Address15 Broad Street

75 Wall Street

15 Broad Street$22,500,000

$7,500,000

Original Price

Most expensive units on the market

$10,995,000$22,500,000

$7,750,000

Current Price

$15,000,000N/A

PHD1

Unit

3620PH

Address59 John Street

55 Wall Street

30 West Street

$2,550,000

$1,375,000

Original Price

Units with biggest cuts

$2,195,000$1,600,000

$995,000

Current Price

$1,499,000-37.25%

-27.64%

% Change

-31.71%PH2

828

Unit

31B

Manhattan burningA neighborhood-by-neighborhood look at the borough’s new ‘fire sale’ pricing

www.TheRealDeal.com March 2009 57

N E I G H B O R H O O D S O N C L E A R A N C E

BY SARAH RYLEY

No one is actually announcing a borough-wide “fire sale.” But with hundreds of listings — for homes ranging from trophy apart-ments in glittering towers to shoebox-sized studios in prewar walk-ups — with price cuts exceeding 20 percent, one could be excused for thinking there was a giant clearance tag on the is-land of Manhattan.

Or that there could be one someday, as analysts are now beginning to agree such steep discounts will only become more prevalent as sellers reckon with the stunning recession that has already scorched big cities across the country. This month, The Real Deal drilled down to examine price cuts in Manhattan neigh-borhood by neighborhood. The island was divided into 12 districts (see map on the fol-lowing pages), customized data was gathered for each on past sales by PropertyShark and on current listings by StreetEasy, and industry players discussed how far listings would need to drop for property to move. The comparison found that in every neighborhood, current listing prices and recent actual sales differed widely, indicating a deep disconnect between sell-ers and buyers in the current downward market. Median listing prices would need to drop from 8 percent in Soho and Tribeca to a whopping 42 percent in the West Village and Greenwich Village just to equal the actual median sales price in those neighborhoods during the last quarter of 2008. “Listing prices, when they’re higher above market than they should be, you see a slower pace of sales. That’s measuring the buyer’s resistance to those prices,” said Jonathan Miller, president of real estate appraisal firm Miller Samuel. Industry executives also said, depending on the neighborhood, the divide could indi-

cate a high number of luxury or large-sized properties sitting on the market (reports have found studios and one-bedrooms have been selling better), and could also be affected by the large number of unsold apartments in newly constructed luxury high-rises. In comparing the median listing in each neighborhood to last quarter’s median sale prices, The Real Deal analysis is not predicting what actual sales prices will be in the coming quarters, but is only noting by how much listing prices are possibly inflated. Some analysts agree that listings must be cut back even further, to levels seen at the beginning of this decade, for today’s glut of housing to move, and finding that prices will see staggering declines. Goldman Sachs concluded in January that Manhattan condo property values would require a drop of 35 to 44 percent before the market is stabilized. (So far, Miller has noted signed contracts are averaging 20 percent lower than for similar units sold last year.) Some are welcoming price drops. “For the good of the city you need to get a bottom here, and the sooner that happens, the sooner the city will recover,” said Jon Gollinger, co-founder of Accelerated Marketing Partners, which auctions properties in distressed markets across the country. Gollinger basically agreed with Goldman Sachs’ assessment, foreseeing drops up to a devastating 55 percent in fringe neighborhoods, “assuming a tenable solution to the credit problem is forthcoming by year-end.” Accelerated has been discussing part-nerships with Prudential Douglas Elliman and Miller, who will help determine the starting bid of auction properties, as well as other firms (see related story on page 39). Andrew Gerringer, managing director of Prudential Douglas Elliman’s devel-opment marketing group, declined to reveal specific developers considering auc-tions, but said the Financial District is one of the prime areas. “There’s a lot of people listening to us with open ears right now,” he said.

Lower Manhattan

I n Lower Manhattan, the epicenter of the financial crash, there seems to be a particularly high proportion of

troubled buildings. Embarrassing head-lines have been written about 20 Pine Street — at least two buyers are suing to back out of contracts, and blog rumors are spreading that 80 unsold units are be-ing marketed at half off — and 25 Broad Street, which shuttered its sales office in the Financial District, as well as Rector Square in Battery Park City, where con-do owners allege units are being used for dorms and hotel stays. Though median prices staggered upward over the past two years, with the fourth quar-

ter of last year its best showing, the median listing price in Lower Manhattan must fall 29 percent to match that quarter, which pre-dates the vilification of Wall Street bonuses. Miller said the area’s large, unsold tow-ers and a transient atmosphere may mean larger price cuts are in order. Experts said the market also depends on a resurgence of Wall Street and interest from foreign investors. At the opulent Cipriani Club Residences, named after restaurateur and co-creator Gi-useppe Cipriani, four apartments are listed below their previous purchase price. “If they want to sell and they don’t get offers, they have to do something about it,” said Ellen Kour-tides, a Corcoran vice president who is mar-keting one apartment that had a price chop

of nearly 28 percent. The biggest fire-sale award in Lower Manhattan goes to Five Nine John Lofts, where the sponsor is pushing the last un-sold apartment, an Andres Escobar-de-

signed penthouse, for $1.6 million, 37 per-cent less than the original asking price over three years ago. At that discount, Beverly Sonnenborn, a vice president of Sotheby’s International Realty, said it’s a “good buy.”

15 Broad Street 12 Beekman Place

Palazzo Chupi

241 West 36th Street 147 East Houston Street

Yves Chelsea at

166 West 18th

Street

40 Bond Street

151 West

19th Street