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Friday, February 19, 2010
Friday, February 12, 2010
Gov. Paterson wants to impose mortgage tax on Co-ops
Governor Paterson wants to impose the NY state mortgage recording tax on Coops. Coops have been exempt from the state mortgage tax because coops are not considered "Real Property" they have been considered personal property. Prior to 1989 coops were exempt from transfer taxes. Until a few years ago coop sales were private and not in the public records. Financing a coop is technically not a mortgage but a coop loan. Coop owners purchase shares in a corporation that owns the building. Coop shareholders have a proprietary lease. Current mortgage tax on condos and houses are between 2% and 2.175% depending on the mortgage amount. Below $500,000 or above $500,000. All purchases above $1 million are also subject to a 1% mansion tax. If this new tax is approved most of the revenue will go to NYC. It may have an adverse effect on the value and sale prices of coops.
If you've been thinking about buying a coop and need financing, Now Is the Time before this new mortgage recording tax for coops is implemented. Contact Alfred Real Estate Today.
News Update
Freddie Mac: Mortgage interest rates fall below 5 percent for third week this year
Thirty-year mortgage interest rates fell below 5 percent for the third week this year, according to a Freddie Mac survey released yesterday. For the week that ended Feb. 11, the 30-year fixed-rate mortgage had an average 4.97 percent rate, down from 5.01 percent for the week earlier and from 5.16 percent for the same week last year. The 15-year fixed-rate mortgage was down to 4.34 percent from 4.40 percent during the week-ago period and 4.81 percent in the year-ago period. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.19 percent, down from 4.27 percent last week, while their one-year counterparts were up to 4.33 percent from 4.22 percent one week ago. The drop in interest rates on fixed-rate mortgages "helps a number of homeowners to refinance their existing housing debt," said Frank Nothaft, vice president and chief economist at Freddie Mac, noting that the latest survey from the Mortgage Bankers Association found that more than two-thirds of mortgage applications have been for refinancing since the start of 2010. "In mid-June of last year, for example, 30-year fixed-mortgage rates topped nearly 5.6 percent. Currently, the monthly payments would be almost $77 per month lower on a $200,000 loan balance."
Existing home sales rise nationwide
Existing home sales rose in 48 states and the District of Columbia during the fourth quarter of 2009, according to a National Association of Realtors survey released today, with 32 states seeing increases in the double digits from the third quarter. Forty-nine states and D.C. saw sales rise year-over-year from their levels in the fourth quarter of 2009. Nationwide, total sales rose to a seasonally adjusted rate of 6.03 million single-family and condo units, thirty-two percent of which were distressed property units. The median single-family price was $172,900, a 4.1 percent drop from the fourth quarter of 2008. The nationwide number represents a 13.9 percent increase from the third-quarter 2009 figure of 5.29 million and a 27.2 percent rise from the 4.74 million sales registered for the year-ago period. "The surge in home sales was driven by buyers responding strongly to the tax credit combined with record low mortgage interest rates," said Lawrence Yun, NAR's chief economist, in a statement.
Thirty-year mortgage interest rates fell below 5 percent for the third week this year, according to a Freddie Mac survey released yesterday. For the week that ended Feb. 11, the 30-year fixed-rate mortgage had an average 4.97 percent rate, down from 5.01 percent for the week earlier and from 5.16 percent for the same week last year. The 15-year fixed-rate mortgage was down to 4.34 percent from 4.40 percent during the week-ago period and 4.81 percent in the year-ago period. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.19 percent, down from 4.27 percent last week, while their one-year counterparts were up to 4.33 percent from 4.22 percent one week ago. The drop in interest rates on fixed-rate mortgages "helps a number of homeowners to refinance their existing housing debt," said Frank Nothaft, vice president and chief economist at Freddie Mac, noting that the latest survey from the Mortgage Bankers Association found that more than two-thirds of mortgage applications have been for refinancing since the start of 2010. "In mid-June of last year, for example, 30-year fixed-mortgage rates topped nearly 5.6 percent. Currently, the monthly payments would be almost $77 per month lower on a $200,000 loan balance."
