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.
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