Manhattan Realestate Prices

[vanhattan]

Just thought I would post a story about Manhattan realestate prices. Manhattan and Vancouver seem to share three common threads, namely a healty economy, low interest rates, and solid job growth.

For everyone hoping for the big RE crash, until these three fundementals to housing prices crash, don't expect the price per square foot to crash.

Average price of Manhattan apartment up
By ADAM GOLDMAN, Associated Press Writer
Wed Jan 3, 12:23 AM ET


NEW YORK - The average price of a Manhattan apartment rose to more than $1.14 million in the fourth quarter of 2006, up 5 percent compared with the same period a year earlier, according to two new real estate reports.

The median price for the apartments was $760,000, a new record, beating the figure from 2005 by 9 percent, according to the reports released Wednesday.

The median value is the price at which half the sales are higher and half are lower. It is an important indicator of a market's stability, said Greg Heym, who authored the reports for two Manhattan real estate firms, Brown Harris Stevens and Halstead Property. Heym is the chief economist for Terra Holdings, which owns both firms.

Heym, who also serves on the city's Economic Advisory Panel, said Manhattan is experiencing a more balanced market, meaning that price increases have become more sustainable — unlike in 2004, when double-digit gains were common.

The reports also reflect the New York market's resilience in the face of a nationwide housing slump.

One of the biggest price surges in Manhattan took place on the Upper West Side, where four-bedroom and larger apartments cost an average of $5.7 million, or a 48 percent increase over the fourth quarter of 2005.

The average price of an apartment with three or more bedrooms on the Upper East Side was about $3.8 million, up 22 percent.

The average price per square foot in Manhattan rose to a new high of $1,050 in the fourth quarter, up 7 percent from $979 a year earlier.

"The market for luxury apartments in Manhattan remains very strong, and we're continuing to see steady growth in this sector," said Hall F. Willkie, president of Brown Harris Stevens.

The average sale price of new condominiums remained relatively flat at $1.3 million, about $13,000 less than in the fourth quarter of 2005. Cooperative apartments in Manhattan saw their average sale price rise 3 percent to reach $953,120.

The Halstead report showed apartments sold during the fourth quarter of 2006 spent an average of 97 days on the market, 15 percent longer than during the same period a year earlier. Sellers received 97.9 percent of their asking price, down from 99.1 percent.

Heym said he doesn't see prices softening going into 2007 thanks to solid job growth in the city, a healthy economy and low interest rates.

"It looks like demand will remain pretty strong," he said.

Heym added that record Wall Street bonuses, expected to top nearly $24 billion, also should buoy the housing market across the board.

Both reports were based on 2,364 reported sales.


Comments Vancouver Readers?
Best wishes to all for a happy and healty 2007,

Vanhattan

[gse36]

Also helps that the avg salary for many of those Manhattan types is $200-300k per person! If you have a professional couple, that is $400-600k easily. (These are the Wall Street finance types).

[milhouse]

The economic conditions in Vancouver are very good but how can you compare us to Manhattan. How many of these investment banker type jobs are in Vancouver. I had to shake my head in disbelief when watching a CNN segment that described the bonuses these guys were making.

http://www.cnn.com/2006/US/12/19/wallst ... index.html

There's a small bit in the article that discusses the impact it's having on real estate in the NY region.

[vanhattan]

You are correct that Manhattan is one of the wealthiest counties in the US, however, you are far off the mark by thinking that all Manhattanites make hundereds of thousands of dollars per year. Please see the following post on Yahoo (not the best source, but the best I can find at the moment:

Manhattan is one of the highest-income places in the United States with a population greater than 1 million. The Manhattan zip code 10021, on the Upper East Side, is home to more than 100,000 people and has a per capita income of over $90,000. It is one of the largest concentrations of extreme wealth in the United States. Most Manhattan neighborhoods are not as wealthy. The median income for a household in the county was $47,030, and the median income for a family was $50,229. Males had a median income of $51,856 versus $45,712 for females. The per capita income for the county was $42,922. About 17.6% of families and 20% of the population were below the poverty line, including 31.8% of those under age 18 and 18.9% of those age 65 or over.

The following is a breakdown of Vancouver incomes as per the 2003 census that can be found at http://www.ccsd.ca/pr/2003/censusincome.htm;

Vancouver
After Toronto, family incomes were most unequal in Vancouver, where the bottom 10% had an average income of $8,700 and the top 10% had $205,200 on average. The lowest 10% therefore had one dollar to every $23.50 the highest ten percent had.

The median income of families in Vancouver declined 3.9% between 1990 and 2000

The median income in Vancouver was $57,926 down from a medium of $60,254 a decade previous. This was higher than the provincial median of $54,840 and national median of $55,016

On average in Vancouver families received $3,300 in government transfer payments in 2000 representing 4.5% of all family income.

So, in reality, the median family income in Vancouver is really about the same as it is in Manhattan. Hard to believe I know, but the facts bear it out.

[b]Comments? [/b]

[gse36]

Manhattan is one of the highest-income places in the United States with a population greater than 1 million. The Manhattan zip code 10021, on the Upper East Side, is home to more than 100,000 people and has a per capita income of over $90,000. It is one of the largest concentrations of extreme wealth in the United States. Most Manhattan neighborhoods are not as wealthy. The median income for a household in the county was $47,030, and the median income for a family was $50,229. Males had a median income of $51,856 versus $45,712 for females. The per capita income for the county was $42,922. About 17.6% of families and 20% of the population were below the poverty line, including 31.8% of those under age 18 and 18.9% of those age 65 or over.