Existing home sales rise nationwide
Existing home sales rose in 48 states and the District of Columbia during the fourth quarter of 2009, according to a National Association of Realtors survey released today, with 32 states seeing increases in the double digits from the third quarter. Forty-nine states and D.C. saw sales rise year-over-year from their levels in the fourth quarter of 2009. Nationwide, total sales rose to a seasonally adjusted rate of 6.03 million single-family and condo units, thirty-two percent of which were distressed property units. The median single-family price was $172,900, a 4.1 percent drop from the fourth quarter of 2008. The nationwide number represents a 13.9 percent increase from the third-quarter 2009 figure of 5.29 million and a 27.2 percent rise from the 4.74 million sales registered for the year-ago period. "The surge in home sales was driven by buyers responding strongly to the tax credit combined with record low mortgage interest rates," said Lawrence Yun, NAR's chief economist, in a statement.
Monday, February 8, 2010
Manhattan’s Unique Style Lures Overseas Buyers
New York is one of the most desirable cities to visit on earth. From partying and posing, to shopping and star searching, there are unlimited factors of the city’s appeal. But does the property market have equal dazzle?
The answer is absolutely. Britons buying in the Big Apple look to Tribeca (the Triangle Below Canal Street), where artists discovered loft living in the Sixties, and SoHo (South of Houston Street), where the landscape has a European feel with cast-iron balconies and low-rise blocks built to house Italian immigrants arriving in the 19th century.
There is also Chelsea, a popular artistic and gay quarter, with loft buildings and brownstone family houses, and the legendary bohemian area of Greenwich Village. Prime Manhattan real estate close to Central Park attracts the wealthiest of buyers. And the prices are reputedly the lowest they will go.
"Prices are still down from a year ago, but they're improving. Unemployment has risen, but New York's labor market has been more resilient than the national average," says Walter Molony, of the National Association of Realtors, an umbrella body representing estate agents in America.
He forecasts the city's prices are likely to hold up - and possibly rise in the near future - because the number of new homes being built in NYC is a whopping 88.5 per cent below the long-term average.
Developers feel the same. In an interview for financial TV service Bloomberg, Barry Sternlicht - head of the Starwood firm, which specializes in building new apartments - says homes in his firm's new scheme at Battery Park are "selling like hot cakes".
Unlike many cities, where low cost wrecks are a thing of the past, New York has plenty of what Americans call 'fixer uppers' - old former industrial properties ripe for turning into homes. The Garment District on Manhattan's West Side still has plenty of examples for those wanting a renovation project.
New York estate agents also tip Washington Heights for price growth and, just across the Hudson in New Jersey, there are good-value homes to be found in the commuter town of Hoboken - popular with many British professionals who work in Manhattan.
One of the most dense, buzzing urban centers in the world, New York consists of five boroughs - The Bronx, Brooklyn, Manhattan, Queens and Staten Island. There are about 10 million residents across the city. The wider commuter area, stretching into New Jersey, has another 12 million.
And with prices as low as they are likely to go, this might be just the time to take a hearty bite of the Big Apple.
Celebs make NYC a Home away from Home
British-born actress Kim Cattrall has a Manhattan pad - appropriate enough, given her role as Samantha in Sex And The City. Close by are the homes of Coldplay’s Chris Martin and his wife Gwyneth Paltrow, and American heiress Nancy Shevell, girlfriend of Sir Paul McCartney. Harry Potter star Daniel Radcliffe is reported to have no fewer than three New York homes - and he’s only 20.
But thousands of other Britons live in more modest New York properties - and there is a vast infrastructure to help them settle in. The most famous hang-outs for expatriates include Soho House, a private members’ club and hotel in the grungy Meatpacking district, and the Red Lion pub, a live music bar based in Bleecker Street. There is also Tea & Sympathy, a restaurant and shop in Greenwich Village. It serves a full English breakfast, roast beef at lunch time and cucumber sandwiches for tea. Devon fudge, Hob-Nobs and videos of vintage TV sitcoms are on sale in the shop, which was founded 20 years ago by Nicky Perry, from Eltham, London. Kate Moss and Rupert Everett are regulars, and Davina McCall calls it ‘my favorite place in New York’.
Contact Alfred Real Estate Today
The answer is absolutely. Britons buying in the Big Apple look to Tribeca (the Triangle Below Canal Street), where artists discovered loft living in the Sixties, and SoHo (South of Houston Street), where the landscape has a European feel with cast-iron balconies and low-rise blocks built to house Italian immigrants arriving in the 19th century.
There is also Chelsea, a popular artistic and gay quarter, with loft buildings and brownstone family houses, and the legendary bohemian area of Greenwich Village. Prime Manhattan real estate close to Central Park attracts the wealthiest of buyers. And the prices are reputedly the lowest they will go.
