According to Olshan Realty Inc, the week ending February 13th marked the best week for Manhattan luxury properties since the collapse of Lehman Bros in September of 2008. Thirty-one contracts were signed on properties asking more than $4mil for a total of $207mil in gross sales and an average sales price of $6.7mil. Brokers have been talking about a return of the luxury market since November of last year, but the question remains as to why the demand would have been released in one seven day period. Perhaps buyers just started braving the open house circuit again after the January weather shut down the city. Perhaps Wall St. bankers were simply waiting for their bonus checks to clear. Or maybe, Mercury was in retrograde last month and astrologically savvy purchasers were waiting for the right stars to be aligned. The point is, we don’t know – but there is reason to be optimistic about velocity in the high-end market.
The Dow Jones recently surpassed the 12,000 mark for the first time since the collapse. That could have a two-fold affect. First, many buyers may see it as an endorsement of the recovery that has been so long in coming. However, to those bearish about the equities markets, it might also point to price to earnings ratios that can’t be justified by underlying fundamentals. Those bears might look to Manhattan real estate as a pretty good place to park seven figures of hard earned capital.
Other indicators also point to a healthier market. The buy-sell gap, the difference between asking price and buyers’ offers, is closing. According to Olshan’s report, last week’s thirty-one luxury properties went into contract at an average of just 4% below asking price. Additionally, half of them were on the market for less than ninety days. Though, the relatively low days-on-market average may be explained by nothing more than the seasonal removal of listings from the market as the winter approached at the end of 2010.
So what say you readers? Is this going to be the year of Manhattan luxury property after we saw momentum amongst first-time home buyers and listings below $1mil last year?