A Block-By-Block Breakdown of the Recovery
Going by the numbers, 2009 was a long time ago. Sales volume in Manhattan has rebounded by 36.8% since the crash stalled the real estate sales market across-the-board; condo and co-op sales fell 28% from 2008 to 2009. In 2009 there were 7,430 sales of Manhattan apartments, but in 2011 sales volume reached 10,161 units. That’s a great sign in a time of tight inventory and even tighter credit, which is why we at New Construction Manhattan have confidence that this trend will continue. But, as any apartment buyer in Manhattan knows, there is no one single Manhattan sales market; everything here depends upon location. Each neighborhood in Manhattan has recovered at a different rate, and the fastest recovering neighborhoods may surprise you, as may the slowest; there’s only one neighborhood in Manhattan where sales have declined continually since 2009, and it’s probably not the one you expect.
These statistics - all of which were compiled by the Real Deal - hinge primarily on three factors: how far the neighborhood sales market fell as a result of the crash; what types of housing stock are available in that neighborhood; and how much inventory is available. The crash may have stagnated sales and dropped prices in established neighborhoods like the Upper East Side and Upper West Side of Manhattan, but they experienced a much shallower decline (and hence rise) than neighborhoods with less inventory. While they’re on the bottom of the heap in terms of growth in sales volume from 2009 to 2011 (standing at 26.7% and 27.3%, respectively), no one is questioning the health of those markets. After all, those two neighborhoods combined for roughly 40% of co-op and condo sales in Manhattan in 2011.
The recent sales statistics are much more telling in less established neighborhoods with fewer apartments for sale. The two neighborhoods with the highest growth in sales volume were both hit hard by the crash and have very tight inventory, and both are rapidly gentrifying because of their desirability. Those two neighborhoods are the East Village and the Lower East Side, which combined for a 99.3% increase in sales of Manhattan apartments from 2009 to 2011. Between these two Manhattan neighborhoods, only 135 co-ops sold in 2009, while 269 sold in 2011 (condos are excluded from these statistics because there are so few that they weren’t deemed relevant). Two other neighborhoods that were hit hard but rebounded well were Harlem (96.6%) and Battery Park City (64.2%), albeit for slightly different reasons: in Harlem (which includes Morningside Heights, East Harlem, and Hamilton Heights) affordability drove the upturn, while in Battery Park City the uptown has been driven by the availability of studio and one-bedroom apartments.
There were some surprises too. Chelsea, despite it’s rapidly growing popularity, hasn’t had much room to grow; it was already well-established before the crash and sales of apartments in Chelsea fell less steeply than in most Manhattan neighborhoods; many pre-crash sales weren’t closed until 2009, inflating the numbers. It’s safe to say that it’s still a healthy market though, because average prices have risen 13.8% since 2009, the second highest rise in Manhattan. The real surprise is the Financial District, the only neighborhood in Manhattan where sales volume is still beneath 2009 levels (-15.4%). It’s still a success story when looking how far it has come over the past decade, but it’s hard to deny that the numbers are troubling. Identifying the exact reason for this trend is difficult, but the Occupy Wall Street movement definitely contributed. For a closer look at all Manhattan neighborhoods, take a look at the report, because buyers of Manhattan apartments may be surprised by the places with the most inventory, the most diverse inventory, and the best deals.