving from the Upper West Side to the Financial District. They abandoned plans to buy in a new building on the Upper East Side when the builder failed to finish it on time.

‘Dead’ Area?

On a Sunday tour of open houses in early April, the couple’s concerns about a “dead at night” neighborhood vanished as they passed tourists snapping photos of the New York Stock Exchange and sipping beer at the outdoor cafes of Stone Street.

They toured a two-room, 15th-floor condo at the Cocoa Exchange, on the market since October and discounted 10 percent to $439,000. They liked that the building was finished and occupied. They didn’t like the apartment’s size -- 370 square feet -- and decided not to buy.

“I’m pretty brutal in my offers, anyway,” Watkins said.

The owner took the unit off the market five days later even after accepting a bid in the “low fours,” Diamonde said.

“He was tired of people low-balling,” Diamonde said.

To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net.
Last Updated: May 7, 2009 10:37 EDT

 

I think it will take another 50% hair cut

 

If the pricing of Yankee Stadium tickets are any indicator, indeed.