The median income in Vancouver was $57,926 down from a medium of $60,254 a decade previous. This was higher than the provincial median of $54,840 and national median of $55,016

So, in reality, the median family income in Vancouver is really about the same as it is in Manhattan. Hard to believe I know, but the facts bear it out.

[b]Comments? [/b]

I thought if the median in Vancouver is $57926, then that would make a household income of ~ $115k.

Manhattan has per capita of $90k. Makes household income ~$180k. Of course the people in the US can write off the mortgage interest, etc. But the Manhattan types still appear to make double the household income as in Canada.

I think what you must also appreciate is that in vancouver, the top 10% may make a household income of >$200k, but in Manhattan, basically the top 50% make that sorta income (median). That is 5x as many people who could potentially afford these $1M pads.

I would also hazard to guess that if you were to find households in Vancouver making >$300k, that would probably be very small (1-2%)? But in Manhattan, it is much more common.

http://nyjobsource.com/manhattansalaries.html

"The financial services sector paid the highest weekly wage according to the report with a whopping $5,680 salary per week. "

Such salaries are a rarity in Vancouver (due to all the small/mid cap/gov't jobs here).

Cheers

[milhouse]

But I think you're dismissing the volume of people making the high wages in New York.

I need some leeway here with the numbers as I'm working with averages versus medians and am not taking into account supply. But I think it's still a somewhat good illustration of the volume of people making the sizeable dollars.
From the CNN article, it indicates the average New Yorker earned $56,634 in 2005.

8 million New Yorkers x $56,634 = $453,072,000,000

The article also indicates that Wall Street accounts for less than 5 percent of the jobs in the city but more than 20% of the wages.

5% of 8 million New Yorkers = 400,000 working on wall street
20% of $453,072,000,000 = $90,614,400,000

$90,614,400,000 / 400,000 = $226,536 average wage for 400,000 Wall Street employees

So, you've got a 400,000 Wall Streeter individuals (a quarter of the population of the GVRD) making an average wage of $225k.

[vanhattan]

Thanks for the comments GSE.

I thought if the median in Vancouver is $57926, then that would make a household income of ~ $115k. Vanhattan: No this is not necessarily true. Household income is not calculated by multiplying two average earners x 2. These figures are most likely derived by tax returns, meaning the total number of households that filed taxes devided by their respective median incomes.

Manhattan has per capita of $90k. Makes household income ~$180k. Vanhattan: Two problems with this statement. The article states that the upper east side has a median income of 90K, this is comparable to saying that West Point Grey has a median income of 90K. The upper east side is the wealthy part of Manhattan. Secondly, you make the same assumption that the median household income of Manhattan is double that or 180K. Again, not true. Of course the people in the US can write off the mortgage interest, etc. But the Manhattan types still appear to make double the household income as in Canada. Vanhattan: this is not true.

I think what you must also appreciate is that in vancouver, the top 10% may make a household income of >$200k, but in Manhattan, basically the top 50% make that sorta income (median). That is 5x as many people who could potentially afford these $1M pads.

Vanhattan: In summary, lets try to compare apples to apples shall we?

The median income for a family in Manhattan was $ $50,229

The median income in Vancouver was $57,926 (for a family? not sure).

If you convert at todays rates you get $59,104.46 for Manhattan, versus 57,926 for Vancouver or only marginally higher than Vancouver. What I think most people fail to appreciate in many such comparisons is that in any community there are many people who live there who do not necessarily earn any income, but already have plenty of assets. It is much harder to calculate the net worth of citizens of a city if they are not required to report their net worth as most workers do with annual income tax filings.

The facts remain though, that the annual incomes (as reported by income tax filings) of Manhattan and Vancouver families are bizzarly similar.

[uncertain_buyer]

Vanhattan: In summary, lets try to compare apples to apples shall we?

Yes lets,

Vancouver and Manhatten are like apples to oranges. Have you ever been to Manhattan? There is a big difference.

Maybe if you were talking about Toronto, even then there is still a large difference.

Try using Seattle as a comparison to Vancouver.

Furthermore, these strong fundamentals are not just in Manhattan they are, or were, all over the US.

Even with these strong fundamentals there are areas in the US that are getting hit pretty hard on the RE front.

[gse36]

Actually I think last year I read somewhere that the highest median household income in Vancouver was in lions bay. $115k or thereabouts.

[CityPlace]

LOL why is this not in the off topic section?

hmmmm

[uncertain_buyer]

Manhattan real estate cools off

[Lost Soul]

I like the line about 29 billion in bonuses for workers in the financial sector. After income tax, that's about 20 thousand million dollar homes paid off in cash. Just what we should expect in Vancouver, right?

[freako]

1. That article conveniently spun yoy quarterlies. It conveniently did not mention that quarter over quarter was down. That means that Manhattan has had month over month declines for quite a while.

2. I don't have any specific facts to add on the incomes versus prices thing, but I do know that rent control really skews the price to income ratio. A good number of people live out their days in grandfathered controlled rent situations. Market rents would be much much higher. If you checked the income of owners in Manhattan, they would be much higher. I would guess that among owners, Manhattan is much more affordable than Van West.

3. I also think that the source of strong Manhattan economy is less diversified than Vancouver, but is more dependable when it comes to income growth. We have relied on ... construction for much of our income growth. Take construction and resource related job growth out of the question, and we will be in a shaky situation.

4. In Vancouver, I think the choice to in live downtown condos is much more discretionary. Howe Street types could live in Langley for all that matters. Not so on Wall Street. Hence, demand could cool for fickle psychological reasons without worsening economic fundamentals.