"Prices are still down from a year ago, but they're improving. Unemployment has risen, but New York's labor market has been more resilient than the national average," says Walter Molony, of the National Association of Realtors, an umbrella body representing estate agents in America.He forecasts the city's prices are likely to hold up - and possibly rise in the near future - because the number of new homes being built in NYC is a whopping 88.5 per cent below the long-term average.
Developers feel the same. In an interview for financial TV service Bloomberg, Barry Sternlicht - head of the Starwood firm, which specializes in building new apartments - says homes in his firm's new scheme at Battery Park are "selling like hot cakes".
Unlike many cities, where low cost wrecks are a thing of the past, New York has plenty of what Americans call 'fixer uppers' - old former industrial properties ripe for turning into homes. The Garment District on Manhattan's West Side still has plenty of examples for those wanting a renovation project.
New York estate agents also tip Washington Heights for price growth and, just across the Hudson in New Jersey, there are good-value homes to be found in the commuter town of Hoboken - popular with many British professionals who work in Manhattan.
One of the most dense, buzzing urban centers in the world, New York consists of five boroughs - The Bronx, Brooklyn, Manhattan, Queens and Staten Island. There are about 10 million residents across the city. The wider commuter area, stretching into New Jersey, has another 12 million.
And with prices as low as they are likely to go, this might be just the time to take a hearty bite of the Big Apple.
Celebs make NYC a Home away from Home
British-born actress Kim Cattrall has a Manhattan pad - appropriate enough, given her role as Samantha in Sex And The City. Close by are the homes of Coldplay’s Chris Martin and his wife Gwyneth Paltrow, and American heiress Nancy Shevell, girlfriend of Sir Paul McCartney. Harry Potter star Daniel Radcliffe is reported to have no fewer than three New York homes - and he’s only 20.
But thousands of other Britons live in more modest New York properties - and there is a vast infrastructure to help them settle in. The most famous hang-outs for expatriates include Soho House, a private members’ club and hotel in the grungy Meatpacking district, and the Red Lion pub, a live music bar based in Bleecker Street. There is also Tea & Sympathy, a restaurant and shop in Greenwich Village. It serves a full English breakfast, roast beef at lunch time and cucumber sandwiches for tea. Devon fudge, Hob-Nobs and videos of vintage TV sitcoms are on sale in the shop, which was founded 20 years ago by Nicky Perry, from Eltham, London. Kate Moss and Rupert Everett are regulars, and Davina McCall calls it ‘my favorite place in New York’.
Contact Alfred Real Estate Today
Apartment prices show annual decline for the first time in 13 years
The aughts saw more price appreciation than the 1980s or 1990s; number of sales drop for past two years.
Market reports released last week depict the spectacular rise of home prices over the past decade, but also the abrupt arrival of the real estate slump in Manhattan.
In 2009, Manhattan co-ops and condos saw year-over-year declines for the first time since 1996. The average 2009 apartment sold for $1.39 million, down 12.5 percent from the previous year. The median price dropped 11 percent to $850,000 from 2008, while the average price per square foot sank 14.2 percent to $1,073.
Other areas of the country have seen real estate activity and prices decline gradually over the past few years, but the Manhattan real estate market was still booming until the Lehman Brothers collapse in the fall of 2008. In fact, Manhattan prices set new records in 2008. That year, the average sale price of a Manhattan apartment reached a new ever high of $1.59 million, while the median was $955,000 and the price per square foot was $1,251, according to the report.
The number of sales sank 27.9 percent to 7,430 in 2009, from 10,299 in 2008 and 13,430 in 2007.
In 2009, the median sales price of a Manhattan co-op or condo surged 113 percent from $399,000 in 2000, reports say, while the average sales price climbed 96 percent from $710,778. In 2000, the average price per square foot in Manhattan was $522, about half of what it was in 2009.
The aughts saw more price appreciation than either of the two prior decades. The average sale price increased 96 percent throughout 2000s, but it grew only 26 percent in the 1990s.
One reason for the dramatic price increase was the mid-2000's construction boom of new condominiums. In 2000, co-ops represented 60 percent of the units that changed hands, but in 2009, that percentage had shrunk to 46 percent, while condos made up 54 percent. Co-ops still represent about three quarters of the total housing stock in Manhattan.
