Manhattan Luxury Real Estate Prices Rise as Sales Plummet

The latest crop of Manhattan luxury real estate industry reports tell much the same story – falling volumes accompanied by rising average sales prices. This is a not-unusual occurrence in a down housing market, with sales so depressed it is not reasonable to make a year on year comparison and claim anything certain in the price data.

The media of course are beginning a feeding frenzy of “buy now or be forever priced out of the market!” headlines. It really wound be entertaining if it was not so destined to end in tears. This is a selection of headlines from the traditional media – make your own mind up.

Manhattan Residential Real Estate Now ‘Reasonable,’ says the Wall Street Journal going on to claim that “buyers are pounding the (frozen) pavement hunting deals,” and carefully adds that, “Weakness, however, persists for new projects, which saw rampant overbuilding during the boom. Those median prices tumbled 23% from a year earlier to a median $1.19 million, Corcoran reports. It also has been tough for the luxury segment, hurt by higher interest rates on so-called jumbo loans, which saw median prices fall 22% to $3.9 million.” Wall street journal

The jump in activity is all too easily construed as a “recovery,” but ignore the lack of activity in new builds at your peril. 90% drop in new build applications is not to be sneezed at and teh shadow inventory is substantial.

Sales Spur Optimism in Manhattan Real Estate, says the New York Times. “People feel the market has pretty much bottomed out,” said a prominent New York Real Estate agent, Dottie Herman. New York Times

At least CNN Money had teh decency to ask a question rather than make a statement. Will bonuses save the day for Manhattan real estate? “People feel there’s stability in New York. The fear factor is gone. The year 2009 started out in absolute fear. This year is starting off in hopefulness,”Pam Liebman, CEO of the Corcoran Group, one of New York’s biggest real estate brokers. CNN Money

So – at least the real estate agents agree – now is the time to buy and prices will not fall any more. Good to know. Reassuring even…… Sadly, the first time home buyer credit, silly low interest rates and a growing number of properties held “off the radar,” do not a summer make – the shadow inventory continues to rise.