Even as the national housing market has been hit by slow sales and falling prices, Manhattan has continued to shine. But now its light may be dimming.
Upper East Side townhouse was listed in July for $24.5 million. Current asking price: $19.5 million.
Fewer apartments are being sold -- 858 went into contract in September, a 9.9% drop from a year ago and the lowest total in two years, according to brokerage Corcoran Group -- and the inventory of unsold apartments is increasing. Prices are also leveling off. The median price of a Manhattan apartment fell 3.4% in the third quarter from the previous one, according to the research firm Radar Logic. The firm says properties are sitting on the market longer, too, an average of 123 days, up from 94 days at the peak of the market in 2005.
Developers used to seeing yet-to-be-built apartments get snapped up sight-unseen are increasingly offering incentives, from help with closing costs to museum memberships, to jump-start sales. "Buyers are more hesitant," says Hall Willkie, president of brokerage Brown Harris Stevens.
I wrote a paper some years ago on the effect of the tech stock market on house prices in California. Short answer: none in LA, lots in San Jose. I am guessing that the stock value of investment banks (and the bonuses of their employees) has the impact on Manhattan real estate that the stock value of tech companies has on Silicon Valley real estate.