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A sharp decline in condo sales brought the overall average and median Manhattan apartment sales price lower over the past year. The number of condo closings fell 24% from the fourth quarter of 2010, which meant condos accounted for only 40% of all apartment sales. A year ago, condos were 46% of sales, and since condos are generally more expensive than co-ops, a decline in their share of the market can bring the overall average apartment price lower.
At $1,391,745, the average price for a Manhattan apartment was 3% lower than during 2010’s fourth quarter, while the median price fell 7% to $785,000. However, looking at co-op and condo prices separately shows us that much of this decline was due to the lower percentage of condo sales.
The average co-op price of $1,149,203 in the fourth quarter was just 1% lower than a year ago, helped by an 18% increase in the average price for three-bedroom and larger units. For condos, the average price rose 4% over the past year to $1,825,728 despite the decline in closings, which were led by an 8% gain in the average price of studio apartments.
The economic and financial turmoil that began in the late summer led to fewer transactions than a year ago. Overall, there were 13% fewer closings than in the fourth quarter of 2010, when the threatened expiration of the Bush tax cuts led many high-end owners to sell before the year ended. While condo sales fell 24% during this time, co-op sales fell by just 4%.
Job growth slowed in both the U.S. and New York City in the second half of 2011. Through November, 49,300 jobs were added in NYC in 2011, down from 52,700 in the first 11 months of 2010. The city’s unemployment rate in November was 8.9%, the same level as the beginning of 2011. While there has been stagnation in hiring recently, New York’s recovery remains well ahead of schedule. This combined with a relatively low rate of available apartments has led the Manhattan market to continue to outperform the rest of the nation.

Manhattan Vacancies Scarce

By JOSEPH DE AVILA

The apartment vacancy rate in New York City continues to be the lowest in the nation, according to a new report. That’s great news for landlords, but bad news for renters’ pocketbooks.

Only 2.8% of the city’s apartments were vacant during the second quarter, according to a report by Marcus & Millichap, real-estate investment firm. Minneapolis came in second in the nation for low vacancy rates at 2.9% and San Jose was third at 3.2%
Potential homeowners who are opting to rent rather than buy are in part driving the lower vacancy rates, said Hessam Nadji, managing director of Marcus & Millichap. Pent-up demand from young people who were living with their parents but are now moving out also added to the city’s crowded apartment market, he said.

As a result, the average monthly rent in the city increased to $2,749 in the second quarter, or about $47 less than the high reached in 2008.

“We saw a tremendous demand for apartments,” Mr. Nadji said. His firm is forecasting that the median rent in the city will reach $2,895 for the year, surpassing the 2008 high.

After the start of the financial downturn, landlords offered lavish incentives to woo renters. With fewer vacant apartments, landlord concessions in the form of a free month’s rent or payment of broker fees are all but gone, said Senad Ahmetovic, a broker with Halstead Property.

“I’m seeing the high-end rentals that are moving very quickly,” Mr. Ahmetovic said. Bidding wars are even becoming common in hot spots like the East Village, he added.

Whether New York is able to keep up with its run of rising rents is unclear with the turmoil in the stock market and the uncertainty created by the debt deal fight in Washington.
“Where we go from here, it’s a little bit of a wild card,” Mr. Nadji said.

A separate report that looked only at July’s apartment rentals in Manhattan indicated some softness in the market. The report, to be issued Wednesday, said the average Manhattan apartment rented for $3,358 in July, down from $3,372 in June, according to brokerage firm Citi Habitats. Manhattan’s vacancy rate in July was 0.86%, up from 0.69% in the previous month.

Whether the July increase in Manhattan’s vacancy rate was one-month blip or the start of a trend toward increased vacancies is too early to say, said Gary Malin, president of Citi Habitats. Rumors of layoffs and uncertainty caused by the debt-ceiling fight may have caused the small spike in vacancies and drop in prices, he said.

“It’s really going to depend on how long and deep this current situation is,” Mr. Malin said. But if the economy falls back into a recession, “historically the vacancy rates do rise and rents become more negotiable,” he said.

