NYC Condo Prices Shrink in First Quarter

Condominiums in greater New York City aren’t exactly reasonably priced compared to the rest of the country, but they’re going for a little less these days. According to a report released by the Real Estate Board of New York, the average condo sales price in the city during the first quarter of 2009 was about $1.16 million, a 10 percent drop from first quarter 2008 prices. “The declines were to be expected given the economy,” REBNY president Steven Spinola noted in a prepared statement. “However, we must keep in mind that for a time New York City remained insulated from the housing market declines in other parts of the country.” While the overall average price of condos in New York City was down, units in certain submarkets carry much bigger price tags than they did one year ago. Buyers will experience sticker shock in Queens, where the cost of units increased 21 percent, and on Manhattan’s Upper East Side, where prices soared 25 percent over the last year. The most significant change occurred in the TriBeCa neighborhood, which saw condo prices skyrocket a whopping 57 percent. In some parts of the country, condominium property owners watching prices decline have taken to converting for-sale units to rental residences in an effort to get more bang for their buck. However, with apartment vacancies on the rise, the benefits of going this route in New York City are unclear. According to numbers from commercial real estate research firm REIS Inc., the apartment vacancy rate in the New York metropolitan area increased 1.1 percent from the fourth quarter of 2008 to the first quarter of 2009, marketing the area’s biggest single-quarter increase in 10 years. Despite current challenges, the sentiment in New York regarding the future state of the condo market is positive. “We are hopeful that the actions in Washington coupled with New York City’s unique assets will bring credit and confidence back into the market,” Spinola said.