Manhattan Market Information
The 1Q 2007 Prudential Douglas Elliman Manhattan Market Overview was released today. The formal report should be available for download at the end of the day so you’ll have all the numbers. I’ll send a followup email with a link when the report is online. (And I will make it available to all of my readers immediately upon receipt)
The Manhattan residential real estate market entered 2007 with a surge in the number of sales, declining inventory, rising prices and shorter marketing times. Record bonus income and stabilizing mortgage rates helped foster the significant increase in demand this quarter. The rise in demand has helped reduce inventory, shorten marketing times and reduce listing discounts.
– Number of sales up (73.3%) from same period last year, a record (but some of the increases due to coops added to public record) means buyers are returning to the market.
– Listing inventory dropped (14.2%) from the same period last year and and remains below levels seen at the end of 2006. The increased demand is helping the market absorb the inventory that is entering the market.
– Listing Discount (2.6%) fell from the 2.8% discount seen this time last year. Sellers are remaining realistic about setting list prices for the moment.
– Median sales price up (1.2%) to $835,000 as compared to the same period last year. Prices are generally stable with some price spikes at the upper end.
– Average sales price down (0.8%) to $1,290,391 as compared to the same period last year. Market share gains of studios pulled down the overall average sales price.
The Manhattan market is in a position for a positive 2007 as compared to the national market
– Bonus money is at record levels for the second consecutive year, with possibly several years of strong earnings remaining for Wall Street
– No significant short term investor activity (flippers); market is driven by owner occupants and second home purchasers.
– Weaker dollar makes investment from abroad less expensive
– The city is well-run, has a surplus with tourism at record levels with local unemployment levels are low
– Commercial office rents are rising rapidly demonstrating demand for employment and residential rental market continues to grow.
The subprime mortgage market upheaval
While it is certainly something to be concerned about, we don’t expect it to have much of a direct impact in this market. However, it could have a pronounced effect on the national housing market for a variety of reasons. The area of concern for us will be likely limited to credit tightening, which is already happening. Mortgage underwriters are already looking more closely at marginal deals which could temper the number of sales for the next few quarters.
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