New York Market Update: Manhattan Real Estate

New York Update:  Manhattan Real Estate

Manhattan residential real estate has been experiencing a significant downturn in values in the past year.  Since 2Q 2008, average co-op and condominium prices on the island have fallen a staggering 21.4%.  This negative momentum has remained constant with the 28.1% decrease in average prices since last quarter.

It’s not all bad news, however.  The number of transactions in the Manhattan marketplace has increased by 28.2% since last quarter.  This spike indicates a glimmer of hope; although, transaction volume has fallen over 50% since 2Q 2008.  With such a drastic depletion of activity in the market, some argue there is nowhere to go but up.

In commercial news, retail rents in Manhattan have decreased overall in the past year.  As indicated in the above table, all major New York City retail submarkets have experienced a decrease in rent with the exception of Times Square.  These rent decreases have actually allowing existing retailers to enter into markets they previously could not afford.

Commercial retail investment sales year-over-year price growth remains to be seen as transactions continue to close.  Thus far, however, average retail property investment sales prices have fallen approximately 56% as of 2Q 2009, as indicated in the graph below.