Slumping NYC Real Estate

The Non-Hot Hot Spots
NY Magazine, 22-Nov-09
By S.Jhoanna Robledo

Where are sellers hungriest to make a deal?

When the proprietors of the real-estate auction service Bid on the City wanted to find out where their services would come in handy, they turned to Matthew Haines for data. The founder of PropertyShark.com, Haines and his team dug into third-quarter numbers to help pinpoint the five areas of prime Manhattan that have been toughest on sellers, based on three major criteria: how long it takes a typical seller to find a buyer there (Manhattan average: 150 days), median-price drops over the past two years (Manhattan overall: 10 percent), and the number of closed sales relative to the total number of properties on the market (the average is 23 percent, and higher is better). Bid on the City’s Albert Feinstein says he’d expected unglamorous areas like Murray Hill to top the list, but the results were very different. (It may be that dullness equals stability.) As for where the market may be headed based on these numbers? “If I knew [that], I would be so busy acting on that information that I wouldn’t have time to speak to you,” says Haines with a chuckle. Still, it’s fair to say that where there’s a weak market, there’s space for negotiation.

1. Chelsea/Flatiron/ Union Square/ Hudson Yards
Average days on market: 162
Sales-price change from 2007: –36 percent
Closed sales versus inventory: 21 percent
The explanation: Feinstein says he was surprised to find Chelsea and the Flatiron atop the list. But the whole area’s not uniformly problematic. The main trouble’s in “Chelsea Heights,” the area more or less centered on 23rd Street west of Eighth Avenue. According to appraiser Jonathan Miller, in 2008 this area had “one of the highest concentrations of new-development activity. That’s what this is about: the skew in the far west where there’s a lot of projects to be absorbed.” High Line fans, consider making an offer in 2010.


2. Midtown/Midtown South
Average days on market: 149
Sales-price change from 2007: –27 percent
Closed sales versus inventory: 19 percent
The explanation: Many apartments here are pieds-à-terre, and that’s a weak market segment at a time when getting approved to buy a first home is tough enough. On top of that, a lot of new condos in the area were built specifically for that market, compounding the problem. That said, if you have the cash to buy with a minimal loan, opportunities abound.

3. Soho/Tribeca/Little Italy
Average days on market: 184
Sales-price change from 2007: –15 percent
Closed sales versus inventory: 11 percent
The explanation: Lots of low-hanging fruit here, so pluck away. The particular problem, Miller points out, is that much of the housing stock, both new and old, is made up of larger apartments, requiring bigger loans and more cash up front and therefore “very susceptible to the credit contraction.” For buyers who’ll have no trouble obtaining a mortgage, now may be prime time for loft-hunting.

4. Upper East Side/Carnegie Hill
Average days on market: 162
Sales-price change from 2007: –8 percent
Closed sales versus inventory: 18 percent
The explanation: Feinstein hadn’t expected this moneyed area, but the stats speak for themselves. The occasional buzz-heavy megasale seems to be obscuring the fact that the luxury market has been suffering. “There certainly are sales, but the activity has thinned quite a bit,” reports Miller. “Even though the decline in employment [in the city] wasn’t as high as expected, high-wage-earners were really hit.” Watch this space closely during bonus season.

5. Battery Park City/Financial District/South Street Seaport
Average days on market: 162
Sales-price change from 2007: –7 percent
Closed sales versus inventory: 9 percent
The explanation: Haines says he was struck by the low number of closings, especially in Battery Park City, where prices haven’t dropped much and “nothing’s moving. There seems to be a lot of unrealistic sellers.” Within this area, says Miller, the financial district is particularly bad off, because despite all the new building, the neighborhood, even after a decade, has never quite jelled. Given all the chatter about the neighborhood’s vulnerability, Bid On the City’s Raymond Villani says he’d actually expected the financial district to be higher on the list.