February 2016 Manhattan and Brooklyn Sales Market Snapshot

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Manhattan Trends:

• In February 2016, contract activity was down year-over-year in both the condominium and co-op markets.
• However, condominiums and co-ops alike saw year-over-year gains in average price and average price per square foot.
• The length of time from listing to sale increased moderately in both the condominium and co-op markets compared to last February.
• Listed condominium inventory increased 15% over last year.
• With this increase in options, condominium buyers were more successful at negotiating the purchase price downwards compared to last year.
• In contrast, negotiability remained nearly non-existent in the increasingly constricted co-op market.

 

Brooklyn Trends:

• In February 2016, the average price, median price, and average price per square foot were all lower versus last February.
• The year-over-year comparison was skewed by a downward shift in the market share of sales over $2M.
• Last year, sales over $2M accounted for 13% of sales, while this year just 4% were above this threshold.
• Contract activity dipped 18% versus last February; this double-digit decline has not been seen in nearly two years.
• Inventory was up 8% from last year but even with more choices for buyers, negotiability remained very tight.

 

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Weekly Interest Rate Overview

The Markets. Rates on home loans inched higher again in the past week. Freddie Mac announced that, for the week ending March 10, 30-year fixed rates rose slightly to 3.68% from 3.64% the week before. The average for 15-year loans was also slightly higher at 2.96%. The average for five-year adjustables increased to 2.92%. A year ago, 30-year fixed rates were at 3.86%, above today’s levels. Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield ended the survey week exactly where it started, however the solid February employment report boosted the yield noticeably on Friday and Monday. Our mortgage rate survey captured the impact of this temporary increase in yield, and the 30-year fixed rate rose 4 basis points to 3.68 percent. This marks the second increase this year. Nonetheless, the 30-year fixed rate remains 33 basis points lower than its end-of-2015 level.”  Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Current Indices For Adjustable Rate Mortgages
Updated March 11, 2016

	Daily Value	Monthly Value
	March 10	February
6-month Treasury Security	0.50%	0.45%
1-year Treasury Security	0.69%	0.53%
3-year Treasury Security	1.11%	0.90
5-year Treasury Security	1.45%	1.22%
10-year Treasury Security	1.93%	1.78%
12-month LIBOR		1.179% (Feb)
12-month MTA		0.377% (Feb)
11th District Cost of Funds		0.664% (Jan)
Prime Rate		3.50% (Dec)

February 2016 Manhattan Rental Market Report

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• The report found that rents remained largely stable, while the borough’s vacancy rate fell to a level not seen since September of last year, due in large part to another big jump in landlords’ use of concessions
• In February 2016, the average monthly rental price for a Manhattan studio was $2,191. For one-bedroom homes, the average was $3,026.  For two-bedrooms, the average rent was $4,004.  Finally, the average three-bedroom apartment rented for $5,236.   
• When compared to January, average rents rose 1% for studio apartments, while they fell 1% for two-bedroom units.  Meanwhile, average pricing for one- and three-bedroom homes only shifted by marginal amounts.
• In February, the borough-wide vacancy rate fell to 1.74% from January’s rate of 1.90%.  February marks the lowest Manhattan vacancy rate seen since September – when the rate was 1.62%.
• When examining concessions, a substantial 25% of rental transactions brokered by Citi Habitats offered a free month’s rent and/or payment of the broker fee to entice new tenants in February, up from 17% in January.  February 2016’s concession percentage is the highest we have seen since July 2010, when the percentage also reached 25%.

“Many landlords have relied upon incentives to keep their face rents high,” noted Gary Malin, President of Citi Habitats. “These concessions have, in large part, stabilized the recent rent declines and climbing vacancy rates.  However, their prevalence is indicative of a Manhattan rental market that is still out of touch – and beyond the reach of many tenants. ”

 

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