Because of the new construction, Manhattan's housing stock is more luxurious than it was a decade ago. Easy credit and speculation also helped fuel rising price in the last decade, even in the face of 9/11 and two recessions.
In addition, New York City itself was transformed during the late 1990s and 2000s as crime rates fell. Manhattan's enhanced reputation for safety has made it more desirable to foreign buyers, who in turn helped drive up real estate prices. The run-up in prices can also be attributed to the expansion of Wall Street during the 2000s.
Areas that saw the most price appreciation over the past decade were what brokers called "fringe" neighborhoods like Harlem. For example, the average sales price of a co-op or condo in Upper Manhattan (north of Central Park) in the year 2000 was $170,332, a figure that shot up 204 percent to $519,169 by 2009.
More established neighborhoods also saw prices rise, but not to the same extent. For example, the average price of an Upper East Side co-op rose 110.2 percent to $1.49 million in 2009 from $710,299 in 2000. Condo prices in the same neighborhood grew 100 percent to $2.11 million from $1.06 million in 2000.
An anomaly in the report was Battery Park City, which saw its prices quadruple as new condos were built with much larger units than had been found in the area in the past.
Meanwhile, townhouses saw a slow-but-steady appreciation over the decade, though their prices are also down from 2008.
The average sales price of Manhattan townhouse (defined as a one- to five-family home, delivered vacant) was $5.01 million, down 32 percent from a record $7.37 million in 2008 and up 51.6 percent since 2000. The median sales price was $3.4 million in 2009, down 31.2 percent from a record $4.99 million in 2008, and up 37.2 percent from 2000.
Contact Alfred Real Estate Today
Market reports released last week depict the spectacular rise of home prices over the past decade, but also the abrupt arrival of the real estate slump in Manhattan.
In 2009, Manhattan co-ops and condos saw year-over-year declines for the first time since 1996. The average 2009 apartment sold for $1.39 million, down 12.5 percent from the previous year. The median price dropped 11 percent to $850,000 from 2008, while the average price per square foot sank 14.2 percent to $1,073.
Other areas of the country have seen real estate activity and prices decline gradually over the past few years, but the Manhattan real estate market was still booming until the Lehman Brothers collapse in the fall of 2008. In fact, Manhattan prices set new records in 2008. That year, the average sale price of a Manhattan apartment reached a new ever high of $1.59 million, while the median was $955,000 and the price per square foot was $1,251, according to the report.
The number of sales sank 27.9 percent to 7,430 in 2009, from 10,299 in 2008 and 13,430 in 2007.
In 2009, the median sales price of a Manhattan co-op or condo surged 113 percent from $399,000 in 2000, reports say, while the average sales price climbed 96 percent from $710,778. In 2000, the average price per square foot in Manhattan was $522, about half of what it was in 2009.
The aughts saw more price appreciation than either of the two prior decades. The average sale price increased 96 percent throughout 2000s, but it grew only 26 percent in the 1990s.
One reason for the dramatic price increase was the mid-2000's construction boom of new condominiums. In 2000, co-ops represented 60 percent of the units that changed hands, but in 2009, that percentage had shrunk to 46 percent, while condos made up 54 percent. Co-ops still represent about three quarters of the total housing stock in Manhattan.
Because of the new construction, Manhattan's housing stock is more luxurious than it was a decade ago. Easy credit and speculation also helped fuel rising price in the last decade, even in the face of 9/11 and two recessions.
In addition, New York City itself was transformed during the late 1990s and 2000s as crime rates fell. Manhattan's enhanced reputation for safety has made it more desirable to foreign buyers, who in turn helped drive up real estate prices. The run-up in prices can also be attributed to the expansion of Wall Street during the 2000s.
Areas that saw the most price appreciation over the past decade were what brokers called "fringe" neighborhoods like Harlem. For example, the average sales price of a co-op or condo in Upper Manhattan (north of Central Park) in the year 2000 was $170,332, a figure that shot up 204 percent to $519,169 by 2009.
More established neighborhoods also saw prices rise, but not to the same extent. For example, the average price of an Upper East Side co-op rose 110.2 percent to $1.49 million in 2009 from $710,299 in 2000. Condo prices in the same neighborhood grew 100 percent to $2.11 million from $1.06 million in 2000.
An anomaly in the report was Battery Park City, which saw its prices quadruple as new condos were built with much larger units than had been found in the area in the past.
Meanwhile, townhouses saw a slow-but-steady appreciation over the decade, though their prices are also down from 2008.
