Posted Jul 29, 2009 08:30am EDT by Aaron Task in Investing, Housing
Following the boom and bust cycle on Wall Street, both markets have swooned in recent years after soaring in the mid-2000s.
Average sales prices in Manhattan were a mere $1.3 million, down 28% in the second quarter vs. a year-ago, according to Prudential Douglas Elliman Real Estate.
In the Hamptons, which is to New York what Nantucket is to Massachusetts, things are so bad “even the brokers have stopped trying to deny it,” according to Vanity Fair.
But don’t feel bad for the sellers – not that you were.
“A lot of sellers…the market went up so much they’re still not really hurting unless they bought last year or the year before,” says Dorothy Herman, Prudential Douglas Elliman’s president and CEO, who estimates Manhattan and Hamptons real estate rose 250% from 2002-2007. “Most of these properties really appreciated so much — even dropping 30% to 35% [sellers are] still making money. I don’t have a violin out.”
And with the stock market having rallied so dramatically and Wall Street getting its “swagger” back (not to mention big bonuses), Herman says buyers and sellers are now “playing cat and mouse games.”
There’s plenty of buyers “with a lot of money on sidelines” interested in “trophy properties,” says Herman, who has offices in both NYC and the Hamptons. “They believe in real estate, [and] they still want to purchase it,” she says. “But there so many uncertainties — consumer confidence isn’t there yet.”
In this regard, at least, even the ultra-rich are just like the rest of us.