Sitting down? Good. The Federal Reserve has a bit of news: Since mid-summer, the prices of Manhattan co-ops and condos have fallen by 15 to 20 percent. That chewy morsel was included in the Fed's "beige book" report released earlier this month, and relayed with what reads like perverse glee ("The most rosy-eyed brokers said it couldn't happen here...") by The Real Deal. The Fed's report looks at market conditions in various cities eight times a year, and concludes, "Both residential and commercial real estate markets have softened substantially since the last report, most notably in Manhattan." Indeed, we would call 20% a notable drop, even as anecdotal evidence has suggested a fairly big tumble. The data, which was provided by Jonathan Miller (is there a market report that JMillz doesn't have a hand in?), is based on contract prices, which will not be recorded until after the sales close. So consider this an appetizer for the market reports of two quarters from now.
Miller adds that sales volume through the first three quarters of 2008 is off 28% from last year, and TRD adds some more ingredients to this spicy mixture: "Prices of resales, as opposed to new development, which had shown some resistance to price dips, now also seem to be slipping, brokers added." Panic in the streets! Not quite. Some aren't buying into all this bad news:
Not all brokers are convinced that sales prices have slipped so far. Some also say that the market may have bottomed out in late November, as open-house attendance seems to have crept up since then, in historically quiet December. And although end-of-year bonuses for Wall Street workers, who make up a quarter of most brokers' clients, could be off as much as 50 percent this year, they will still be handed out, leading to some hope for January.
At what point does hope become denial? Probably when brokers say the exact same things, but while wearing cardboard boxes. Anybody seen Dolly Lenz's wardrobe lately?
· Manhattan home prices down around 20% [Real Deal]