Some real estate professionals believe that "it is possible that the average slide from peak values could reach 40 percent by the end of 2010" in Manhattan, putting "values back to levels last seen in 2002," according to an article published today by Teri Karush Rogers in the on-line edition of The New York Times. The article is scheduled to appear on the front page of the newspaper's Real Estate section Sunday.
The article, however, indicated some industry leaders, such as Pamela Liebman, the president of the Corcoran Group, and Hall F. Willkie, the president of Brown Harris Stevens, indicated their forecasts were not as dire and that declines would not be that large.
Jonathan J. Miller, the president of Miller Samuel, a Manhattan research and appraisal company, estimated in the article that contract prices have declined by about 25 percent since last summer.
"One measure of just how anorectic sales have become," the article maintained, "is the bloated state of inventory. "It's right now the highest since I started tracking in 1999,' Miller said. Inventory levels in Manhattan have averaged 7,021 a month for the last decade, he said, and there were 10,243 co-ops and condominiums for sale at the end of February - 38 percent more than a year ago."
"Many expect that the million-dollar segment will stabilize first," the article continued, "because it is powered by first-timers who are drawn by falling prices and don't have to sell before they buy."
The article quoted Ms. Liebman as stating that "We see a real increase in traffic and a lot more buyers out there," adding that "The fish are circling and they will eventually get hungry and start biting. What we're seeing is a big disconnect - sellers need to get more realistic, but buyers don't even think it's enough. Buyers are not hesitating to walk in and bid 40 percent off the price, but sellers aren't taking it."
"As prices head south," the article continued, "Mr. Miller said that he expected condos to be more volatile. New construction, including condo conversions, seems likely to suffer the most. 'Contract activity on new development has been much harder hit than co-op resales because of credit,' Mr. Miller said. Co-op boards, however, could damage themselves, he said, if they become too picky with buyers. 'The danger they face is that co-op boards are in denial about the change in the market,' Mr. Miller said. 'They've been even more conservative with this downturn in terms of financial qualifications - if you work on Wall Street now that's like a liability - and they've been killing sales that they feel are low, to protect values in the building.' That sort of behavior only depresses values within a building. 'It gets a reputation in the brokerage community of being unrealistic about market conditions and that makes it much more difficult to attract buyers,' Mr. Miller said. 'I'm not saying they shouldn't be prudent, but by overreacting they are doing what lenders are doing, which is damaging the collateral they are trying to protect.'"
The article, however, indicated some industry leaders, such as Pamela Liebman, the president of the Corcoran Group, and Hall F. Willkie, the president of Brown Harris Stevens, indicated their forecasts were not as dire and that declines would not be that large.
Jonathan J. Miller, the president of Miller Samuel, a Manhattan research and appraisal company, estimated in the article that contract prices have declined by about 25 percent since last summer.
"One measure of just how anorectic sales have become," the article maintained, "is the bloated state of inventory. "It's right now the highest since I started tracking in 1999,' Miller said. Inventory levels in Manhattan have averaged 7,021 a month for the last decade, he said, and there were 10,243 co-ops and condominiums for sale at the end of February - 38 percent more than a year ago."
"Many expect that the million-dollar segment will stabilize first," the article continued, "because it is powered by first-timers who are drawn by falling prices and don't have to sell before they buy."
The article quoted Ms. Liebman as stating that "We see a real increase in traffic and a lot more buyers out there," adding that "The fish are circling and they will eventually get hungry and start biting. What we're seeing is a big disconnect - sellers need to get more realistic, but buyers don't even think it's enough. Buyers are not hesitating to walk in and bid 40 percent off the price, but sellers aren't taking it."
"As prices head south," the article continued, "Mr. Miller said that he expected condos to be more volatile. New construction, including condo conversions, seems likely to suffer the most. 'Contract activity on new development has been much harder hit than co-op resales because of credit,' Mr. Miller said. Co-op boards, however, could damage themselves, he said, if they become too picky with buyers. 'The danger they face is that co-op boards are in denial about the change in the market,' Mr. Miller said. 'They've been even more conservative with this downturn in terms of financial qualifications - if you work on Wall Street now that's like a liability - and they've been killing sales that they feel are low, to protect values in the building.' That sort of behavior only depresses values within a building. 'It gets a reputation in the brokerage community of being unrealistic about market conditions and that makes it much more difficult to attract buyers,' Mr. Miller said. 'I'm not saying they shouldn't be prudent, but by overreacting they are doing what lenders are doing, which is damaging the collateral they are trying to protect.'"
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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