Thanks for letting us know something we already knew months and months ago, I will say it now, prices are going to come down extremely hard in Manhattan, I think you could easily see an EASY 25% drop over the next 18 months in real estate prices in NYC. Manhattan real estate prices headed downward Friday October 3, 4:23 am ET By Ben Rooney, CNNMoney.com staff writer The crisis on Wall Street hasn't hit the high cost of Manhattan real estate, but the economic slowdown has curbed the number of deals in the Big Apple, according to reports out Friday. Sales figures from four major New York real estate agencies showed the average price for a Manhattan apartment rose in the third quarter over last year. At the same time, the number of apartments sold in the quarter declined sharply. "The events of the second half of September in the financial markets and Washington have not shown up in the market data for the quarter, aside from the lower level of sales activity compared to last year's record levels," said Jonathan Miller, president of New York real estate firm Miller Samuel. The average price of a Manhattan apartment ranged from $1.4 million to $1.48 million in the third quarter of 2008, according to separate reports released Friday by Brown Harris Stevens, the Corcoran Group, Halstead Property and Prudential Douglas Elliman. That represents an increase of anywhere between 8% and 12% over average apartment prices in the third quarter of 2007. But the rise in third quarter sale prices was skewed by a large number of deals in new luxury buildings, which went into contract as much as a year or two ago, before economic conditions deteriorated, but only closed recently, according to Corcoran Group CEO Pamela Liebman. "The average sales price is going to trend down," Liebman said. After soaring to unprecedented heights in 2007, "we're going to get back to a more normal range," she added. Dwindling deals Already the number of properties sold during the quarter saw a steep decline from the record highs hit in the third quarter of last year. Corcoran sold fewer than 3,000 properties last quarter, down 45% from the nearly 5,500 properties the agency sold in the third quarter of 2007. At the same time, the number of properties on the market is increasing. Listing inventory rose 34% during the third quarter, according to Miller's research. "Clearly, inventory is moving higher as sales activity has fallen," said Miller, who attributed the slowdown at least in part to the fact that mortgages have become more expensive and harder to get. And economic turmoil in Europe has crimped the flow of overseas buyers to the city. Miller estimates that foreign buyers made up one-third of all purchases in new developments in New York last year. While the labor market in New York has remained relatively stable, the fallout from the crisis on Wall Street, and the corresponding rise in unemployment in the financial sector, will probably further undermine the city's real estate market. "We're going into an uncertain economic period with volume at low levels and a low likelihood of new development," Miller said. Miller said the direction of the real estate market could hinge on Washington's proposed financial intervention, which is currently being debated in Congress and the outcome of this year's presidential election. One of the main goals of the bailout plan is to free up the frozen credit markets, which have been a major drag on economic activity - particularly in the housing market. "The question of housing is almost moot unless you get a handle on where credit is going," Miller said.
Well I don't know where the bottom is.. or will be.. but the ave price per square foot in my building was approx 1250 in Jan. Right now most of the apts are listed at 1050 sq/ft... and no takers. I think buyers are balking at anything over 1000 sq/ft.. and extremely picky about quality of the views, kitchens, etc. There is just a ton of inventory here on the upper west side
A lot! I'd bet on more like 30-40% MINIMUM, outside chance for 50%+ 3-4 years out. No local market is immune from this national problem. Wrong! The buyers are drying up and in any market, even a good one, there are people that lose their jobs, get relocated, pass away, you name it, and HAVE to sell and/or get foreclosed. Just as in a good market bids keep rising as they compete with each other to buy, in a bad market offers keep going lower as the more desperate are willing to accept less and less, thus moving prices down as a whole. The banks are willing to accept 40% of their owed money on any they take back on foreclosure that sit unsold for more than three months, that in itself creams prices. NY prices will come down, wish I could have shorted them when they were on TV three months ago talking about how they were 'immune' to the downturn. 'Immune' no, 'in denial' yes. And this bailout is going to do nothing to stop the slide in prices. Welcome to the biggest financial mess of our lifetimes, and this is the beginning of it, not the end.
I don't think the job losses are nearly as important as the pay scale getting whacked overnight. Many, many friends who are either associates or vp's who are extremely happy to forgo 70-80% of their compensation for the next few years just so they can keep their jobs. And if you feel like you deserve a promotion, it will be in title only. It wasn't that long ago when a promotion could mean a 50-100% jump in total compensation.. Now we are talking about 10%. Jersey never looked so good if you are in your 30's just starting a family.
They actually had the CEO of a Manhattan real estate company on TV *today* who said everything is great, we are immune, and that prices were actually rising.
Do you have his/her name? I would love to contact one of their brokers to get me out whole. (I am a bit bitter cause i bought my 1 br apt at roughly 1200 sq/foot about 5 months ago)
The same Trump who was in bankruptcy court in 1991 during the last real estate downturn? Sounds like he did not learn his lesson the last time, clearly much of the country also did not.