One massive record-breaking sale — the $88 million penthouse at 15 Central Park West — drew most of the headlines in the New York real estate world in the fourth quarter of 2011. But for the rest of us non-billionaires, the market showed little life in the quarter, with sales and prices falling in the city.
With the new year just days away, we asked Noah Rosenblatt, a real estate broker and the founder of UrbanDigs.com, which provides real-time data on Manhattan real estate, to answer some of our questions about the Upper West Side market.
West Side Rag: How would you characterize the performance of the Upper West Side market in 2011?
Noah Rosenblatt: As a whole, the Upper West Side tracked very close to the broader Manhattan market over the course of 2011. The one noticeable difference is in the price points of this neighborhood where the higher end of the market, $2M+, has outperformed the lower end considerably. All price points in the UWS had their highest activity between May and July, before slowing back down to levels seen today.
WSR: Was there a noticeable difference between co-ops and condos this year?
NR: Demand for UWS co-ops outperformed demand for condos this year. To get more specific, Pending Sales in the UWS co-op market rose 7.4% over the last 12 months while the same measure for condos declined 12.2%. Demand for UWS co-ops peaked in April, while demand for condos in the area peaked in late June. In terms of supply, the co-op market saw a decline of 3.3% over the last 12 months while condos saw a slight 2% rise in UWS inventory. Both of these supply trends has been down since mid October.
WSR: What do you expect to happen to the number of sales and prices in 2012?
NR: In regards to price action, the UWS tends to track very close to the broader Manhattan market. We saw a 2+ year slow but progressive reflation in median price trends since the lows in early 2009. It is my belief that the most aggressive bids and deals were signed in mid 2011; helping to power a very strong Q3 report. We might see some spillover of these high end deals closing for Q4, but in general we have steadily slowed since July. I would expect this current market downtick to reveal itself in the Q1-2012 report.
What happens with sales volume is very dependent on how buyer confidence might be impacted should stock markets react to one of the following threats: 1) the sovereign debt crisis in Europe, 2) a slowing China, or 3) prolonged unintended consequences of fed policy to counteract deflationary forces. With stocks, things dont matter until they do so timing an ‘event’ is impossible. As long as things remain somewhat stable, I dont see any reason why sales volume would decline noticeably from 2011 levels. However, in 2011 we had a sustained surge in demand for high end Manhattan property over the spring and summer. It will be difficult to match that level of action in 2012, so we might see some natural market forces kick in sending median price trends slightly lower than where Q3-2011 peaked out.
WSR: If you could give one piece of advice to sellers and one piece of advice to buyers in the coming year, what would it be?
NR: My advice to sellers would be to be realistic on your pricing given all the available data that you can get. The market dictates value, not the broker or the seller, so its best to list property just above where you expect bids to come in at. If the bids dont come in after a period of time, re-think your price!
My advice to buyers is to understand the importance of an agents ability to provide solid comps analysis and bidding strategies for your target property and to be cognizant of what kind of market you plan to buy into. Know the comps, know the submarket trends, and know the broader market trends. Know where we are today and where we just came from. I still encounter buyers that expect a 35% discount from peak on prime Manhattan property, and it pains me to tell them how that window of opportunity existed only for a few months back in early 2009 when fear levels were much higher than they are today. Having realistic expectations in this market is critical, otherwise it may take forever to buy or sell.
Check out Noah’s site at urbandigs.com.
Photo on 76th Street by purplevintagespaceprincess via flickr.
These are very solid tips for the Upper West Side real estate market. West Side rentals are still in high demand, it’s been such a strange year with the demand for luxury NYC condos to be down. We especially believe in realistic expectations, but not having to sacrifice your needs for the right price, either!