A new report is out on the Manhattan real estate market, and it offers some of the best available data on what is currently going on during this time of flux. The Wells Fargo 2009 Residential Market Update came out last week and is full of some fascinating figures.
First, the top line data: Average home prices in Manhattan have fallen 13% from this time last year to an average of $1,502,000. Much of this drop was a fall-off in the highest of the high-end market, with a massive 87% decline in the number of closes for apartments $10 million and up from the 1Q of 2008.
Similarly, while the first quarter of 2008 saw eight sales of New York apartments that were valued at $20 million or over, the first quarter of 2009 saw just one such transaction.
Much can be said about this drop off in the super high-end market. Perhaps the most critical point is that it should not be viewed as typical of the high-end market in general. While it has taken a hit like the rest of the New York apartment market, properties below $10 million in value have not seen numbers as severe as the 87% drop in sales activity for the $10 million and up the market.
The median value figure, of course, is not so influenced by the super-luxury market. So, it showed a modest increase to $907,500, up about six percent from last year’s numbers.
In all, though, there were still 58% fewer transactions during the first quarter of 2009 than 1Q 2008.
For those interested in the co-op market, the time is certainly now to begin looking for bargains. The average sales price of studios last year was about $414,000. In the first quarter of 2009, it was just $368,057. Similarly, for one bedroom, the average sales price fell more than $80,000. Two and 3+ bedroom units saw truly huge declines in price.
The story was different for condos, however, which saw a jump in average sales prices for studio and one bedroom, and smaller – though still substantial – declines for two and three bedroom New York apartments.
On the whole, the new report suggests that the market has finally begun moving quickly to react to the recession. Gone are the days of sellers holding out with high prices that no one is interested in – at least, for the most part. The change in prices show a healthy market reaching a new equilibrium: While prices may continue to decline, the free fall period is now over, and prices will likely stabilize by the end of the year.