Manhattan Monthly Market Report - October 2011

| Record Low Interest Rates | Rental Vacancy Rates Below 1% | All -Time High Average Rents |

I like to provide a sense of the Manhattan market conditions each month in my Manhattan market reports and I find myself trying to constantly gain a market-wide perspective on demand, pricing and market psychology.

While the macro-level market analysis below is certainly helpful in placing real estate opportunities in context and weighing up relative negotiating strength, what matters most are the individual sale transactions. Each market segment and neighborhood has it's own nuances.

My current perspective is that the market has picked up a fair amount. I believe there are two factors. The first fact is record low interest rates. The same amount of monthly payment now buys almost TWICE the dollar amount of mortgage than it did just 5 years ago. (ie $1000 a month now gets you a loan of $220,000 where as in 2006 it would get you a loan of about $150,000).

The second fact is the sudden and steep rise in Manhattan apartment rents. Rental vacancy rates are now below 1% and the average rent in Manhattan just hit an all-time high of $3,316 up 13% from 2008. Its hard to find a rental apartment now and your monthly cost has risen significant. All this makes buying more appealing and we are seeing a big pick up in studios and 1 bedrooms where buyers were initially looking to rent but have figured out that buying is much less expensive.