Rentals soften, but sales strong in post Sept. 11 housing market

Real Estate Weekly, Oct 16, 2002

The most significant trend this year in New York City real estate has been the dramatic recovery of the market after the mid-year 2001 recession and the terrorist attacks. The events of Sept. 11 produced the perception among buyers that the bottom of the New York City real estate market had arrived.

In fact, only rental prices have softened over the long term. By the beginning of December 2001 a significant resurgence in the sales market was underway. Thanks to a 30-year low for mortgage interest rates and a renewed national and international interest in New York City, Manhattan benefited from a period of record sales during the first two quarters of 2002.

* The neighborhood of TriBeCa, the subject of particular scrutiny due to its proximity to the disaster site and its high priced and high profile real estate, rebounded quickly. Any negative impact on real estate vales in this neighborhood was mild and short lived. TriBeCa home values are higher today than pre-Sept. 11.

* Corcoran Group data shows that TriBeCa's average price per SF in September 2001, prior to the 11th, was $598. After Sept. 11 the average price per SF fell to $530. Currently the average price per SF is $672, a 12.5% increase over the pre-Sept. 11 price per SF and a 27% increase over the post attack price.

* Battery Park City and Wall Street, the backyards to the disaster site, were hit hardest by the events of Sept. 11. Prior to the attacks the average price. per SF was $450. After the attacks the price fell to $418. As of August 2002. the average price per SF was $437, a -2.9% decrease of the pre-Sept. 11 figure and a 12% rise over the post-Sept. 11 statistic.

* As of August 2002 properties in Battery Park City and Wall Street sold after an average 38.5 days on the market. The average negotiability factor for these sales was -2.6%, proving that properties are selling faster and receiving their asking price.

* Manhattan real estate gained record breaking figures in the second and third quarters of 2002. In April 2002 price per SF for all property categories combined was a record breaking $696.24. Additionally, a record of $202,880 was set for price per room for condominiums and co-ops combined. The average price for two-bedroom Manhattan cooperative and condominium apartments combined reached record levels in July of 2002 to $999,532.