A review of the 2nd Quarter 2011 New York Real Estate Market reports put out by different residential firms including the June 2011 CORE Real Time Report reveals that the 2nd Quarter of 2011 showed a continued improvement in market conditions. Average prices remained stable in the major market segments (1-2Bedrooms) while declining slightly for studios and showing a slight drop in the super-high end. That may in part be due to the one-time sale at the Plaza for a $48 Million apartment which closed in the 1st quarter and would have drawn the average up above normal for that quarter.
Resales remain the most significant sales driver at the moment, however New Development sales are increasing as a percentage of all sales over the 1st Quarter. With much talk about shadow inventory in prior years in 2011 developers re-introduced mid-level and luxury product back onto the market. Sales activity on several projects indicate buyers have made the move back to purchasing new developments. The completed nature of these buildings provide today’s buyers with greater confidence in what they are buying.
The big story in New York residential new development is the coming to market in the last several months of large pre-war rental apartment buildings on the Upper East Side. As a result of financing restrictions on building new product, developers have started eyeing these luxury level pre-war buildings as possible conversions. With Harry Macklowe purchasing one building at 150 East 72nd Street for $70 Million in June, expect more to come.
While closed sales showed a slight decline in average prices in the luxury market, CORE reported a 28% jump in average price in June vs. May for super high-end 5-6 Bedroom units. The buzz in the luxury segment is that buyers are making their move.
The 1-2 bedroom market appears to be strengthening as well, while CORE did note in June that contracts signed for 3-4 Bedrooms that the average price for declined about 7% from the prior month. It is important to note that average price fluctuations at this level may also be related to increases or decreases in the average size of units sold for the period.
Overall, the Downtown Market has showed significant activity over prior years, and in comparison to 2009, when Tribeca properties languished and prices slid, 2011 has been the come-back year for Tribeca.
As we head into summer a more traditional cycle of activity (slowing slightly due to New Yorkers heading for the beach or summer vacations) may be expected to occur with the post-Labor Day uptick in late September of both activity and inventory. Based on what I’m observing in terms of properties going to contract fairly rapidly Downtown well into the beginning of July, my read is that 2011 will continue to be a more stable year and possibly a much more robust year in Manhattan real estate than the last three.
If you have any questions about the Manhattan Market, email me at Tsargent@corenyc.com – Tony Sargent