ResalesManhattan Home Prices Flat
Smaller, lower-priced properties are selling well but overall the Manhattan marketplace has plateaued, says a local Realtor.
"A recap of 2002 shows that the Manhattan real estate market was one of excellent activity at the lower end-studios and one/two bedrooms, and slower at the upper end," says Realtor Michael Beam. "All in all, prices were stable and there was not a drop, as some buyers had hoped.
"This plateauing of prices was caused by the uncertainty of war and the continuing recession," explains Beam, "offset by record setting low mortgage rates. Uncertainty caused "time on the market" to increase from 119 days to 151 days. Now that war is a certainty, if it resolves quickly, the stock and real estate markets will boom, and prices will boom as well. We live in interesting times.
Beam suggests historical statistics of interest. "Average square foot price of Manhattan coops and condos was $53 in 1970. By 1999 that average was $450. In 2001, it was in the mid $600"s.
"Real estate investors of all sizes and sophistication are having to accept lower cap rates for properties as a result of the historically low interest rates causing more demand than supply and thus acquistion costs rise, gross rent roll multiples increase. Cap rates of 3-5 percent and RR"s of 12-15 are common in Manhattan now as opposed to 8-12 percent and 8-10. The cap rate situation is compounded by the very soft rental market across all markets except retail. This has existed for about a year and a half."
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