Manhattan Housing Descent Has Begun

The expansive staff here at Running of the Bulls have been of the opinion that if the national residential housing market was not at the bottom, then it is closing in on one.

However, we have been at pains to note that even though the national data may be in the process of bottoming, the regional data bore wide disparities. Florida and California, for example, were probably at a bottom. Manhattan, however, was just at the beginning of their descent.

And now, the Manhattan descent has begun.

Manhattan apartment prices dropped for the first time since 2002 in the second quarter as the collapse of Lehman Brothers Holdings Inc. and Bear Stearns Cos. caught up to property owners in the nation’s most expensive urban market.

The median price fell 18.5 percent from a year earlier to $835,700, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales plunged by half, the most since Miller Samuel began keeping data in 1989.

A significant decline in Manhattan is inevitable, in my humble opinion. Bad for those living there, good for everyone else. The roadmap for the national/international housing collapse has its end when the last market standing falls. As every student of market history knows, in a severe bear market, the bear mauls everyone. Nobody is spared.

For the bear market in housing to end, Manhattan apartment prices had to fall. That is now happening. And unfortunately for those in New York, it still has some ways yet to go.

Comments

[Mad Hedge F...:]

I'm amazed that it has taken this long. The Manhattan residential market is now in free fall, after holding up better than every major market in the country for years. Rents have fallen up to 25% since the Lehman bankruptcy in September, dragging down condominium and co-op prices almost as fast. Hardest hit have been units priced in the $1-$2 million range that appealed to up and coming Wall Street traders. This class of newly unemployed former owners is now fleeing the Big Apple en masse. The stratospheric end of the market, the mega mansions and penthouses with those fabulous Central Park views and live-in nanny suites in the $30 million on up range, are still holding up. With financial industry job losses this year expected to exceed 100,000, expect this downtrend to continue.

Jul 02 12:26 PM

[jeandit75:]

No bull$hit article from Perry today, strange...

Jul 02 04:16 PM

[Accuriz:]

Apples and Oranges.

We keep comparing apples and oranges. Manhattan is one of the most complex housing markets in the United States. Values can change from one building to the next, within a building on a floor by floor basis.

Simply amazing that the most complex market is being valued by such limited data. Condo values on a per square foot basis, what floor, what amenities?. (doorman, views, balconies) Co-Op (ownership of share in a company). What type, studio, one bedroom, two bedroom, what is monthly maintenance fee, what is debt of building, is it a doorman or non doorman. What amenities.

Believe me there are more questions than just one.

Let's keep going with comments about a declining market because that is the "In thing".

Frankly, I am tired of the herd mentality and I can not wait to see intelligence come forward.

Analyze the data!! Oh, that takes effort, time and money.

Thank god there are a few of us that do that !

Jul 03 11:09 AM

[D. McHattie:]

And why in the world would housing in Florida and California be at the bottom? Just because they're down 50% from their highs?

If the highs were unreal, founded only on bubble expectations and free and easy credit for anyone with a pulse, then any comparison to those highs is also invalid.

Housing prices will always come down to incomes. And both California and Florida are in the midst of state depressions that are only increasing in severity.

Incomes still do not support current price levels. Not in Manhattan, not in Florida and not in California.

Jul 04 01:48 PM

[MaxWeber:]

New York as a city may see something of a downturn as the London/NY financial axis has been destabilizing for some time. With the behavior of the two spheres becoming less and less coupled, it could mean a long term downward pressure on economic activity in the upper and middle ranks of New York's residents.

Jul 04 02:35 PM