When our Annual Market Report comes out, generally there’s some fanfare.
This year’s report, however, also covers 188,000 sales back to 2003.
So, for anyone looking that far back for trends, this is a deep dive into the all-you-can-eat data dump.
For those less inclined to read the 30-page monster, the 14-page 4th quarter report is a bit more reserved, showing 7% year over year increases in median pricing.
New development has skewed the numbers significantly.
Closings well above the $20mm mark end up pushing the market average well above where it would
be – if a very high end building is closing in a given year or quarter, all the averages get thrown off.
Pulling new development out of the mix, the 4th quarter shows modest improvement at the sub-$3mm portion of the marketplace.
Sales volume, from my perch, appears to be rising, due to price adjustments at the $3-10mm levels; this will help us see more deals get done.
However, without these price adjustments, previously overpriced units, along with newly listed properties that hit the market too high, will sit until they get realistic.
In the sub-$3mm area, activity could hardly be higher, with swarms of buyers entering bidding wars for many 1- and 2-bedroom apartments.
While we sense slightly more sobriety in the market otherwise, new development certainly has slowed down.
These new development projects almost entirely are at the highest end of the spectrum, and the urgency has faded meaningfully.
Developers are shelving some projects, through sales or changes of use.
A recent sale of 550 Madison is a very good example.
A Class A office building will remain as such, with plans for a “6-star Hotel” and $150mm penthouse hitting the development dustbin.
Other projects, such as the Park Lane Hotel, have had hiccups, but may move ahead regardless of market conditions.
I’ll cover more of this in a post on 57th Street.
In all, as rates stay extraordinarily low, buyers looking to buy-and-hold for 5-10 years still see significant value in Manhattan real estate.
I talk about Brooklyn in another post…
I’ll end only by saying that I continue to see mortgage/lending products emerge that are eerily reminiscent of the 2006-2008 times – 90% loans, loans with far less verification. These concern me deeply, but in a market where at least 50% of all sales still are cooperative, the impact in New York always
will be muted.