The Real.Est List
NYC property values stabilize at 25% down; tax man still in denial
Yesterday's fourth-quarter market reports brought some encouraging news to NYC homeowners: The decline in resale values seems to be leveling off, at least for now.
Average prices were only down 2.1% from the previous quarter, compared to 13% a year ago and 25% at their mid-2008 peak.
Links to the details and analysis follow, but what we want to know is whether assessed property values--due out in ten days--will finally reflect our scaled-back reality?
Probably not if you live in Manhattan.
“It’s a convoluted process that does not have a simple answer,” says Stan Russo of Sonnenschein Sherman & Deutsch, a real estate law firm that fights for property tax reductions on behalf of its co-op and condo clients.
He says that last year, assessed values for Sonnenschein's 500 co-op and condo clients rose around 7-8% in Manhattan on average, while those in Brooklyn rang in a 1-2% decrease.
This year, he says, Brooklyn will probably go down some more.
As for Manhattan? “We’re hoping for flat,” says Russo.
One reason, he says, is that the city relies in large part on comparisons to similar rent-stabilized units in similar buildings, and those rents are still climbing at about 5 percent a year, while properties in Brooklyn are renting slower.
“We’re hoping for a flat assessment pattern, but we still feel that a co-op or condo that gets a 5% increase is doing okay,” says Russo.
His opinon is probably not shared by co-op and condo owners whose homes are worth 25 percent less than they were two years ago.
Indeed, those conversant with the city's murky tax policy note that artificially high assessed values not only line the city's coffers but serve a valuable public relations purpose: To get out of its fiscal crisis by attracting investors, stores, and corporations, the city needs to appear valuable even in a recession.
Links to 4th quarter market coverage & reports:
Sales spur optimism in Manhattan real estate (NY Times)
The Manhattan bleeding slows (Curbed)
Manhattan residential market ends year on up note (Crain’s NY)
Manhattan co-op, condo sales climb at the end of the year (NY Daily News)
Will bonuses save the day for Manhattan Real Estate? (CNN Money.com)
Today’s market reports reflect activity six months ago (UrbanDigs)
StreetEasy Q4 2009 Manhattan Market Report
Prudential Douglas Elliman/Miller Samuel Market Reports
Brown Harris Stevens Market Reports
Halstead Property Reports