Posts Tagged ‘real estate appraisal’

Manhattan Apartments Decline in Value

Monday, November 17th, 2008
Crisis Hits Home for New Yorkers – Where Wall Street Meets Main Street


(MMJ) given the unprecedented events of the past 2 months we find it
necessary to provide an interim update on the state of the Manhattan
housing market. Declining prices, 10-15% per annum, are now clearly
broad based and affecting all neighborhoods. We have examined the data
and broken it down into two sets. Firstly, the closed sales and
secondly, the current pending deals and listings. These are our
findings based on the closed sales data as reported by The Real Estate
Board of New York (REBNY):

- Market conditions have been weakening since the
sub-prime crisis began in the summer of 2007. Effects were
generally contained to the tertiary sectors of the market until
- In March ’08, the weakness expanded into the broader
markets. Lenders tightened their underwriting criteria and demand
for apartments slackened.
- Average apartment price is down 8.8% since 1Q08. The
3Q08 average was $1,415,000 versus $1,552,000 for 1Q08.
- There were 4,019 closed apartment sales in the first
quarter of ‘08 and 3,664 in the 3rd quarter, also down 8.8%
- The median price of a Manhattan apartment peaked at
$920,000 in the second quarter and fell 8.2% to $845,000 in the
third quarter.The current data, pending trades and listings, are the best real time
indicators; however they are much more difficult to track. MMJ has
amassed a statistically significant sample (over 200 contracts since
September 1) from which we are able to draw the following conclusions:

- Market conditions have deteriorated further. Sales
volume (contracts) during September/October was off by
approximately 75% versus same period 2007.
- Numerous deals negotiated pre-September have been
re-traded and at lower levels
- Inventory levels are ballooning as absorption of new
developments drops off
- Job losses in the financial services sector are
widespread (estimated to reach 140,000 by year end) and expected
to continue
- Rental rates are also declining
- Overall Demand for housing is declining

In conclusion, the most current data indicate that prices have declined
at 10-15% per annum from 03/08 levels. Additionally, current trades are
now occurring at levels equal to the first half of 2006.
About MMJ & the Market Measure: Mitchell Maxwell & Jackson, Inc. is New
York’s largest residential real estate appraisal company. The Market
Measure reports periodic sales activity of specific property types
within established geographic parameters of New York City. With New
York’s largest residential sales database, the report shows changes in
the market by size, location, and price rang e. Quarterly and additional
reports can be found on the company website at


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