Tribeca Property

The numbers are in for the 1st Quarter and it’s clear that the Manhattan market is off the heated pace of last year.  The venerable Jonathan Miller released his report today and indicated that sales were off 34% compared to the prior year quarter.  Several of the other brokerages claimed that sales were off only slightly, but Jonathan’s numbers are in line with my numbers for the Tribeca market (sales down about 31%) and appear more accurate.

 Average Sales Price

Average Sales Price increased to a record $1.722m, up 33.5%.  Much of the increase was due to the closing of two high end condominiums in the 1st quarter, namely 15 Central Park West and the Plaza.  Excluding these developments, the average sales price was still up almost 20%.  Since new developments tend to skew the actual reality of the current market due to the lag between when the purchase is made and when the property is actually closed on, the coop average sales were of interest since 99% of all new developments are condos.  Looking at the coop market, the average sales price was $1.39m or up 23% from the prior year quarter.  That’s quite significant.  Average price per square foot was also up almost 16% to $1,128.

Supply

Supply in the 1st quarter of 2008 was up about 5% compared to the prior year quarter.  The increase was almost entirely due to condos, since coop supply actually dropped 2% compared to last year’s numbers.  Since the sales pace is materially off from last year, the supply number is expected to rise as we move further into 2008.

Days on Market and Negotiability

Days on Market increased 11% to 146 days compared to the prior year quarter and the average discount off list also increased 3.2% from 2.6% in the prior year quarter.  This is not surprising and normally would go hand-in-hand with a slowing market.  Buyers do not feel the urgency to purchase quickly and are demanding more of a discount.

Analysis

The market in 2008 seems to be returning to its much normalized pace of several years back.  The volatility in the financial sector, the tightening of credit and overall consumer confidence is taking its toll.  Will the trend reverse or get worse?  It’s hard to say.  Most consumers have been shell shocked from one economic event to another culminating recently with the collapse of Bear Stearns.  There’s a feeling of not knowing what to expect next.  Unless there’s some increase in consumer confidence and general stability not only in the financial services sector, but in the economy as a whole, the trend will not likely reverse any time soon.

Jonathan Miller’s complete report can be accessed here.