Wednesday, August 10, 2011

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BY Kenneth Lovett / NY DAILY NEWS

Escape from New York is not just a movie – it’s also a state of mind.

A new Marist College poll shows that 36% of New Yorkers under the age of 30 are planning to leave New York within the next five years – and more than a quarter of all adults are planning to bolt the Empire State.

The New York City suburbs, with their high property values and taxes, are leading the exodus, the poll found.

Of those preparing to leave, 62% cite economic reasons like cost of living, taxes – and a lack of jobs.

“A lot of people are questioning the affordability of the state,” said Lee Miringoff, director of the Marist College Institute for Public Opinion.

An additional 38% cite climate, quality of life, overcrowding, a desire to be closer to family, retirement or schools.

The latest census showed New York’s overall population actually increased, though parts of upstate shed population and jobs.

A full 53% think the worst is yet to come for the state’s economy, while 44% say things should start improving.

“As the state of the economy fails to recover, New Yorkers see this not as a sluggish rebound, but as a sluggish economy,” Miringoff said.

During a visit to Buffalo yesterday, Gov. Cuomo yesterday said attracting and retaining jobs is a priority for his administration.

“We have to keep jobs here and we have to develop new jobs,” he said. “And we want to start bringing back jobs from other parts of the country.”

(source: The Real Deal)
College graduates looking to land an affordable Manhattan rental apartment in their first foray into the real world, better act fast — or they may be out of luck. As the summer rental season inches closer, the market is growing stronger by the month, according to two reports released today by Citi Habitats that track rental deals brokered by the firm’s 12 offices.

Manhattan vacancy rates have declined every month since December’s 12-month high of 1.34. In April the rate was 0.94, which compares favorably to the 1.23 percent vacancy rate achieved in April 2010. At the same time, rents have spiked across units of every size in Manhattan, led by studios and one-bedroom units — 3 and 4 percent, respectively, month-over-month — which together comprises three-fourths of the rental market, according to Gary Malin, president of Citi Habitats.

One of the reports was a 2010 year-end review of the market, while the other was specific to April 2011. The year-end report showed growth of 2.8 percent and 1.7 percent in studios and one-bedroom apartments, respectively, but half-percent declines in two- and three-bedrooms compared with 2009.

However, in 2011 those larger units have closed the gap in a big way. Rents for two- and three-bedroom units soared. Two-bedrooms rose 9.3 percent while three-bedrooms climbed 9.1 percent in April 2011 compared to their 2010 averages, and now sit at $3,711 and $4,946, respectively.

And there’s no neighborhood renters can turn to escape the rate hikes. With the exception of studios in Washington Heights, every single unit type in every single neighborhood increased in April 2011 compared with April 2010, according to the monthly report.

But Wall Street, typically a haven for young, just out-of-college professionals saw rates soar highest, as the monthly average one-bedroom apartment rent jumped to $3,356 in April 2011, up 35.1 percent from a year earlier. Meanwhile rents for two-bedroom homes skyrocketed to $4,473 a month, 27.4 percent more than in April 2010. And if the strategy for avoiding high rents was once to look north, it may not be anymore. Harlem rents are beginning to close the gap, too, especially for larger units. Whereas, monthly rents stood at $1,768 for two-bedroom homes in April 2010, those numbers hiked 31.4 percent over the course of the year to $2,324.

The neighborhood most immune to rent spikes was Soho-Tribeca, where the vacancy rate was already at just 0.52 percent in April 2010, and prices were the highest in the city at $5,220 per month. Still, studios and one- and two-bedroom units saw rent increases of roughly 5 percent year-over-year.

In 2009, more than 50 percent of leases brokered by Citi Habitats included at least some landlord concessions, and even through April 2010 that number hovered at 41 percent. But by December 2010 just 22 percent of leases brokered included a landlord concession.

The 2010 year-end report found that 23 percent of Manhattan renters earn less than $50,000 per year, with the recovering rental market likely weighing most heavily on that segment of New Yorkers.