The investment property sales market in New York City was slightly improved in the second quarter of 2009 (2Q09) versus the first quarter of the year. That being said, it couldn't possibly have been worse than 1Q09 during which we saw the paralysis of 4Q08 manifest itself in a 1st quarter volume which we needed a microscope to see. However, even with an improved 2nd quarter, the first half of 2009 (1H09) was still a major disappointment for those of us relying on transaction volume for a living.The total dollar volume of sales in NYC for 1 H09 was approximately $2.8 billion. This figure was down 81% from the 1H08 total of $14.47 billion and down a whopping 92% from the peak half year of 1H07 during which we had $35.8 billion in sales.With regard to the number of transactions,  in 1H09 we had 562 closed transactions. This figure was down 65.7% from 1H08 and down 75.3% from the peak half year of 1H07 during which we had 2279 sales closed.Because some transactions involved multiple properties, we also track the number of individual properties which have been sold.  In 1H09, 670 properties were sold.  This figure is down 64.5% from 1H08 and down 75.5% from the peak half year of 1H07 during which we had 2738 properties change hands.To put these sales figures into perspective, we must look at historical averages and milestones. Since 1984, we have tracked a statistical sample of investment properties in New York that constists of 125,000 properties. Over a 25 year period, the average turnover rate has been 2.6% with the all-time low level being 1.6%. The 1.6% level was hit in 1992 and again in 2003. Both of these were years at the end of recessionary periods and were also years during which unemployment  reached cyclical peaks. We always assumed that this 1.6% turnover level was a "base line" which consisted only of people who were forced to sell because of death, divorce, taxes, insolvency, partnership disputes, etc. If we annualize the activity during 1H09, the turnover percentage is running at 1.07%!! We anticipate that activity will pick up slightly during 2H09 but that we will still hit a new record low of 1.2%-1.4% for the year.Values are also taking a hit as office and retail properties have seen cap rates increase 200 to 250 basis points above their lows. The multifamily sector has held up the best with cap rates only about 100 basis points above their lows. In fact, in the Manhattan market (south of 96th street on the eastside and south of 110th street on the westside) during 1H09, walk-up buildings saw average cap rates of 4.58% with the elevatored average hitting 4.08%. Upward pressure on cap rates is present in every sector of the market.In general, the New York City building sales market has seen a reduction in activity and value. The trend has certainly been towards smaller transactions, for which there is plentiful debt available from community and regional banks. We have also seen a resurgence of high net worth individuals and old-line families who had been overpowered by operators backed by institutional calpital for the past several years. We anticipate the volume of sales increasing slightly as we move into the second half of the year. Based upon current market activity , we expect volume to increase as prices drop due to eroding fundamentals caused by increasing unemployment.(For a copy of the 25 year study or to recieve borough by borough building sales reports for the first half of 2009, please feel free to email me and I will be happy to send them to you)