But will they accept offers 25% less than it’s “worth”?

NYC co-op sales collapse. We’ve been reporting on this for months but for the benefit of those Greenwich residents who don’t believe something’s happening if it isn’t reported in The New York Times, feast your eyes.

Apartment prices have once more become the talk of the town in Manhattan, but this time the talk is of uncertainty and falling numbers. While brokers say they are seeing more activity lately, especially from first-time buyers taking advantage of lower interest rates, housing analysts are predicting a prolonged slump in prices and sales that could last as long as four or five years.

In this year’s first quarter, sales of co-ops and condominiums in Manhattan plunged nearly 60 percent from the first quarter of 2008. Average co-op prices fell as much as 24 percent in the same period, according to various market reports released last week.

Condo prices have held up so far, but only because buyers who went into contract long before the downturn were closing on newly completed condominium buildings. But now few new contracts are being signed on unfinished condominiums, and some buyers have been renegotiating contracts or are trying to back out of them. Co-ops and condos make up 98 percent of the residential properties for sale in Manhattan.

The stress is most severe at the high end of the market. There are 350 apartments and town houses for sale in Manhattan with asking prices of more than $10 million, and inventory has been growing. It would take about six years at the current sales rate to absorb all those listings.

“For the last three years, it was the bigger the better,” said Dolly Lenz, a broker at Prudential Douglas Elliman. “Now the key words are smaller, livable and affordable. Before no one asked what the maintenance was. Now everyone wants to know.”

Manhattan was spared some of the housing problems the rest of the country faced during this downturn. The mortgage foreclosure rate in Manhattan remains low even today. While thousands of condos were built here, most were bought by homeowners, not speculators, as was common in Miami and other oversaturated markets.

But Manhattan housing prices were driven higher by record earnings and bonuses on Wall Street, and they fell hard when the music stopped last fall.

4 Comments

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4 responses to “But will they accept offers 25% less than it’s “worth”?

  1. Cos Cobber

    I am so sick of Dolly Lenz. Is she not the Henry Blodget of NYC residential real estate?

  2. anonymous

    CF’s blog has now damaged the “uniquely” vaunted Manhattan mkt…who will stop this evil short-seller?

  3. anonymous

    Leverage and white elephants…

    IIRC, in ’00, Schwarzman bought his apt at 740 Park for <$2K/sf from a distressed Saul Steinberg (recall ole Saul from his ’80s LBO glory days?); Saul bought this white elephant apt back in ’70s for maybe $250K

    Early ’08 asks on 15 CPW apts were $8K/sf; why won’t 15 CPW or 740 Park (or any other apt) revert to ’90s pricing? Sort of like that distressed FPC waterfront land which can’t find a buyer….

    I know, I know…they aren’t making more waterfront or they aren’t building new 15 CPWs and 740 Parks….that explains it

  4. Manhattan has now surcome to the main trend. I don’t think it will turn around soon. It ran up hard. There are buys outside of the city now that has caused a major disparity in their market. People are not going overboard anymore, although Manhattan did not see the same speculation and toxic mortgages as in Florida, Nevada, So.California and Arizona it did go up considerably and unchecked far longer than any where else. Wall Street right now is still not totally on its feet so there won’t be heavy bids for apartment for a while.