The end of 2009 showed some positive signs for the industry, according to fourth-quarter reports published today by several different brokerages: while prices continued slipping, the rate of decline slowed, activity rose sharply, and inventory diminished. Some industry analysts are expecting prices in Manhattan to rise in early 2010–but another dip later in the year is also likely many says. We’re still an average 25 percent down from the peak, but numbers released by Prudential Douglas Elliman, The Corcoran Group and Halstead Property/Brown Harris Stevens show average sales price in the region of $1.3 million in the fourth quarter, down 9 to 19 percent from fourth quarter 2008. Elliman and Corcoran showed declines of 2 and 5 percent, respectively, from the third quarter.
The Real Deal also found that price drops in sales have decreased by 29 percent from the third quarter, and are 14.4 percent lower than in the fourth quarter of 2008. There was even an increase in sales happening above original asking price–20 percent more often than in the third quarter, and close to 50 percent more than in the fourth quarter of 2008. Meanwhile, activity is up across the board 9 to 10 percent compared to fourth quarter 2008.
Elliman had 2,282 closings, or 11 percent more than in the third quarter. Halstead/BHS did 2,519, and Corcoran, meanwhile, reported a whopping 48-percent increase over the last quarter of 2009 (attributing to a different methodology in an interview with The Real Deal). Inventory is slowly being eaten up: Elliman had 6,851 listings in the fourth quarter, or 25 percent down from the third quarter.
Most of the apartments finding buyers are smaller–65.2 percent of fourth-quarter closings were under $1 million, according to The Real Deal–despite figures showing that larger apartments have fallen more steeply in price compared to 2008. This can be attributed in part to the demand surge among buyers availing themselves of the first-time buyer credit, usually seeking smaller starter homes, as well as the tightening in the mortgage market.
What happens in 2010? Unemployment is expected to climb, after all, credit is still tight, the first-time homebuyer tax credit is due to expire in April, and a weak dollar will most likely prompt the Fed to raise the interest rates at some point. However, here at Elika, we’re finding that foreign buyers, spurred on by the same weak dollar, are stepping up to the plate, and buyers willing to come in with cash are often able to secure better deals, quicker. With uncertain stock, commodities and currencies markets, New York real estate may attract the more cautious investor to come in and scoop up well-priced apartments.