Given all the whispers, rumors, half-truths and concrete evidence supporting the theory that Manhattan real estate is in something of a tailspin, most casual observers will be shocked to see that the major brokerages' fourth-quarter market reports, out today, basically show that prices are holding fairly steady. The average price of a Manhattan apartment is still around $1.5 million (more if you take Corcoran's word for it), which is what the third-quarter sales reports told us. How is that possible? Well, as the analysts have said, the fourth-quarter numbers represent closed contracts that were negotiated during the boom times, and we'll start to see big drops starting with the Q1 '09 reports. The sharks, however, are hungry for blood right now, and the brokerages know it.
In his report-accompanying statement, Brown Harris Stevens President Hall Wilkie said, "It's important to acknowledge that figures from the fourth quarter of 2008 largely reflect closings of sales that went to contract months earlier, and are therefore indicative of the market at that time." Miller Samuel appraiser Jonathan Miller, who as usual prepared the Prudential Douglas Elliman report (and we'll have more fun with JMillz in a bit), echoed that sentiment and repeated the key points from his earth-shattering revelations of a few weeks ago?that contract activity during Q4 (not closed sales negotiated 12-18 months ago) shows a 20% drop in prices from the summer, and the number of deals is off perhaps up to 75% from a year ago.
Look deeper at the reported Q4 numbers and the signs of wear and tear begin to show. The number of sales is plunging, and a surge in closings in new developments (Halstead/Brown Harris Stevens put the market share of new developments at 72% of condo sales and 42% of all apartment sales) helped inflate the numbers. Re-sales are already losing their footing. Miller's Elliman report has the median price of re-sales off 3.6% from last year and 10% from last quarter, while Corcoran has the median off 6% from the prior year quarter. And now, the greatest hits:
Elliman: $1,485,102 (+.3% over last quarter, +3.1% over last year)
Halstead/BHS: $1,449,621 (-1.6% from last quarter, +1.3% over last year)
Corcoran: $1,649,000 (+13.3% over last quarter, +10% over last year)
Elliman: $900,000 (-3% from last quarter, +5.9% over last year)
Halstead/BHS: $895,000 (-1.7% from last quarter, up 8% over last year)
Corcoran: $937,000 (+3% over last quarter, -3.9% from last year)
Price per square foot:
Elliman: $1,183 (-.8% from last quarter, +.3% over last year)
Halstead/BHS: $1,162 (-1.9% from last quarter, -1.6% over last year)
Corcoran: $1,211 (+2.6 over last quarter, +5% over last year)
Number of sales:
Elliman: 2,282 (-14% from last quarter, -9.4% from last year)
Halstead/BHS: 2,301 (-23% from last quarter, -9% from last year)
Corcoran: "Sales are down 40-50% versus Third Quarter 2008 (based on a reasonable estimate of Fourth Quarter sales accounting for the typical lag time between a closing and its reporting in the public record). Sales are also down sharply versus Fourth Quarter 2007, making this the fifth straight quarter of year-over-year sales declines."
Jonathan Miller's scary inventory data:
"Listing inventory increased 39.3% to 9,081 units from the prior year quarter total of 6,518 units." That's up 3.1% from last quarter. Absorb! Absorb, we say!
The brokerages should have their reports uploaded today. Here's where to find them:
· Elliman Market Reports [Elliman]
· Corcoran Guides & Reports [Corcoran]
· Brown Harris Stevens Market Reports [BHS]
· Halstead Property Market Reports [Halstead]