While our market is primarily focused in downtown Chicago, we find the New York Manhattan market offers an interesting parallel...

Like Manhattan, if we focus on our specific Gold coast market of luxury buildings, the data is surprisingly similar. Furthermore, we predict that the pullout or slow down of some expected luxury product will positively affect the demand for luxury condos near Michigan Avenue. Second City? Maybe not. Maybe twin city.

The 4th Quarter 2008 Manhattan Market Overview was just released. Below you will find some highlights of this well-respected report:

Overview: At the close of the third quarter, there was significant turmoil in the financial markets and unprecedented intervention by federal government agencies. The bailout of Fannie Mae, Freddie Mac and insurance giant AIG, as well as the investor run on the money market Reserve Primary Fund and the bankruptcy of Lehman Brothers, marked a significant change in the Manhattan and US housing market. The contraction of credit continues to play a primary role in the current residental market.



There was a decline in price levels and the number of sales of re-sale apartments. Due to a surge in new development closing activity in the current quarter and a lull in activity in the prior year quarter, the number of new development closings and price levels rose over the period however these sales reflect the market 12-18 months ago. In contrast to the more modest trends of closed sales, contract activity in the current quarter was marked by a sharp decline in sales activity and price levels. A periodic sampling of sales contracts showed a decline of 35% to 75% compared to the same period last year. Current contract price levels show an average decline of 20% from August 2008.



Manhattan Market Highlights:

· Median sales price increased 5.9% to $900,000 over the prior year quarter result of $850,000.

· Re-sale median sales price fell 3.6% to $732,500 from $760,000 in the prior year quarter.

· New development median sales price increased 5% to $1,260,000 from $1,200,000 in the prior year quarter skewed by high-end closings.

· Number of sales fell 9.4% to 2,282 units, from 2,518 units in the prior year quarter.

· Number of re-sales fell 24.8% to 1,408 units, from 1,873 units in the prior year quarter.

· Number of new development sales increased 35.5% to 874 units, from 645 units in the prior year quarter caused by the combination of a lull in closing last year and a surge in closings this quarter.

Additional Manhattan statistics:

· Listing inventory increased 39.3% to 9,081 units from the prior year quarter total of 6,518 units.

· Days on market was 159 days this quarter, four weeks longer than the 131 days on market average in the same period last year.

· Listing discount was 7.3%, up from 2.7% in the same period last year.

Co-op Market:

· Median sales price of a co-op this quarter was $675,000, unchanged from last year at this time.

· Number of sales fell 23.4% to 985 units, from 1,286 units in the same period last year.

· Listing inventory levels for co-ops increased 52.2% to 3,808 units from the prior year quarter.

· Co-ops accounted for 43.2% of all sales and 41.9% of all listings this quarter.

Condo Market:

· Median sales price of a condo this quarter was $1,120,075, up 1.8% from the prior year quarter result of $1,100,000. Again, mostly due to new construction units that went to contract 12-18 months ago and just closed this past quarter.

· Number of sales increased 5.3% to 1,297 units, from 1,232 units in the same period last year.

· Listing inventory levels for condos increased 31.3% to 5,273 units from the prior year quarter.

· Condos accounted for 56.8% of all sales and 58.9% of all listings this quarter.

Luxury Market (upper 10% of all co-op and condo sales):

· Median sales price of a luxury apartment this quarter was $4,132,516, down 3.9% from the prior year quarter result of $4,300,000.

· Listing inventory increased 25.5% to 1,730 units from the same period last year and more than doubled from the second quarter. This is primarily due to layoffs in the financial sector.

· Days on market was 169 days, 52 days longer than the same period last year and marks the end of a two year period where luxury properties generally sold faster than the overall market.

Loft Market (co-op and condo sales):

· Average price per square foot declined 1.7% to $1,268 from the same period last year.

· The average size of a typical loft sale jumped 17% to 1,865 square feet compared to the prior year quarter, skewing the results for median and average sales price. The jump was caused by the surge in larger new development unit closings during the period.

So, what does all of this mean and how does it affect your re-sale?

· Most increases in sales prices are artificially skewed by recent closings of new, high-end sponsor condominiums (that went to contract a year or more ago when the market was stronger).

· Re-sale inventory is up dramatically. A lot of this is due to the fact that sponsors of new condominiums are paying higher commissions and giving unheard of incentives to induce agents to show their units before showing re-sale apartments.

· Inventory has increased dramatically. It is taking a lot more time, effort and marketing by agents to secure a sale.

How does this affect your rental?

· With more new condo inventory hitting the market, competitive pricing is very important. Tenants prefer new buildings with great amenities and are negotiating great deals.

· Condominium management companies are charging higher application fees.

· With all of the new competition, any incentives you can offer will help to ensure a quicker rental. Most landlords are now paying a portion of the brokerage fee, condominium application fees, offering free months rent or a combination of all of these.

What if you want to buy?

· Increased inventory, price reductions and other incentives present an unprecedented opportunity to get a great deal…if you have good credit, sufficient down-payment funds, and can qualify with today’s stricter lender guidelines.

In today’s challenging market, hiring an experienced team to help you secure a faster rental or sale is more important than ever. The Minnick Group can help you make important decisions:

• We have over 15 years of experience in every type of Manhattan market.
• We are in the top 1% of all agents Nationwide. We had a great year during 2008!
• We have abundant advertising and marketing funds at our disposal.
• We represent over $ 800 Million in U.S. and International properties.
• We advertise extensively internationally and have overseas broker-partners who refer many clients to us every month.
• If you are buying or renting, we can help you choose the right property and present the proper offer that reflects today’s marketplace.