By Carter
B. Horsley
In the aftermath
of the September 11, 2001 terrorist attacks on the World Trade
Center in Lower Manhattan and the Pentagon near Washington, the
luxury residential real estate market in Manhattan has been suffering
from a lot of anxiety. Anecdotal information indicated that many
sectors had dipped perhaps 15 percent or so but some other reports
have indicated surprising resilience and a continued healthy demand.
Given the fact that the nation's economy was weakening before
the attacks and that the city's economy has certainly taken a
considerable beating from the terrorist attacks in terms of substantial
job losses and concerns about the travel and hospitality industries,
it would be foolish to regard that the real estate markets can
continue to climb as dramatically as they have over the past few
years to extremely high heights.
Low interest rates and weakened stock markets, of course, have
helped greatly in stabilizing the city's real estate markets,
which have also been aided by the city's remarkable renaissance
and building boom over the past several years that have made the
city more attractive in general. Furthermore, the terrorist attacks
sparked something of a national love affair with the city in contrast
to its former rather disdainful regard.
The most recent report issued in mid-April, 2002, by the Corcoran
Group, a leading residential sales and brokerage real estate firm,
maintained that "market-wide 2001 was a year of modest growth
in Manhattan real estate," adding that "while the first
half of the year enjoyed a robust market and interest rates have
remained low, the gradually slowing economy coupled with the extraordinary
events of September 11th caused a brief period of eroded consumer
confidence resulting in decreased sales volume in the fourth quarter,
particularly in the condo market."
"Nevertheless," the report continued, "the overall
picture of 2001 is one of continued - albeit slower - growth over
the previous year.The fourth quarter was a difficult one for the
East Side's condo market, with average price corrections around
- 13 percent. The coop market remained unconcerned, growing an
incredible 16 percent and demonstrating the ongoing strength of
this cornerstone of the New York market."
The report found that the average sales price at the end of 2001
for 1,717 closed coop sales from 57th to 96th Streets on the East
Side was $911,000, up 6 percent from the previous year and that
of these sales studios witnessed the greatest increase, 39 percent,
from the previous year to an average of $198,000, followed by
one-bedroom units that were up 11 percent in the same period to
an average of $353,000.
The average sales price of 1,001 closed condo sales from 42nd
to 96th Streets on the East Side was $1,286,000, according to
the report, no change from the end of 2000. Of these sales, studio
apartments climbed 22 percent to $292,000, while one-bedroom units
climbed 18 percent to $538,000. Apartments of three or more bedrooms
rose 3 percent to an average of $2,847,000 and $3,095,000 for
coops and condos, respectively.
On the West Side, the average sales price at the end of 2001 for
1,248 closed coop sales from 57th to 125th Streets was 8 percent
over the year to $674,000 with studios showing a 26 percent gain
to $209,000 and one-bedrooms rising 18 percent to $377,000. The
average sales price of 796 closed condo sales on the Upper West
Side rose 11 percent at the end of 2001 to $870,000 with apartments
of three or more bedrooms showing the largest gain, 19 percent,
to $2,136,000.
The report, which was based on data collected by The Corcoran
Group and Mitchell, Maxwell & Jackson Inc., also indicated
that "while high-end property prices in the Downtown area
adjusted downward, the overall performance of the district [south
of 34th Street] was significantly better than the year before
due to the many new building units that closed in early 2001."
"This market has remained unexpectedly strong," with
fourth-quarter price adjustments isolated to larger properties,
it continued.
This report, however, was much, much shorter than in the past
several years in which the downtown figures were broken in various
neighborhoods and this report did not comment specifically on
the Lower Manhattan market that certainly suffered substantially
as a result of the terrorist attacks. This report also did not
break out its East Side and West Side statistics into smaller
categories, such as Fifth Avenue or Central Park West, as it had
in the past.
Reporting on 81 closed sales of one- and two-family townhouses
in Manhattan, the survey found that the average sales price at
the end of 2001 on the East Side had risen 6 percent to $5,015,000
although the average price per square foot fell 8 percent to $721.
On the West Side, the sales price fell 13 percent to $2,705,000
with the square foot average declining 3 percent. The report found
that the volume of sales decreased by two-thirds over the course
of the year.
In a cover letter to the report, Sheila Lokitz, vice president
of The Corcoran Group made the following comments:
"The results of this report are a testament to our great
city, and the resilience of the New York real estate market. While
the fourth quarter was a period of retreat and uncertainty, sale
statistics in every part of Manhattan were up over the previous
year. As we enter 2002, we are seeing a number of encouraging
indicators: a strong increase in market activity, the number of
sales contracts signed by The Corcoran Group in January were up
35 percent over the same period in 2001, a high proportion of
sales are being made at asking price, renewed interest in the
luxury end of the market. If you have been considering purchasing,
this is an excellent time. Mortgage rates are still historically
low, and prices have just started to move up. And, with the billions
of dollars for relief and rebuilding that are being pumped into
New York City, and the impending turn around in the economy and
the stock market, we expect our real estate market to continue
to strengthen."