The average sales price of Manhattan townhouse (defined as a one- to five-family home, delivered vacant) was $5.01 million, down 32 percent from a record $7.37 million in 2008 and up 51.6 percent since 2000. The median sales price was $3.4 million in 2009, down 31.2 percent from a record $4.99 million in 2008, and up 37.2 percent from 2000.
Contact Alfred Real Estate Today
Friday, January 29, 2010
Upper West Side Open Houses Draw Crowds
Despite the rain, cold and dreary weather open houses were mobbed this week on the Upper West Side of Manhattan. Buyers are entering the market and they are buying. One pre-war 2 bedroom condo priced at $1,399,000 had about 40 people just 15 minutes after it opened.
About 30 people were at the 2 bedroom 2 bath apartments on the third floor of a post-war full service luxury building. One 2 bedroom condo that came on the market the beginning of the week at $1,150,00 is already in contract and the second open house was canceled. Many realtors planning on taking buyers back to see popular homes for a second time are too late. There is very little inventory in the $1M to $1.4M range.
What does it mean? Is it the Wall Street bonuses? Have we bottomed? Last weeks sell off in the stock market? Is New York the last market to decline the first to recover? We haven't had many foreclosures or sub-prime mortgages. The collapse of Lehman Brothers was what caused our market to decline. Prices are still down from a year ago but there is sales activity.
It's not about tax credits in this price range. Even first-time buyers looking at $1M+ apartments tend to have higher incomes than $125,000 single or $250,000 combined. The $6000 tax credit for current home owners is capped at an $800,000 purchase.
While there are all kinds of reports and gloomy economic studies, high unemployment and a poor national economy, we have to be honest about what we see. There are a lot of people with a lot of money buying real estate in Manhattan.
Manhattan Market May be the First to Rebound
According to industry experts, New York City's real estate market will recover ahead of other areas of the country, and perhaps by the end of the year. Many believe that most of New York's overbuilt office space inventory will finally be absorbed in 2010. What's more, distressed properties will become available through deals or foreclosure sales. Furthermore, developers will have the opportunity to begin repositioning themselves as land, construction and renovation costs drop to more reasonable levels.
The Urban Land Institute warns that New York will see vacancy rates skyrocket into the mid teens, office rents plummet 40% and co-op prices drop 25% in its 2010 market forecast. But it also says "New York offers savvy investors opportunity and more affordable costs over the long term."
Experts bet that New York will recover before other areas of the country because in his view, the region didn't indulge as much in over-development as did places like Las Vegas and Miami. The high construction costs and the wherewithal needed to obtain all the necessary permits prevent many speculators from coming in and developing properties in Manhattan.
Those barriers give well-financed industry players an advantage during times of crisis like now. Since many companies resisted buying properties or starting new projects when the market was peaking between 2005 to 2008, they did not become loaded down with debt. Nor are they stuck owning properties that are now worth significantly less than they were just a few years ago.
When looking at investment opportunities, residential is the healthiest area of real estate because the need for housing is perpetual. Commercial, which will benefit when jobs return, is the next strongest area, followed by hotel, which is benefiting from strong tourism. As prices continue to drop in 2010, individuals should look for opportunities to buy property in Manhattan at a discount while they can.
Wednesday, January 20, 2010
NYC Property Taxes Will Increase July 1st
The Department of Finance released a tentative assessment for all residential and commercial properties for fiscal 2011, which begins July 1st.
While property values may have dropped, according to the city, the total market value of property in NYC, including new construction rose 0.12% to $796 billion. NYC taxes properties based on assessed value. Assessed value can rise even if market value declines.
Market values for coops and condos rose 4.04% and assessed values increased 5.09%. NYC Coops and condos are valued as if they were rental properties that generate income. Property values lag two years. Fiscal 2011 assessment is based on 2008 data. The Finance department will publish final assessment values on May 25th. The final assessment will be used to calculate property taxes for fiscal year 2011.
For more information, visit nyc.gov/finance
Contact Alfred Real Estate Today.
While property values may have dropped, according to the city, the total market value of property in NYC, including new construction rose 0.12% to $796 billion. NYC taxes properties based on assessed value. Assessed value can rise even if market value declines.
Market values for coops and condos rose 4.04% and assessed values increased 5.09%. NYC Coops and condos are valued as if they were rental properties that generate income. Property values lag two years. Fiscal 2011 assessment is based on 2008 data. The Finance department will publish final assessment values on May 25th. The final assessment will be used to calculate property taxes for fiscal year 2011.
