Third-Quarter Market Reports: Good News, Kind Of, Sort Of

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All those reports of active open houses—compared to the way it’s been, anyway—this summer? All true, as it turns out, according to Manhattan market reports released today by pretty much everyone who crunches numbers in real estate. But no one’s declaring a full recovery just yet. According to the Prudential Douglas Elliman’s survey, compiled by appraiser Jonathan Miller, transactions rose by 45 percent from 1532 in the previous quarter to 2230. But that’s still 16 percent off compared to the same time last year. Why the relative bustle when summer’s usually the slowest time of the year? (Spring is usually where the action’s at.) “This year the peak level of activity was pushed forward three months to the third quarter as a result of the frozen market conditions last fall beginning with the 9/15/08 market tipping point (Lehman bankruptcy),” Miller writes. “The “spring” market effectively occurred this summer reflecting a release of pent-up demand, improved consumer confidence buoyed by a rising stock market, record low mortgage rates, increased affordability and the first time buyers tax credit.”

Other sort-of good news: Average and median prices are still down, but “the rate of decline was less than the prior quarter,” per Halstead Property’s study. (For the record, they say average prices are at $1,274,563, median prices, $781.000. 2008’s numbers: $1.473 million and $910,000, respectively.) Median for new developments—the most embattled sector—actually crept up 1.8 percent compared to the previous quarter, per Streeteasy. The picture’s even rosier compared to same time last year, average-price-wise: Those went up 23.1 percent. Inventory’s slowly declining, too.

There are caveats galore, however. Like this: It’s taking even longer to unload apartments. That stat is up from 134 days in 2008 to 167, according to Miller. The number of broken contracts rose 7.6 percent—from 132 to 142—this quarter from the previous quarter, too. Sofia Kim, Streeteasy’s director of research, says first-time buyers who don’t have to wrestle for jumbo mortgages have kept the market afloat. But where we’re going, nobody knows: Unemployment is still rising, she points out, and prices are still falling. Writes Miller: “Due to elevated unemployment levels, shadow inventory and tight credit, the Manhattan housing market can best be characterized as “turning the corner” but has not yet found a “bottom”.’