- A fly in the ointment- job losses:
Higher unemployment is definitely weighing down our market: ~23%-of NYC salaries are tied to the financial sector and we all know that™s restructuring big-time, leading to fewer transactions. The City™s Budget Office expects our financial sector to lose more than 33,000 jobs from the 2007 peak through mid-2009.

The recent uptick in our real estate activity could just indicate pent-up demand- like the Standard & Poor™s 500 stock index surging more than 30% since its March 2009 lows- proving that yes, markets tend to have a real emotional component (not to mention the liquidity impact from gargantuan global government monetary stimulus packages that also propelled stocks indirectly). It™s just that stocks feel like they™ve come too far, too fast.

- The Big Apple™s not bullet-proof:
No one really expects Manhattan to perform like Phoenix (down 50% from its 2006 peak), Las Vegas (down 48%) or Miami (down 45%), BUT New York City isn™t immune from the impact of a national recession either. In fact Manhattan œlisting inventory through early spring increased over 30% from 2008, say local appraisers.

Another key measure, œabsorption, (the number of months™ supply) also deteriorated, and is now over 13 months, after averaging 9 months since 2000.

Now. unlike in 2007, when 30% of all Manhattan condos were bought by non-U.S. buyers, we no longer have a weak U.S. dollar to attract as much non-U.S. investment. Also capping demand: the International Monetary Fund predicts the world economy will shrink by 1.3% in 2009- ouch!! (2.5%-3% growth is healthy).

- Focus on fundamentals: prices are just stickier in Manhattan:
On the upside, Manhattan™s real estate market has a big supply/demand imbalance: Manhattan™s population is ~1.6 million yet total current listings total 12, 011 units. Only about 30% of residents own their own home, and not too surprising: the median sales price of a Manhattan condo resale last quarter was $985,000, for co-ops: $587,500.

Co-op buildings™ solid financials have also helped Manhattan avoid big price drops. The buildings™ boards can scrutinize the daylights out of a potential shareholder and set a high bar for buyers: I know two Park Avenue buildings that require applicants to have at least 10 references & 4-5 times the value of their apartments in cash after closing. Even some of our most well-connected clients can get sticker shock!!