Many buyers waited for prices to fall and then waited a little longer. The time was obviously right this past quarter because the number of sales was up over last year.  Prices are holding steady and there have been quite a few properties out there with multiple bids.

A few years ago we were used to seeing a “good” coop or condo being snapped up in the first week on the market.  It is actually happening again!  Low supply and reduced prices are a sure combination for the return of this situation.  Another pleasant surprise for sellers is the fact that properties that have been on the market for a long time have started to sell in large number.  Some of those apartments have been on the market for over a year.  Of course, during the year prices were coming down gradually. In the end, the substantial decreases led to closings. 

We have seen that sellers lowered asking prices by as much as 20% over the height of the market.  While some buyers continue to make low bids, we now see apartments trading much closer to the asking price.  In the past 6 months sales have been steady, if not booming.  We expect a strong first quarter this year on the Upper East Side. 

The Upper West Side ended December with a flurry of activity. This activity was propelled by many of the same factors that have been present throughout the year: low interest rates, stimulus package tax credits, 20% plus price reductions and the belief by buyers that we are at the end of the price slide. These factors, coupled with the fact that sellers started to price their properties at competitive levels, created a strong fourth quarter and a strong December.

The strength of the market is clearly in the low-to-middle price range. Studios are now affordable to buyers who were previously priced out of the market, and some 1 bedrooms are priced at what was once a studio price. Buyers are getting more for their dollars -- and if they are buying for long term, it’s a safe bet to purchase.

We predict more of the same for 2010, until interest rates start an upward movement. The additional costs resulting from higher financing rates will put pressure on prices to remain low. With the current stimulus tax credit until the middle of the year (check with you real estate agent for dates and details) and low price points (which are expected to remain low for some time), it is a good time for buyers, who are “educated consumers” looking to get the best value for their investment. Sellers who aren’t under pressure to sell will keep their homes off the market.

For the better part of 2009, there was the "let's wait and see" mantra. There were very few transactions in 2009, about half of what would occur in a normal market.  There was a surprisingly low inventory of properties for sale matched by very few people willing to step up and buy into an uncertain economic environment (otherwise known as the “window of opportunity”). In the last quarter of 2009, better news starting trickling out. It seems that the worst is behind us. Many of those fence-sitters are venturing out and looking for a new home. 

Activity in the fourth quarter of 2009 was significantly better than in fourth quarter 2008. Still not as strong as we've seen in previous years, but the trend is up!  December, usually the quietest of the 3 months, was the strongest of all.  That is most promising for 2010.

So, here's the good news:  Real estate prices have stabilized somewhere between 20%-25% off of their all-time highs; interest rates are still in the 5% range; there are bidding wars on well-priced units and strong demand in prime locations; stock portfolios are recovering nicely.  And let's not forget about the Wall Street bonuses, coming soon!

The fourth quarter of 2009 started fairly strong and petered out as we got into the holiday season. Midtown prices have not adjusted as much as some of the primary areas, reflecting some end-of-year pricing reality. What we are seeing is that when properties are well-priced, buyer activity and sales are fast and assured. If a property is not well priced and perfectly presented, "do not pass go, do not collect $200.”

Total inventory is a bit tight and sales are occurring mostly in the moderate end of the market, with the very high end still on hold. Mortgage interest rates below 5% have helped, but we have not seen much of an impact from the Federal tax rebate programs; most buyers in the Manhattan do not qualify because income levels are above the mandated thresholds. Foreclosures are still scarce, but concessions from sponsors and distressed private sellers are obvious.

Sellers have to price their properties right, and brokers have to work extra hard – and still, both need to get lucky to get the proper buyer and have the sale go through. Financing is getting tougher and longer, and everyone involved is requiring that all the T’s are crossed and the I’s are dotted.

We see the fourth quarter of 2009 as just an inflection and believe that 2010 will present a slow but steady ride upward both in inventory, prices and activity.  As they say, be greedy when others are fearful and fearful when others are greedy.

Last quarter, we reported that activity in the Downtown market started to pick up at the end of the summer.  By the end of the fourth quarter of 2009, it has increased significantly.  We're still not at the level that we were at the peak last spring, but we are a little bit closer. 

We are seeing average prices increase slightly in most categories.  This is due primarily to deals being done at the “right prices,” rather than reflecting increased pricing.  In the first and second quarters of 2009, buyers were only pulling the trigger when the sellers priced their properties at rock-bottom.   We still don't believe that prices will increase substantially any time soon.  So it remains an excellent time to be a buyer.

As we look at the year, quarter over quarter, the normal seasonal shifts in activity have proven to be turned on their head.  We predict that buyer activity will remain strong throughout the winter of 2010. As for the inventory of available apartments, it is surprising that we have seen a continued decrease since the first quarter of 2009. It will be interesting to see if inventory begins to increase toward the spring, as it would in a normal season. 

If you are thinking about selling, take advantage of the decreased inventory level and the increased buyer activity -- hurry, put your apartment on the market right away! If you are a buyer, now's the time to pull the trigger!  Happy New Year!