Consider this:  last month, a single family building on the Upper West Side was sold at a new record high for the area in its category – $20 million.
Sure, a lone transaction doesn’t mean much but given its peculiarity, it is nevertheless a symptom of the sophisticated buyer’s change in attitude towards the current market.

On the other hand: Potential sellers are starting to realize that the situation is not as dark as few years ago or even few months ago. Those who have bought a piece of  residential real estate before 2005 see now the possibility of  selling it at a profit, even if modest, and maybe investing in something more spacious.

If formerly almost every segment of the market was more or less stagnant, then nowadays sellers know that their Real Estate, if priced correctly, will be bought.
A buyer looking to purchase a luxury unit is starting to confront challenges because the inventory is already limited in the segment. But given the period of the year, we should expect an increase in inventory in the coming weeks and the best priced properties will be the first ones to go.
Attack!

Considering Manhattan Real Estate bought between 2005 and 2008 (PropertyShark data), we discover that units resold between October 2009 and January 2010 brought in 389 cases a profit and in 372 cases a loss. The same report says that there were 201 sold at a profit and 248 sold at a loss in Brooklyn.

There is a debate among Real Estate experts on whether the Case-Shiller index is applicable to the NYC market and specifically Manhattan.
This index, who many of you might know, is often quoted in articles and on TV; it comprises the 20 largest American cities and it is in essence (less known fact) a price gauge of single family dwellings.
It is generally regarded as a valid indicator of macro markets trends but some criticize its use when it comes to Manhattan given the diversity of Real Estate present here. In fact, the index does not consider the vast majority of inventory present here: 98% of the residential (for sale) market consists of co-ops and to a lesser degree condos.
Miller Samuel, a New York City appraisal firm that collects public data on transactions from the Department of Finance, shows a substantial gap between Case-Shiller data for the month of December 2009 as far as the New York City area goes; Case-Shiller indicates a 6.3% annual average price per unit decline versus Department of Finance data (the include co-ops and condos) compiled by Miller Samuel which show a 12.7% decline.

The Uptick
Meanwhile, a Prudential Douglas Elliman report tells us that between January and February of this year there has been a 23% increase in co-op sales and a 9% in condo sales.

A project worth noting in Brooklyn:
Barclays Center is a new 18,000 sits arena for the basketball team New York Nets located at Navy Yards.
Ground was broken last month with Mayor Michael Bloomberg’s blessing.
The huge complex is the largest single private investment in the history of Brooklyn and a New York City answer to the so-called recession!

Another positive factor is the reaching of the famous (or infamous) 50% of units sold by developers. In the past months many buildings faced difficulties because individuals found it hard to finance the purchase of an apartment in buildings which were not 50% (or more) sold.
Now many of these buildings finally reached the quota and financing can be guaranteed by Fannie Mae and Freddie Mac.
The result: Sales have picked up.
For example, the developer of the condo Hudson Hill, near Columbus Circle, says that the market has changed in the last 8 weeks. Before he was selling two apartments a month, but recently he had two sales per week.

This is it for today dear readers.
I am always available to answer your questions regarding your next investment in the New York City Real Estate market.
Till next time.

Warm Regards,
Riccardo Ravasini