New year energizes co-op market

Real Estate Weekly, Feb 24, 1993

With the start of a New Year generating a resurgence of sales activity, purchase prices of luxury Manhattan co-ops and condominiums nudged upward in January, with the average cost of an apartment rising from $75,534 to $75,613 a room. A year ago, the Corcotart Price Index was $75,670 per room.

So reports the February issue of The Corcoran Market Update, a monthly survey highlighting fast bzeaking trends in .the New York co-op and condominium marketplace prepared by The Corcotart Group, a leading Manhattanbased real estate firm specializing in luxury residential sales.

Based On data from listings and compieted purchases that took place during the preceding 30-day period, The Corcoran Market Update reported a mix of asking prices by unit size for the 6,803 luxury apartments it tracked citywide last month.

For example, average asking prices for two-bedroom apartments (4.5 rooms) rose by .5 percent to $413,000 while larger two bedroom units (5 to 6 rooms) dropped by 1.4 percent to $684,000. Overall, asking prices for all units were down by .8 percent for an average price of $523,593.

Among the findings reported in the latest Corcoran Market Update were:

* Buyers were able to negotiate asking prices down by 18.2 percent during January compared to 19.5 percent during the same period in 1992

* The average listing time for apartment sales during the month was 27 weeks the same figure as last year

* Average asking prices continued to vary dramatically by location. The price per room of a Fifth Avenue luxury residence (above 60th Street), for exampie, was $247,492 compared to $199,123 on Park Avenue and $76,064 on West End Avenue

* The average luxury co-op/condo buyer last month was 55 years old, had an average income of $250,000 and made a purchase of $557,000

Mortgage Rates

After falling in December, interest rates for New York luxury co-ops and condominiums showed across-the-bo ard declines in January.

So reports The Manhattan Mortgage Company, a leading specialist in co-op, condominium and private home residential financing, which surveys and analyzes New York mortgage rates and borrower preferences on a monthly basis.

According to its January report, which is based on data from 10 major lending institutions, all serving the New York residential marketplace, rates fell for the three leading fixed-rate mortgages and the three most popular adjustable rate mortgages in January.

In the fixed-rate category, 15-year fixed-rate mortgages dropped from 8 percent to 7.75 percent, 30-year fixedrate mortgages fell from 8.5 percent to 8.25 percent, and seven-year fixed-rate mortgages dipped from 7.625 percent to 7.375 percent.

In the adjustable mortgage category, one-year adjustables dropped from 5.5 percent to 5.125 percent, three-year adjustables fell from 6.875 percent to 6.625 percent and five-year adjnstables dipped from 7.5 percent to 7.375 percent.

According to Melissa Cohn, partner of the Manhattan Mortgage Company, the drops in interest rates can be attributed to positive economic data released in January that shows inflation is under control, the bond market rally, and optimism about the new presidency.

"There are high expectations of a revival in the residential real estate market fueled by lower interest rates and positive news about the economy, said Cohn. 'Activity in the residential market has already picked up and there has been a dramatic increase in the number of people purchasing.'

In terms of loan preferences, The Manhattan Mortgage Company survey reported that 34 percent of co-op/condominjure borrowers chose 30-year, fhxed-rate mortgages in January, while one-year adjustable rate mortgages accounted for 33 percent of the marketplace.