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Manhattan Co-Op Prices Decline 22%, Most Since 1995

Manhattan Co-Op Prices Decline 22%, Most Since 1995 - Manhattan - Price Drop - Housing Crisis - USA - Property - Real Estate

Manhattan co-op prices dropped the most since 1995 and transactions for all apartments plummeted 48 percent in the first quarter from a year earlier as the recession and Wall Street unemployment cut demand.

The median price for co-operative apartments fell 22 percent to $587,500, according to a report today by New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. The median for all apartments rose 3.1 percent to $975,000, led by closings at new luxury developments where contracts were signed at the market’s peak.

“The crisis on Wall Street took a lot of our buyers out of the market,” said Chief Executive Officer Pamela Liebman of property broker the Corcoran Group. “We didn’t have the bonuses that we had in the last couple of years helping to drive the prices up.”

New York City has been girding for a drop in property values since three of the five largest investment banks collapsed last year. Banks and securities firms eliminated more than 180,000 jobs in the Americas so far, according to data compiled by Bloomberg, while mortgage-related asset writedowns and losses now top $1.29 trillion. Wall Street bonuses declined 44 percent, according to New York State Comptroller Thomas DiNapoli.

Five property brokers and real estate Web sites issued market reports today. Two said Manhattan’s overall median apartment price fell and three said it rose. The groups cull information from city records and their own data.

Condos Bolster Prices

Corcoran said median prices dropped 2 percent and Streeteasy.com said they fell 3.4 percent. The declines would have been greater if new developments were excluded.

“That’s kept prices propped up,” Liebman said. “Now that many of those sales have worked their way through the pipeline, you will start to see additional price deterioration.”

The median price of condos, which account for about one- third of New York’s owner market, climbed 5.8 percent to $1.23 million, Miller Samuel said. Condo buyers hold the deed to their property, while co-op owners get shares in a corporation that controls the building.

The median price of studios dropped 12.3 percent to $437,500, according to Miller Samuel. One-bedroom apartments dropped 10.7 percent to $710,000 and 3-bedrooms dropped 2.6 percent to $3.75 million. Two-bedroom apartments saw the smallest decline, dropping less than 1 percent to $1.6 million.

Big Gains

Manhattan apartment prices doubled during the five-year housing boom, culminating last year with record sales at 15 Central Park West and the former Plaza hotel, each offering units for more than $6,000 a square foot.

Buyers at 15 Central Park West included Goldman Sachs Group Inc. Chairman Lloyd Blankfein and former Citigroup Inc. Chairman Sanford Weill. Developer Harry Macklowe purchased multiple units at the Plaza.

Today’s rising inventory and shrinking sales will pressure sellers to lower prices, said Jonathan Miller, president of Miller Samuel.


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