Manhattan Residential Real Estate Market Snapshot

I apologize for the light postings lately but business and life in general have kept me away from the blog.  As my friend Peter Comitini says, "I’m a real estate broker who blogs, not a blogger who sells real estate."  That said, the market is indeed keeping me busy and on my toes as a great deal more effort is going into each and every transaction these days. 

Here is an anecdotal snapshot (activity all over the map) of what I see going on right now in the Manhattan Residential Real Estate market:

  • Contract finally signed over the asking price after 5 Highest, Best and Final Offers
  • Some buyers are lowering budgets based on interest rates and tighter lending requirements while others continue their search and raise budgets.
  • Many properties are being snapped up after several months on the market as soon as price is adjusted appropriately for current buying pool (i.e. Property on market for 4 months overpriced at $1.15M sells immediately after price adjustment to $999K)
  • Mortgage contingencies are much more common in deals under $2M.
  • Multiple offers and contract out over the asking price for a West Village 2BR (inventory in each area of city still low and sometimes creating bidding frenzies)
  • Other properties sit on the market "patiently" waiting for the "right" buyer to walk in.
  • "Creative" offers being submitted by unqualified buyers (i.e. $5000 deposit on a $2M home contingent on 90% financing and the sale of another home…good luck)  NEWS ALERT!!!!…we’re not in a market that will generally entertain such an offer unless a seller is desperate and there just aren’t too many of those.
  • Inventory is opening up a bit in the sub $1M market.
  • Buyers are patient but eager to buy while interest rates are low.
  • Anxiety has calmed a bit as many see Wall Street bleeding near an end.
  • The ultra lux inventory remains tight as people wait for their perfect home to hit the market.

That’s about it.  Again, this is what I see in my business.  Make of it what you will but there is no doubt that we are in a much different market than we were this same time last year.  In some ways it feels more "healthy" but I would be lying if I didn’t say that I preferred the deal flow last year.  Things do seem to be picking up though which is in large part why I haven’t been blogging as frequently.

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10 Responses to Manhattan Residential Real Estate Market Snapshot

  1. avatar anon says:

    Wall street bleeding is NOT near an end! For instance, layoffs loom at Morgan Stanley, JPMorgan and Lehman (http://www.cnbc.com/id/24468578).

  2. Again, my comments are anecdotal and my friends and family who hold senior positions or own their own firms are sensing that the major bleeding is near an end. I’m not suggesting for a moment that there won’t be more layoffs but the consensus in my circle is that recovery is near.

  3. avatar Eddie Wilson says:

    Yes, why doubt the accuracy of market movements coming from a BROKER.
    That you even had to ask the question about slant…

  4. Thanks for stopping by again Eddie. I’ve missed you.

  5. avatar Preview says:

    If a broker is saying that there is a bit of softening in the market, then the rest of us can take that to mean that things are actually much worse.

  6. avatar DavidPreview says:

    Re: your post… LOL!!!!

  7. Funny how popular I have been in the past with guys just like Eddie and David when I was discussing rising inventory and softening prices. I have never “slanted” what I see in my business or the industry on TrueGotham and I never will. Those who have read my posts for the past 2 years know that.
    This post is a snapshot of what is going on in my personal real estate business. Believe all the doom and gloom you want but I’m busy. That said, I have stated many times over the past 2 years that I believed prices would soften (I was wrong for the greater part of that time) and that the industry was in for some major change. I have also indicated that the amount of work that goes into each transaction these days is exponentially greater than the past decade but not nearly as much as when I began in the industry in 1992.
    As in this case, I post specifically what is going on in my business and what I’m hearing from my circle of family and friends. No more, no less…just the truth. And as I said in the post, make of it what you will but if you’re buying or selling a home in Manhattan right now you should expect any number of outcomes…it’s not a cut and dry market…AT ALL.

  8. avatar Steve says:

    Doug,
    I appreciate the market snapshot. I also realize that your prospective is most likely being experienced by other highly productive Manhattan brokers. The stock market is saying the same thing about the bleeding ending. Eddie and the other guy are just priced out buyers.

  9. avatar anon says:

    Regarding Wall Street bleeding:
    I think you have to consider it from a couple of perspectives. From a market perspective, the worst of the real estate and credit contraction appears to have been fully discounted by Wall Street. The shares of major investment banks like Goldman and Lehman are materially higher than their lows (LEH up 100% from bottom on 3/17; GS up 35% from its bottom on the same day), and the commercial banks like Citigroup (50% and JP Morgan (30%) are also far ahead of mid march bottoms. The banks have taken their “hits” and the market is moving ahead. As the credit market thaws (to which the Fed applied a lot of antifreeze), and the banks restore their profitability (which is a lot easier with a positive curve), bankers get to make money again as transaction flow picks up.
    With that in mind, Wall Street and banks generally will employ fewer people this year than last.
    So a few forces at work…

  10. avatar Craig says:

    I can tell you that in our building we have recently gotten the 2 highest offers ever for apartments. That being said, both buyers had to go through a gauntlet to get approved by the board that was more than in the past. They both had to put 2 full years of maintenance in escrow and one of them had to go back to the drawing board with the mortgage broker and reapply with their parents attached to their mortgage…and these were people in their 40’s, not kids buying their first place. It does appear that a good apartment, in a good neighborhood, priced appropriately will sell for close to the asking price and that overpriced apartments or apartments in so-so neighborhoods or apartments in so-so shape are going to sit while people consider their options.
    My experience as a recruiter also tells me that some firms are not going to be hiring many people this year at all, but somefirms are definitely increasing headcount. It is not just the financial services sector that is affected. Their are pockets that are doing well and other pockets that are really struggling. At the end of the day, I think the rest of ’08 will be a slog and things will begin to pick-up closer to the midpoint of ’09. As firms put a couple of positive quarters behind them they will be more open to spending some cash. I would also anticipate bonuses for ’08 to be smaller than bonuses for ’07, as at least 1/2 of ’07 was extremely productive for most firms while ’08 has been rocky at best.
    Firms will start to hire more rapidly once they see a little more light at the end of the tunnel, but not any sooner than they have to. Remember, the quickest way to free up cash or to stave off losses is to eliminate staff. What I am seeing is not anything like 2001-2003, however, when people across the board were downsizing and there was little hope of any sort of rebound for quite some time. That is good news for the long term, but I think that we will still have to wade through a murkier ’08 (and into ’09) before we start to really feel things turn more positive in a meaningful way.
    Just my thoughts.

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