In relation to the rest of the country, one might think that the real estate market is booming in New York City, and more specifically, the Upper East Side. While the stock market continues its wild swings at treacherous speeds, and unemployment concerns are plentiful in other areas, we saw a higher volume of coop and condo sales this past quarter. Mortgages are harder to get, as lenders continue with stringent qualification standards, but that hasn’t stopped people from buying.

There were a lot of middle market "shoppers" in the first half of the year and they finally started pulling the trigger in June. Studios, one-bedrooms and low priced two-bedrooms are selling. Business seems to come in waves, as current estate activity is now strongly related to consumer confidence of the moment. We are seeing a brisk market following periods of inaction, followed by another wave of interest. Buying conditions remain favorable, and Harlem is a hot market now that developers have slashed prices to the bone. Prices have adjusted in all other areas on the West Side as well. And interest rates are crazy low. The wonderful thing about real estate is that there is always someone who needs to move, for any number of reasons. And, of course, everyone wants to own their own piece of Manhattan. If buyers purchase now and hold on for a few years, they will have made the right decision.

At some point the tables will turn — then it will be more economical to buy than to rent.

The single most interesting market trend for the third quarter are the LOW INTEREST RATES! Fixed rates are 4% and ARMs are 3% and below! Let’s say that today you wanted to lock in a 7-year adjustable rate at 3%. Your monthly payment would be only $421/month for every $100,000 that you borrowed. If you need a place to live and don’t want to throw your money away on rent, take advantage of the soft real estate market and lock in a low rate while you still can. At some point prices will start going up and so will the rates. It may give you comfort to know that the prices in the Gramercy/Chelsea area have remained stable over the past year while the stock market and world events have been otherwise erratic. Inventory is still surprisingly low and looks to remain that way for awhile.

Middle market properties have shown to be the weakest segment. Only those buyers and sellers who "have to move" are motivated and real. The high end remains fairly strong, bolstered by a lack of quality inventory, especially in the larger condo market. The modest end of the price scale is seeing demand and volume that is most likely fueled by the new, all-time record lows in mortgage rates, which is most meaningful to those buyers. Yet those sellers are just happy to see the volume pick up, compared to the slow first half of the year. Properties that are selling best are those that are pristine, and are priced tight and right! In Midtown it is a buyer’s market, especially in the broader middle. The West 50s, Gramercy, Sutton Place, among others, are firming. The opportunity for buyers is now. The future is always bright. And look for a future surprise — an explosive, strong market that no one expects.

While the fall season so far has been peculiar, partly because of the strange weather and partly because the Jewish holidays are later than usual, business in downtown Manhattan has been only a little slower than in the spring. Our average sale prices have continued to decrease slightly, reflecting heavy activity in the first-time homebuyer segment. And average prices have also decreased almost across the board. This shows that the buyers are still in control in most segments and are putting pressure on the sellers. The sellers who are realistic are responding. The one exception is the 3-bedroom segment, where prices have increased. Buyers are still looking for larger apartments, and in the downtown neighborhoods, they aren’t easy to find. We expect that once the Jewish holidays are behind us, the volume of transactions will increase and stay strong through the fourth quarter.