Manhattan home sales plunge

Photo credit: Urbanite

By Jason Fink

With Manhattan real estate prices now estimated to be down by as much as 20 percent since the summer, New Yorkers may sense an opportunity to buy in.

“I’m in the market to buy in the next year or two,” said Arzo Anwar, 31, who rents in the Financial District. “I’ve heard that prices have dropped.”

In fact, the current edition of the Federal Reserve Board’s Beige Book – an economic snapshot of various regions released eight times a year – paints a picture of a plummeting market.

“Transaction activity has dropped off noticeably, and there has been a large increase in the number of listings,” says the report, released earlier this month.

The beige book findings are based on an analysis by real estate appraisal firm Miller Samuel.

“It’s basically our observation that something that contracts today is selling for 20 percent less than something that was contracted for this summer,” said Jonathan Miller, the company’s president. “The milestone point was that one-week period when Lehman went bankrupt, Fannie and Freddie were bailed out and AIG was bailed out. That’s when we started to see a real tangible change.”He attributed the drop to a lack of available credit and the implosion on Wall Street, which has left many without year-end bonuses.

Lockhart Steele, the founder of the real estate Web site curbed.com, said 20 percent might even be too low.

“Behind the scenes, brokers are whispering even scarier numbers, like 30 or 40 percent,” he said.

Miller would not provide average sales prices, saying he would wait until the fourth quarter report is published.

The company numbers for the third quarter, which ended in September, showed an 11 percent drop in the average price of a Manhattan apartment, to $1.48 million.

Officials at two top real estate firms, Corcoran and Halstead, declined to comment.

In the world-famous Dakota, a luxury building on Central Park West, a 10-room apartment listed in October for $19.5 million, down 19 percent from its original $24 million in June.

“I’m not surprised by any of the statistics these days,” said Alex Sczesnak, 24, of the Bronx. “The recession hit us a lot later than the rest of the country. I guess it’s finally hit us here.”

The drop in sale prices may be forcing some into the rental market.

“Many of those having difficulty selling their apartments are putting them up for rent, boosting the number of rental listings substantially,” the Beige Book report says. “Average asking rents are reported to be down 1 to 4 percent from a year earlier.”

While some in the industry have been saying that Manhattan real estate would buck national trends, the crash now seems to be in full swing.

“It would be ludicrous for someone to think that New York wouldn’t be affected,” said Greg Easton, vice president of Kahr Real Estate. “It’s going to be a buyer’s market for a while.”

Aline Reynolds and the AP contributed to this story

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