For more information, visit nyc.gov/finance
Contact Alfred Real Estate Today.
Baby Boomers: The New Buyers
While baby boomers largely disappeared from the city's real estate market in the wake of the financial crisis, experts say this key demographic is now becoming active again. By 2030, Manhattan's population of people aged 65 and older is expected to surge nearly 60 percent as the baby boom generation ages.
Falling prices are beginning to stabilize, and many of the city's boomers are now putting their large apartments and townhouses on the market as they look to downsize to one- and two-bedroom homes. Suburban empty nesters are also reentering the market with plans to retire in the city, trading in their large, labor-intensive houses for apartments rich in services.
The preferences of these buyers and sellers have already begun to shape the market in some neighborhoods and buildings and will increasingly sculpt the next wave of real estate sales.
The term 'baby boomers' refers to anyone born between 1946 and 1964, during the explosion of more than 77 million births that followed World War II. As the oldest of this generation approaches retirement, the number of people over 65 in Manhattan is projected to rise to 295,000 by 2030, up 57.9 percent from 2000, according to city data.
Many boomers are looking to retire in urban settings, for at least part of the year, rather than decamping to warmer climates, according to Paul Bishop, the vice president of research at the National Association of Realtors, which published a 2006 study called "Baby Boomers and Real Estate."
"Boomers are looking to move back into an urban setting after years in the suburbs," said Bishop, noting that cities like New York are attractive because they offer easy access to public transportation, health care, culture and restaurants.
Heavy losses in home equity and their stock portfolios caused boomers to largely disappear from the New York City real estate market after the financial crisis of 2008.
The number of baby boomers buying and selling homes in the city will only grow in years to come, brokers said.
Contact Alfred Real Estate Today!
Friday, January 15, 2010
New York City to Receive $20 Million in Stimulus Funds
City Will Use Funds to Assist Homebuyers, Purchase and Renovate Foreclosed Units and Develop Vacant Sites
U.S. Department of Housing and Urban Development (HUD) has awarded more than $20 million in Recovery Act funding to the New York City Department of Housing Preservation and Development under HUD's Neighborhood Stabilization Program 2.
The grants were awarded competitively to applicants who developed the most innovative ideas to address the impact of the foreclosure crisis on local communities while demonstrating they have the capacity to be responsible stewards of taxpayer dollars. The City will use the funds to buy, renovate and resell foreclosed properties in the most-affected neighborhoods to low- and moderate-income families.
In addition to the award to HPD, two other New York City housing agencies received NSP funding in Round 2: Habitat for Humanity New York was awarded $10.5 million and Community Builders received an award of $5.5 million.
Contact Alfred Real Estate today.
U.S. Department of Housing and Urban Development (HUD) has awarded more than $20 million in Recovery Act funding to the New York City Department of Housing Preservation and Development under HUD's Neighborhood Stabilization Program 2.
The grants were awarded competitively to applicants who developed the most innovative ideas to address the impact of the foreclosure crisis on local communities while demonstrating they have the capacity to be responsible stewards of taxpayer dollars. The City will use the funds to buy, renovate and resell foreclosed properties in the most-affected neighborhoods to low- and moderate-income families.
In addition to the award to HPD, two other New York City housing agencies received NSP funding in Round 2: Habitat for Humanity New York was awarded $10.5 million and Community Builders received an award of $5.5 million.
Contact Alfred Real Estate today.
Friday, January 8, 2010
Fourth Quarter Market Reports: Home sales market revival, or another dip on the horizon?
According to fourth-quarter 2009 market reports released by the city's major brokerages today, a jump in sales activity has slowed the decline in the Manhattan real estate market. However, experts have not ruled out the possibility of a double-dip in prices.
Sales activity jumped and inventory shrank in the fourth quarter, the reports show, though prices were still far below 2008 levels. Experts attributed the positive signs to low interest rates, pent-up demand from a slow winter, and falling prices.
While prices in the Manhattan market have declined an average of 25 percent from the peak of the market, fourth-quarter reports show that average apartment prices dropped between 9 and 19 percent from the same period last year.
