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Home Price Declines Accelerated in Fourth Quarter, New Report Says
The Wall Street Journal
Dawn Wotapka, February 3, 2009.
Manhattan sellers’ pain is becoming buyers’ gain: The financial
capital is a experiencing a “dramatic slowdown,” according to Mitchell,
Maxwell & Jackson Inc., a New York residential real estate appraisal company.
Prices have crumbled 15-20% from their peaks — with declines likely to
continue — returning the market to price tags last seen in 2005.
“Buyers are in control,” said Jeffrey Jackson, co-founder of MMJ.
After analyzing more than 350 contracts inked since Sept. 1, Jackson found that
the fourth quarter’s contract volume plunged a “horrific” 75%
from a year earlier. Because contracts take time to close — particularly
in the brutal world of co-op board approval, this foreshadows just how tough
the first quarter may be. Many deals negotiated before September have been redone
at lower prices, while inventory levels are “ballooning as absorption of
new developments drops off.” (See inventory data for New York and other
metro areas.)
In the fourth quarter, 2,223 condos and co-ops closed, a 35% drop from a year
earlier, based on data from The Real Estate Board of New York, a trade group.
From the first quarter, the average price of condos and co-ops fell 11.5%, hitting
$1.37 million in the fourth quarter. The median price for condos and co-ops
meanwhile, peaked in the second quarter at $920,000 before plunging 17.8% to
$757,000 in the fourth quarter. Year-over-year comparisons were not available.
“Retreating values are now clearly broad-based and affecting all neighborhoods,
price points and property types,” Mr. Jackson said. But, he adds, there
is hope. Contract signings have inched up in the last two weeks, as some sellers
finally get realistic with pricing. “There are some rational sellers,”
Mr. Jackson said.
