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.

When Your House Gets Too Big

As the Baby Boomers of the 1950s send their children off to college, they join the part of the market called "empty nesters". At this point they no longer need six bedrooms and three baths, a family room and a gigantic yard. Many "empty nesters" are trading in the family home for something that is smaller, easier to maintain and has the amenities that are important to their more carefree lifestyle. If you are considering such a move, start out by consulting a good Realtor whom you like and trust. The good news is--- when you sell your primary residence, you are not taxed on your profit if (1) you have lived in the home for two out of the last five years and (2) your gain does not exceed $250,000 as a single taxpayer or $500,000 as a married couple filing jointly. These capital gain exclusions apply whether you "buy up" to a more expensive home or "buy down" to a less expensive one. If you are moving downtown from the suburbs in order to be close to cultural centers, theaters and restaurants, there may be "quality of life" issues, such as noise or parking. Your Realtor can help you find a home that has all the conveniences and amenities you desire.

Our new mantra is - buy now with the best interest rates in 25 years, the best prices in two years, and fine inventory to choose from – so..you may sell a little lower, but you will buy much lower still!!

Sell low, buy lower…live where you want to live!!!

AND HAPPY NEW YEAR from The Tricia Fox Group

In New York, Fashion's Vacca Cuts Price to $8.9 Million

By CHRISTINA S.N. LEWIS
Fashion designer Domenico Vacca, who bought and renovated a New York City condominium earlier this year, and then relisted it, has now reduced the price to $8.9 million -- still 45% more than he paid.
In February, Mr. Vacca and his wife, Julie, paid $6.15 million for the unit, in the Museum Tower, and first listed the apartment for $9.5 million this summer. (In the 1980s, architect Cesar Pelli designed the Museum Tower, on top of the Museum of Modern Art's existing galleries, as part of an expansion plan.) With park and city views, the 3,250-square-foot unit has three bedrooms, three travertine-marble bathrooms and a large dressing room, according to the listing. The apartment can also be rented for $35,000 a month with a one-year minimum lease.
A. Gordon
Italian-born Mr. Vacca is known for his ties, bags and custom suits. At the 2007 Oscars, he dressed Best Actor-winner Forest Whitaker. Mr. Vacca has opened a handful of stores.
Carrie Chiang, of Corcoran Group, has the listing.
Qatar Sheikh Offers Big Apple Apartment
Elsewhere in Manhattan, Sheikh Abdul Aziz al-Thani, of Qatar, has listed his three-bedroom apartment at Trump Park Avenue for $14 million. Mr. Al-Thani paid $6.1 million for the 3,300-square-foot condo in 2005, according to property records.
On the fourth floor with east and southern exposures and full city views, the apartment has marble bathrooms, herringbone wood floors, walk-in closets and 11-foot ceilings.
The apartment is rented through June for $30,000 a month, and the building (pictured left) has maid service, valet service, a health club and closed-circuit security monitors, according to the listing. Carrie Chiang and Alexa Tirado, of Corcoran Group, have the sheikh's listing.
Meanwhile, Yankee Alex Rodriguez is asking $10 million for his renovated 4,600-square-foot unit in the same building. The All-Star third baseman originally asked $14 million for the home. Adam Modlin, of Modlin Group, has that listing.
The Federal Reserve Board's Dec. 3 "beige book," citing "a major residential appraisal firm," said that Manhattan apartment prices have fallen by 15% to 20% since midsummer, though thin volume muddied the picture.
Splash News
Trump Park Avenue
Hollywood Producer Furla Asks $3.5 Million in Chicago
Hollywood producer George Furla wants $3.5 million for his unfinished penthouse apartment in downtown Chicago. The listing calls him a "motivated seller."
Mr. Furla's long résumé includes this year's iteration of "Rambo" and "Righteous Kill," starring Al Pacino and Robert De Niro. Mr. Furla paid $3.15 million for the unit in 2005. The apartment is in the Fordham building on the Gold Coast, an area along Michigan Avenue that's home to a raft of new luxury condo developments. The producer's 6,200-square-foot, 50th-floor unit has a 1,500-square-foot terrace.
The listing says plans to finish the unit have been approved, but Mr. Furla never acted on them and is selling the space raw. The building has a bike room, doorman, a gym and other services. In 2005, actor John Cusack paid $2.9 million for a 45th-floor condo in the Fordham. Oprah Winfrey bought an apartment in a building nearby.
Tricia Fox, of KW Luxury Homes, has Mr. Furla's listing.

How does Chicago stack up?

How does Chicago stack up?

Video:
Olympics expert Ed Hula, founder of AroundTheRings.com, compares the four host city hopefuls for the 2016 Summer Games: Tokyo, Madrid, Chicago and Rio de Janeiro.
http://link.brightcove.com/services/link/bcpid1184417269/bclid3916906001/bctid1818365469

Paulson: Not contemplating 4.5% mortgage plan

WASHINGTON (MarketWatch) -- Treasury Secretary Henry Paulson said Tuesday that he isn't contemplating a plan to set a 4.5%-target mortgage rate for new home loans, though he acknowledged that the agency is working to lower mortgage rates.

"We didn't float any plan," Paulson told the CNBC cable channel. "I am always looking at new ideas and I have said from day one that the key thing to get us through this period is getting housing prices down."
Paulson responded to speculation that the Treasury would employ Fannie Mae (FNM, Trade ) and Freddie Mac (FRE, Trade ) to offer mortgages with rates as low as 4.5%. Instead of any 4.5% mortgage rate, Paulson expressed his support for the Federal Reserve's statement Tuesday that it would buy mortgage backed securities from Fannie Mae and Freddie Mac as a means of driving down mortgage rates.
"The Fannie Mae and Freddie Mac action is so critical," Paulson said.

Paulson defended the Treasury's controversial use of a $700 billion bank bailout fund authorized by Congress. Lawmakers were told the fund was needed for purchasing large quantities of mortgage backed securities, but instead he has allocated a significant amount of it to buy large minority stakes in financial institutions.
"Seeing what is it we've done to date is stop a string or cycle of financial institutional failures which could have gone to a downward spiral," Paulson said. "I am expecting no other major financial institution to fail."
Nevertheless, Paulson acknowledged that banks have not yet responded to the injections in the way he hoped they would by lending to consumers. "Everyone understands that they are not lending enough," Paulson said.
He also reiterated a plan to support consumer finance. Treasury announced Nov. 25 that it would use $20 billion of a the bank bailout fund to buy asset backed securities for a consumer-lending facility known as Term Asset-Backed Securities Loan Facility, or TALF.

The program, which isn't expected to start until January, is expected to provide liquidity to consumer loans such as student loans, credit cards debt and auto loans. It will be operated by the Federal Reserve.
"We at Treasury are willing to support consumer finance," Paulson said. "A lot of financing takes place outside of the banking system."

Zell expects housing recovery by spring

Tricia Fox Returns to Keller Williams Gold Coast