Full Impact of Wall Street Crisis Yet to Play Out in NYC For-Sale Market

By Anuradha Kher, Online News EditorNew York–The average Manhattan apartment price of $1,449,621 was up 1 percent from a year ago, but down 2 percent from the previous quarter, according to the fourth quarter market report released today by Brown Harris Stevens. While the number of closings decreased by 9 percent compared to the same period a year ago, both the average and median prices were higher than this time last year. The Fourth Quarter Market Report by Halstead Property also found the same.“It’s important to note 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,” Greg Heym, chief economist for Terra Holdings, which is the parent company of both Brown Harris Stevens and Halstead Property, tells MHN. “Forty two percent of the closings were of new developments and contracts that closed in 2007, before all the disruptions Wall Street took place.” Heym says this is the reason it is not surprising that the fourth quarter reports on the Manhattan market haven’t found major price declines. “The full impact is yet to take place.”The market share of new developments continued to increase, making up 42 percent of all apartment sales and 72 percent of condominium sales during the fourth quarter of 2008. These new development units posted an average price of $1,717,115, 3 percent higher than the prior quarter. The average condominium price overall was $1,713,124, down 7 percent. “However, if 15 Central Park West and The Plaza are factored out, the adjusted figure would actually be up 21 percent from the fourth quarter of 2007,” says Heym. The average price for cooperatives during the fourth quarter of 2008 was $1,103,952, up 3% from the same period a year ago.According to the Halstead Property report, the Eastside was the only location in the city to post an increase in new listings, including a 46 percent increase in four-bedroom and larger apartments. New listings on the Westside, Downtown and Northern Manhattan mostly showed declines in nearly all size categories. With only a third of Wall Street’s layoffs having taken place, Heym says it’s difficult to predict what is to come. “In the coming year, we can expect a continuing softness, but it is difficult to make any specific projections. Obviously, price declines are not unexpected. But we are not the stock market, prices come down gradually,” says Heym. Hall. F. Willkie, president of Brown Harris Stevens, says, “New York City’s market fundamentals are stronger than most. Those key fundamentals include: supply and demand; the small percentage of residential properties owned by investors; and the tremendous amount of equity thanks to the dominance of cooperatives.”