Manhattan Takes a Tumble

Posted by: Chris Palmeri on October 3, 2008

The latest real estate sales numbers from the Corcoran Report show that the Big Apple, long thought to be immune from the housing slump, suddenly has that sinking feeling.

Home sales were down 34% in the third quarter. The median price of a condo still climbed 10% to $975,000, but that was entirely driven by some of the fancy new properties coming on the market. Those buidlings were benefiting no doubt from the cheaper dollar and wealthy foreignors looking to invest in one of the world’s greatest cities. Prices of resale property—condos that had already traded hands before—were flat at $850,000.

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The national market followed a similar path last year, with transactions falling but market prices still climbing. That’s unsustainable though, especailly given all the carnage on Wall Street and its impact on jobs and pay in New York City.

So just how much will that dream townhouse on the Upper East Side cost you? $10 million, up 37% from last year. And the cool loft in Soho? They are down 26% in price but will still set you back $1.3 million. Wait a few months.

 

About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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