Happy Thanksgiving

Lower Prices and Buyer Demand

The Corcoran Report Manhattan Market Snapshot
(survey of Corcoran's own signed contracts)

Manhattan listed available inventory has decreased 24% since its peak in March 2009 and is now just above 9,300 units. Available inventory is at its lowest level in almost two years. This number does not include “shadow”, or unlisted and unsold, new development units.

Prices are down sharply versus the peak about a year and a half ago. The median price of all properties (condos and co-ops) has decreased 22% from its peak in April 2008, falling from $972,500 to $755,000.

Median price per square foot experienced similar declines, falling 16% since May 2008, from $1,043 to $875. But since April 2009, prices have slowly increased by 5%, with the exception of small declines in August and September due to typical seasonality in the marketplace. The rebound in prices is due to increasing sales of large luxury and new development residences.

At the peak of the market in October 2007, 51% of deals were made at the asking price or above. In comparison, in October 2009 only 13% of deals were at or above the asking price. However, October 2009 is a slight improvement versus April 2009, when only 9% of deals were made at or above the asking price. Sellers’ expectations and buyers’ views on pricing are becoming more aligned.

Over the past year, sellers have become more realistic with their pricing which has closed the gap between the original listing price and last asking price. The largest price adjustments were for two bedroom and larger residences, with adjustments averaging between 9%-11% versus 15%-20% last October.

To view the the most recent Corcoran Report please visit:
corcoran.com/thecorcoranreport

Tax Credit Extended To Include More Home Buyers

President Obama signed an extension for first time buyers and a new bill. The new bill includes an incentive for current home owners as well. The government will offer those buyers a credit of up to $6,500 as long as they've lived in their home for five of the past eight years.

The credit can only be claimed on primary residences purchased for less than $800,000 as long as they use the property as their primary residence for three or more years after the purchase. Buyers don't have to pay it back. Buyers can claim the credit on their 2009 taxes, even if the purchase was made in 2010 by filing an amended return.

Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify. An increase from the current $75,000 limit for individuals and $150,000 for couples.

Loan Limit and Home Buyer Tax Credit Extended

The House and Senate approved a continuing resolution including a provision to extend current FHA loan limits through next year.

The Senate announced they have agreed to an extension of the $8000 first-time home buyer tax credit through April 30, 2010. The tax credit was set to expire November 30, 2010.

The provision would keep in place current conforming loan limits of $625,000 ($729,750 in Manhattan and designated high-cost areas). Without approval from the Senate, those limits will expire December 31.