The real estate correction in Manhattan starts now

In an earlier post on why I would not buy a home in Manhattan in 2009, I wrote

“Besides, most of the job losses in New York city were from Q3 2008 to Q2 2009. Severances are only just going to start running out. The impact of the job losses on real estate are going to be felt in the latter half of 2009, preparing the way for a correction of home prices for 2010 and later.”

On the 2nd day of the latter half of 2009, Bloomberg has an article titled Manhattan Apartment Prices Drop as Lehman Hits Home. An excerpt

Manhattan apartment prices dropped for the first time since 2002 in the second quarter as the collapse of Lehman Brothers Holdings Inc. and Bear Stearns Cos. caught up to property owners in the nation’s most expensive urban market.

The median price fell 18.5 percent from a year earlier to $835,700, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales plunged by half, the most since Miller Samuel began keeping data in 1989.

“The standstill that existed after Lehman Brothers has been broken, and it was the sellers that cried uncle,” Pamela Liebman, chief executive officer of New York-based property broker the Corcoran Group, said in an interview.

Values are falling broadly in Manhattan for the first time in the almost four-year U.S. housing recession, with declines now seen in co-operatives and condominiums of every size and price. Private-sector employment in the city dropped by 91,200 jobs, or 2.8 percent, in the 12 months through May as Wall Street losses and asset writedowns topped $1.4 trillion.

The price of studio apartments declined 16 percent from a year ago to a median of $405,000, according to Miller Samuel. One-bedrooms dropped 17 percent to $650,000 and two-bedrooms fell 23 percent to $1.27 million. Three-bedroom units fell 37 percent to $2.35 million and four-bedrooms plummeted 47 percent to a median of $3.92 million.

The full article is here:

Manhattan
Manhattan Apartment Prices Drop as Lehman Hits Home

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