(Above) 535 West End Avenue

Looking Up

Low interest rates and high demand breathe life into the New York housing market

By Lauren Price

February-March 2010

The housing market is showing signs of life again - and optimism is running high. Just ask Dottie Herman, president and CEO of the New Yorkú based brokerú age firm Prudential Douglas Elliman. She says those pesky predictions of New York area housing prices not yet bottoming out are yesterday's news. "Buyers are beginning to believe that this is the best time to buy," says Herman. "And unlike the rest of the country where housing markets died a slow death, ours was more of  'one-two-three' punch. We were bruised," she adds wryly, "but not broken."

"We've seen considerably more sales activity in this winter season than we did last year," notes Jacqueline Urgo, president of The Marketing Directors, Inc., a Manhattan-based marketing and sales/leasing company. "We made nearly 50 sales at new buildings in the area just in the month of January, which is about three times as many sales as we achieved in January 2009."

Low interest rates, an improving economy and realistic pricing all played a part in what is looking like a real estate resurgence in the Tri-State area, says Urgo. Another important factor is the vicinity's supply and demand: in other words, the need and desire to live here remains high.

"New York did not get hit like Florida or Los Angeles, where the housing market is still oversupplied. It will probably take them anú other decade to absorb surplus inventory," says Herman. "Conversely, New York's listing inventory actually declined by 25 percent versus last year at this time."

Contributing to these favorable conditions in the post-bust buyer market: predictions that this year's bonus season will rival those of boom years past.

"It will have an impact on residential sales, though we don't know how much yet," says Urgo. "That infusion of money will help push even more buyers off the sidelines who, depending on the size of their bonuses, will now have the necessary funds at hand for down payments, and in some cases, all-cash purchases. "

A Perfect Storm

In many respects, current market conditions represent a perfect storm. "Buyers and sellers are seeing eye-to-eye on pricing, interest rates are still at historic lows, and supply is decreasing significantly," says Kelly Kennedy Mack, president of the brokerage firm Corcoran Sunshine Marketing Group in New York City. She reports that Manhattan's new development inventory fell by 19 percent in the last quarter of 2009 versus the previous quarter.

"Within our own portfolio, we're doing 100 percent more deals than we were a year ago," says Mack.

Those deals are not just with buyers from the region. According to the Chicago-based Luxury Portfolio Fine Property Collection, a global network of high-end, locally branded brokerages showcasing some 14,000 properties worldwide, interú national buyers are keen to exploit an advantageous market.

"Our website, LuxuryPortfolio.com, attracts over 1.2 million high-net-worth visitors annually and traffic from over 200 countries and territories every month" says Stephanie Pfeffer, Luxury Portfolio Fine Property Collection's vice president, marketing. "And the increase in website traffic since late 2008 is significant." When the site compared traffic from December 2008 to December 2009 in the New York Tri-State area, "we saw a 66 percent increase. Additionally, 21 percent of the traffic to the Tri-State area originates from overseas," says Pfeffer.

Jonathan J. Miller, co-founder of residential real estate appraisal firm Miller Samuel, has also observed an influx of international buyers "mostly from Europe, South Korea and South America, particularly from Argentina and Brazil," he says. "These buyers are typically interested in new developments and are usually paying all cash, often negotiating discounts in return."