IE 11 is not supported. For an optimal experience visit our site on another browser.

Manhattan apartment market’s quick rebound

Blink. What housing downturn?
/ Source: The Associated Press

Blink. What housing downturn?

Sales of apartments and co-op units in Manhattan soared between 46 and 69 percent from the second to the third quarter, according to a handful of reports Friday.

Though sales are still one quarter below last year, the speed of the turnaround was surprising. A year ago, the collapse of Lehman Brothers and its shockwaves through the financial markets sent Manhattan's real estate market into a tailspin.

The median price in the July-September period slipped 2 percent from the second quarter, and was down between 8 and 18 percent from last year to a range of $760,000 to $850,000. But Prudential Douglas Elliman reported an almost 2 percent quarterly increase in prices.

"This is all good news, but it doesn't suggest we're at the bottom" for prices, said Jonathan Miller, president and chief executive of real estate appraisal and consulting firm Miller Samuel Inc., which analyzed the numbers for Prudential.

New York City's real estate market reflects broad national housing trends. The number of signed sales contracts rose for the seventh month in a row in August, the National Association of Realtors said Thursday. And home prices nationwide edged up 1.2 percent from June to July, according to the Case-Shiller index of 20 cities.

The forces driving sales in New York are similar — lower prices and mortgage rates, better consumer confidence and a tax credit of up to $8,000 for first-time homebuyers.

Nervous buyers sat out the first six months of the year, worried about the economy, said Pamela Liebman, CEO of real estate firm The Corcoran Group.

"As soon as values fell enough, it drove buyers back in with renewed confidence," she said. The stock market's rally from its lows in March also made New York buyers feel wealthier, she said.

However, there are concerns that the Nov. 30 expiration of the federal tax credit for first-time homebuyers of up to $8,000 will dampen buyer demand. More than a dozen bills have been introduced in Congress to extend the credit, but it's unclear if lawmakers want to continue to subsidize the market.

In addition, mortgage rates for loans above $729,750, so-called jumbo loans, remain relatively expensive at 6.11 percent for a 30-year mortgage. The city's unemployment topped 10 percent in August, the highest level since May 1993. And developers are ready to put up to 6,000 condos up for sale.

Already, properties are sitting on the sales block longer than in the second quarter.

Nevertheless, the number of unsold apartments in New York has fallen from its April highs and price cuts were harder to come by this quarter compared to the previous one, according to real estate listing web site Sellers also got 95 percent of their asking price, versus about 93 percent in the second quarter, according to real estate firms Brown Harris Stevens and Halstead Property.

Deb Shapiro, 39, benefited on both ends of the housing market. The book publishing executive received her full asking price of $300,000 on a studio that's a block and a half from Central Park. Shapiro then turned around and bought a one-bedroom for $400,000 in the same neighborhood. She completed both deals last week.

"The market finally got to a place where I could sell my apartment and buy another, bigger place," said Shapiro, who owned her studio for seven years. "I feel like it's palatial compared to where I used to live."

The reports from The Corcoran Group, Prudential Douglas Elliman, Halstead Property, Brown Harris Stevens and analyzed between 2,230 and 3,300 sales in the third quarter.