(Read more on the multifamily market.)
NEW YORK CITY-Stribling Private Brokerage, a division of Stribling & Associates, notes continued low inventory and rising prices in the first half of 2007 for the luxury residential market in Manhattan, along with record-breaking sales of trophy properties, several at or above $50 million. According to Kirk Henckels, EVP and director of the brokerage and author of the mid-year luxury report, "$50 million is the new $30 million."
The report says that looking forward, when the financial markets stabilize, it is predicted that the residential real estate markets will remain strong due to the lack of supply and the sheer amount of liquidity, albeit reduced, among purchasers worldwide. "Without appropriate inventory levels, it does not matter how much money and demand there might be in a market," Henckels says. "The lack of supply puts a damper on the number of sales while forcing prices up. And there continues to be an extraordinary amount of wealth in this market, despite the current fluctuations."
The report highlights the following: there has been a drastic drop in the $5 million and up cooperative inventory--with even wealthy buyers finding limited choices in the market; many of the biggest deals have not closed yet--thus market strength may not be fully revealed until the last half of 2007; and the highest priced townhouse sale in the first six months of 2007 was downtown, a first for Manhattan.
Also, the lack of inventory has caused the volume of transactions over $5 million to drop for both cooperatives and townhouses, unlike the under $5 million end of the market where transaction volume has increased. The downtown luxury residential market has increased its parity with uptown--another first for Manhattan. The Manhattan buyers market has been driven by record amounts of liquidity--dominated by hedge fund and Wall Street professionals
The outlook for the final quarter of 2007 will depend on stabilizing the currently volatile credit markets and a continued positive economy. "The Manhattan residential market has continued to break records while most of the US markets have suffered," Henckels says. "But Manhattan is an international city and should be compared with London, not Mid-America."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
