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What does the second quarter Manhattan market report mean for co-ops?

Leaving aside the “median” price — which is easily skewed by high-end inventory cycling through the market, and means nothing to you because you’re probably not buying or selling a “median” house — the Miller Samuel 2nd quarter report was very mixed.

Co-op sales are still historically high — while the number of transactions was down some 20% from the first quarter, it was still the third-highest quarter for volume in the past three years. This says something about the credit crunch, because sales that closed in April were deals that were done in, say, December or January, so it means that buyers managed to get financing even after the awful credit squeeze of last summer.

However, inventory has soared, with more than 3,000 apartments available. This reads to me like sellers fear that the market is declining, and they all want to “pile in” and sell while there’s still time.

Logically, this should produce downward pressure on prices. There is more flexibility in the numbers, with the listing discount expanding to 3.9% from 1.7% a year before. Co-ops are moving a little more slowly, too, with average days on market expanding to four and a half months, up from about four a year ago.

In a situation like this it’s going to be all about interest rates, and if rates bump up, sales will slow even more. If we continue to have decent (6 percentish) money, co-ops will keep moving, despite everyone’s doomsday predictions. Buyers should not be looking to lowball for 15% off deals, but should concentrate on arming themselves with information so they can get their pick of properties at nice single-digit discounts.

Sellers, meanwhile, should realize that they are in a very crowded field, so it is even more important to pick a good market position and stick with it.

Posted in For Buyers and For Sellers 12 years, 1 month ago at 11:12 am.

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