The average sales price of a Manhattan apartment was $1.296 million, falling 12.7 percent from $1.485 million in the fourth quarter of 2008, and slipping 2.1 percent from the third quarter of 2009, according to the report by Elliman, the city's largest brokerage. All of the brokerages reported a significant increase in activity both from 2008 and the third quarter. There were 2,473 closed sales in the fourth quarter of 2009, up 8.4 percent from 2,282 in the prior-year quarter and 10.9 percent from 2,230 in the third quarter.
The listings Web site Streeteasy.com recorded over 3,800 real estate closings in the fourth quarter of 2009, an increase of 28.6 percent from 2,990 closings in the fourth quarter of 2008 and 17.6 percent more than the third quarter. The site found that the average price of an apartment in Manhattan was $1.327 million, down 7.8 percent from the prior-year quarter but up 2 percent from the third quarter.
"The rate of descent in prices has slowed down," said Sofia Song (formerly Sofia Kim), vice president of research at Streeteasy and the author of the report. "The numbers are less drastic this quarter." The reports also showed fewer apartments available for sale. There were 6,851 listings for available homes in the fourth quarter, Elliman found, some 24.6 percent less than 9,081 in the prior-year quarter. Low interest rates, pent-up demand from a slow winter, and falling prices buoyed the market, real estate pros said.
While experts took the reports as a sign of a healthier real estate market, they cautioned that a double-dip in prices may be on its way, especially with interest rates expected to rise and the first-time homebuyer tax credit scheduled to expire in the second half of 2010. Experts expect that we may have a rise in prices in the first half of the year, and a declining trend in the second half, noting that unemployment is expected to continue rising through much of 2010, bringing with it more foreclosures.
Take advantage of the current buyer’s market while you still can. Contact Alfred Real Estate today.
News Update
Mortgage Rates Drop in First Week of January
After steadily rising for the month of December, the 30-year fixed-rate mortgage averaged 5.09% for the week ending January 7, down from last week's 5.14% average. The mortgage averaged 5.01% a year ago. Fifteen-year fixed-rate mortgages averaged 4.50%, down from 4.54% last week and 4.62% a year ago.
“Current interest rates for fixed-rate mortgages are just about at their annual average for 2009, while ARM rates are considerably below their averages for last year," said Frank Nothaft, Freddie Mac chief economist, in a news release. ARM rates will rise as the economy strengthens and the Federal Reserve decides to raise its overnight target rate, Nothaft added. "However, the federal funds futures market does not anticipate any Fed action until the second half of 2010."
Apartment Rents Down in Fourth Quarter 2009
In New York City, the vacancy rate improved by 0.1 percentage point for the second straight quarter, but around 60% of rental buildings dropped their rents in the fourth quarter from the previous quarter. Effective rents, including concessions such as one month of free rent, fell 5.6% in New York in 2009.
Thanks to falling home prices and record low mortgage rates, it now costs less to own than it has in the past decade on a mortgage-payment-to-rent basis. But falling rents throughout the country are expected to offset some of the recent improvement in affordability, making renting more attractive than owning in some US markets. Low prices have made Manhattan a buyers market over the past few months, so take advantage of this opportunity to buy a new home while the market is still on your side.
After steadily rising for the month of December, the 30-year fixed-rate mortgage averaged 5.09% for the week ending January 7, down from last week's 5.14% average. The mortgage averaged 5.01% a year ago. Fifteen-year fixed-rate mortgages averaged 4.50%, down from 4.54% last week and 4.62% a year ago.
“Current interest rates for fixed-rate mortgages are just about at their annual average for 2009, while ARM rates are considerably below their averages for last year," said Frank Nothaft, Freddie Mac chief economist, in a news release. ARM rates will rise as the economy strengthens and the Federal Reserve decides to raise its overnight target rate, Nothaft added. "However, the federal funds futures market does not anticipate any Fed action until the second half of 2010."
Apartment Rents Down in Fourth Quarter 2009
In New York City, the vacancy rate improved by 0.1 percentage point for the second straight quarter, but around 60% of rental buildings dropped their rents in the fourth quarter from the previous quarter. Effective rents, including concessions such as one month of free rent, fell 5.6% in New York in 2009.
Thanks to falling home prices and record low mortgage rates, it now costs less to own than it has in the past decade on a mortgage-payment-to-rent basis. But falling rents throughout the country are expected to offset some of the recent improvement in affordability, making renting more attractive than owning in some US markets. Low prices have made Manhattan a buyers market over the past few months, so take advantage of this opportunity to buy a new home while the market is still on your side.
Contact Alfred Real Estate today.
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