Data analysis firm Radar Logic says in its newest RPX report that Manhattan condo prices were 6.7 percent higher in May than one year earlier but 16 percent lower than the peak in late 2008.
Referring to a gradual upward trend, the company said month-to-month growth in condo prices in was “de minimis,” suggesting “a relatively moribund Manhattan condo market at a time of year when prices typically rise.”
In May 2009, Manhattan condominium sales dropped to their lowest rate since the beginning of Radar Logic’s 10-year data history. Since then, the RPX Manhattan Condominium Transaction Count has doubled while remaining below its 10-year average. The firm declared:
On an absolute basis, May’s transaction count does not suggest robust sales activity relative to history.
The bulk of the sales growth from May 2009 to May 2010 involved sales of existing units. New-unit sales increased as well, rising to 21 percent of total sales from 15 percent a year earlier.
Buyers purchased larger units than they did last year, prompting the median unit size in condo sales to increase 15 percent. This phenomenon was particularly pronounced in sales of new units, in which the median unit size increased from 766 square feet in May 2009 to 1,356 square feet in May 2010.
Other of the firm’s observations
- As of May 31, 2010, the RPX Manhattan Condominium Price had increased to $1,017.49 per square foot from $953.64 per square foot in May 2009;
- Condo prices fell rapidly in May 2009 (down 12.7 percent month over month) and since then they have exhibited a gradual upward trend;
- The RPX Manhattan Condominium Price rose a mere 0.1 percent from April to May;
- The rate of condo transactions in May 2010 was almost double that in May 2009, when sales activity had dropped to its lowest level since the beginning of Radar Logic’s historical data in January 2000. The May 2010 sales rate was roughly 4 percent below the average sales rate in Manhattan over the last 10 years, and 6 percent below the average sales rate during the month of May over the last 10 years;
- While sales of foreclosed condominiums at auction and in REO sales remain rare in Manhattan, accounting for just over 2 percent of total condo sales in May 2010, there is a significant inventory of foreclosed units currently for sale;
- According to Foreclosure.com, there were 45 foreclosed homes and 383 “pre-foreclosure” homes for sale in Manhattan as of July 28.1, but the RPX Manhattan Condominium Transaction Count for the 28 days ending May 31, 2010, was 353;
- Seventy-two percent of the additional sales in May 2010 relative to the prior year period were sales of existing units;
- New-unit sales jumped 188 percent relative to the prior year period;
- New unit sales increased from 15 percent of total Manhattan condominium sales in May 2009 to 21 percent of total condo sales in 2010;
- The median size of condos sold in Manhattan increased 15 percent year over year, from 825 square feet in May 2009 to 951 square feet in May 2010;
- The median size of new units sold increased 77 percent year over year, from 765.5 square feet in May 2009 to 1,356 square feet in May 2010;
- Six of the eight RPX Manhattan Neighborhood Prices increased on a year-over-year basis, one was flat year over year, and one declined.
- The Financial District posted the largest year-over-year gain (35.7 percent) “but that figure is unreliable due to a very low transaction count in the prior year period;
- The year-over-year gains reported for the Upper West Side, the Upper East Side and Midtown/Clinton (7.2 percent, 5.5 percent and 3.9 percent, respectively) are more reliable;
- The only neighborhood to post a year-on-year decline was the East Village/Lower East Side (-9.0%), but low transaction counts in May 2009 cast doubt on the reliability of that figure as well;
- Four neighborhoods posted month-over-month increases in RPX prices: Soho/Tribeca, Upper West Side, Upper East Side and Midtown;
- Four posted month-over-month declines: Financial District, Murray Hill/Gramercy, Chelsea/West Village and East Village/Lower East Side;
- All eight of the neighborhoods tracked by Radar Logic posted year-over-year gains in sales activity, with the largest gain in percentage terms in the Financial District, where the rate of transactions increased 550 percent;
With regard to the rental market in Manhattan, Radar Logic disputes reports of a “rebound,” saying landlords told of rents falling by approximately 25 percent from their peak.
The firm’s sources talked about the practice of “‘doubling up,” when young renters share apartments rather than live on their own. As prices fell and incentives grew, they started moving into their own places. “As as a result the market has ‘stabilized,’” Radar Logic reports, adding:
One source suggested that rents had increased by about 2-3 percent from their bottom and he was trying to remove some of the incentives that have been offered lately.
When asked about his view of whether or not the market was really firming, his response was a clear ‘no.’ In this particular landlord’s view, the market would be flat at best for some time.
Radar Logic is a dependable source of information about the Manhattan housing market, but it is limited by virtue of its concentration on condos and the lag between the month analyzed and the time of its reports.
Strangely, the latest report makes no mention of the homebuyer tax credit, which pulled sales forward and thereby depressed May and June statistics. Moreover, falling consumer confidence and economic uncertainties certainly have dampened the market, which is pretty much stalled right now.
We really won’t know where the New York City housing market is headed until after Labor Day, if then.
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Malcolm Carter
Licensed Associate Real Estate Broker
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Charles Rutenberg Realty
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