The seasonal pattern of the residential sales real estate market is coming back. After the Lehman Brothers crash in September 2008, we witnessed the financial storm taking place in front of us that interrupted the seasonality trends typical of NYC real estate. Starting this year, however, we are back to a strong spring sales season, followed by a slower summer, a good autumn and an expected physiologically weaker Winter Holidays period.

The third quarter 2010 Prudential Douglass Elliman report says that the average price of a Manhattan sale climbed 12.4% compared to the third quarter 2009; the median price went up 7.5% in the same period.
Nevertheless, there are still some buyers (able to buy!) that are hesitant and don’t pull the trigger.
I personally analyzed data collected by the appraisal firm Miller Samuel and I came to the following observations.
I have considered: the average price per SF of all Manhattan co-ops and condos sales (public data) from the beginning of 2007 to the third quarter 2010 and the average rental price per SF for the same set. Particularly I have dismissed data concerning apartments larger than 2 bedrooms, in order to have an homogeneous data set.
The two quarters worth noting are: the second 2008, the peak for both sales and rental prices, and the third 2010, the most recent. In this time frame the average sale price per SF went down 24% while the average rental price per SF decreased only 11%.
Basically we can say that the gross return on investment (if we consider to buy and rent the apartment right away as an investment) grew in the same period from 4.3% to 4.8%.
No need to think twice now.

Financial restructuring in regards to commercial real estate properties is rising. The issue of new debt tied to these kind of massive properties, after the 2007 $230 billion peak, dipped to $3 billion in 2009 according to Cantor Commercial Real Estate research.
Nowadays, instead, a good number of property owners and developers in NYC seem to be well positioned for refinancing a grand total of $20 billion worth of debt due in 2012.
Good luck to them; we certainly wish for them to succeed.

In the Manhattan commercial leasing sector, we report almost flat prices which are averaging around $40 per SF in the last couple of months with a slight increase between August and September 2010.
Experts in this field are happy about a renewed strength in activity from the poor levels of 2009.

Although Mayor Bloomberg didn’t reveal new plans for the development of New York City for several months, after he won his third and final office, he recently nominated his deputy to economic development: Robert Steel, who was formerly with Goldman Sachs.
The announced new urban redevelopment plan for the City will touch different areas: Willets Point, Governors Island and Moyhniahan Station (which is a joint venture with the State of NY); in addition to 578 miles of waterfront building construction improvements already made public in April.
Bloomberg is more determined than ever to leave a memorable mark in the history of this City; from the time he has took his first mandate in 2002, he has re-zoned roughly 25% of the NYC area and has no intention to stop.
A project worth noting is Hudson Yards, in the south west area of Midtown, near Penn Station, whose approval was passed under the former Bloomberg administration. The number of new buildings being scheduled for construction there in the next years makes it a point of interest for us, with an eye on good investment opportunities.

Meanwhile, the residential rental market is bouncing back, according to Miller Samuel data: in the third quarter 2010 there were 8,593 rental transactions in Manhattan versus 6,208 in the same period 2008.
The last months saw busier brokers especially at new rental buildings like 2 Cooper Square, near Astor Place. 2 Cooper is the symbol of a new trend to build rental buildings with quality standards that are close to the ones typical of condos.
Manhattan remains a place where many decide to rent; the average tenant is becoming more sophisticated and appreciates amenities and finishes that are normally found at newly developed condos.
It does not seem that the construction of new buildings, hence more inventory on the market, is negatively affecting prices. In fact, a Citi Habitats report says that the median price for a Manhattan rental apartment went from $2,950, in the third quarter 2009, to $3,000, in the third quarter 2010.

This is it for today, dear Friends.
I am always available to answer your questions and provide you with more information on your next real estate investment in the Big Apple.

Warm Regards,
Riccardo Ravasini