REAL ESTATE
Manhattan for Less
By Stephen Hirst
F
or New Yorkers there are certain
specific bellwethers, unique to the
city, which indicate the economy
is in trouble — and most of them mean
bad news for the average Joe. The truly
alarming rise in the price of an average
slice of pizza is one; the impending fare
hikes for public transit and Governor
Patterson’s proposed tax-on-everything
are others. Of course a few of these tell-
ing indicators can actually be beneficial
to the majority of us, such as the recent
Luigi Viscome, a mason, works on a new condo building in Brooklyn. In 2009, property
values may continue to drop, and construction may slow.
88 • Resident The Week Of January 06, 2009
plunge in gas prices. Even better news
is beginning to trickle in for those New
Yorkers looking for new digs (which of-
ten seems to be roughly 90 percent of the
citizenry), according to the latest infor-
mation gathered by the Federal Reserve:
home prices in Manhattan are becoming
slightly more reasonable.
That’s right, hell just froze over. Af-
ter years of collecting exorbitant fees
and outrageous prices from hapless
transplants, real estate brokers in New
York City may actually have to do a
bit of belt-tightening. According to the
most recent edition of the Federal Re-
serve “Beige Book” report released on
December 3rd, “both residential and
commercial real estate markets have
softened substantially since the last re-
port, most notably in Manhattan.”
Specifically, the Fed report city fig-
ures from a major residential appraisal
firm indicating that prices for co-ops
and condos in Manhattan have fallen
anywhere from 15 to 20 percent. The
rates of office vacancy in Manhattan
inched upwards as well, rising half-a-
point in the month of October.
Although this looks like the tip of
the iceberg to some, others hesitate to
attach much significance to the report.
“The beige book is more of an anec-
dotal overview of all the member banks
in the Federal Reserve System, which
touches on all different segments of the
economy,” noted Jonathan Miller of
real estate appraisal company Miller
Samuel Inc.
“This is a ground-level view of
what’s happening, and it’s more like an
advance indicator of what’s ahead.”
Miller paints the new figures as more
reflective of a generalized downward
trend caused by the recession. “We’re
seeing a slowdown in activity across the
board, in all sectors, and that is clearly
what we’re reading about here.”
Wall Street employees make up a
significant percentage of the clients for
many brokerages, and Miller notes that
their bonuses act as a precursor of vari-
ous economic activity and price trends.
“We’ll have to see what happens after
the first of the year, when the drop in bo-
nuses becomes more tangible.” While the
last four or five years have seen record-
shattering bonus packages, Miller adds
that current projections show that this
year’s will likely see a precipitous drop.
One seemingly positive sign for bro-
kers is a reported rise in attendance at
open houses in December, which is typi-
cally one of the slower months. This has
led to speculation that the real estate
market bottomed out in November and
business as usual will soon resume, but
that’s a thin branch for brokers to place
much hope on — there’s no way to tell
how many of those open house attendees
were serious buyers, and how many were
just trying to get in out of the rain for a
couple of hours.
AP Photo/Mark Lennihan