A new housing report for real estate firm Massey Knakal shows the dramatic drop in the number of sales of apartment buildings across the City, especially in the Bronx. In an article in Crain's New York Business, the Chairman of Massey Knakal blames the drop on the reduction in supply, as "discretionary sellers are not putting their property on the market," but he warns that in the coming years prices will drop as distressed sellers will have no other option but to sell for less.
Meanwhile, the reports authors acknowledge the Bronx market is riskier than the other boroughs:
Brooklyn and Queens held up better than the Bronx in part because during uncertain economic times, there is a “flight to quality,” said John Cicero, managing principal at Miller Cicero. “Investors want to go to secure, more established neighborhoods.” Institutional investors didn’t start buying multi-family buildings in the Bronx until about six years ago, noted Mr. Knakal.
University Neighborhood Housing Program also tracks sales of residential apartment buildings in the Bronx, and we had similar findings. Prices haven't dropped, but the number of sales has gone from a peak of 260 in the first half of 2007, to 138 in the second half of 2007, to 132 in the first of 2008 and 64 in the second half of 2008. A drop in prices can be expected for the exact reason Mr. Knakal mentioned, as is the case with Botanical Square and a few other properties bought at the peak of the market by private equity investor Hudson Realty Capital.
For a great long term perspective on real estate booms and bust in New York City neighborhoods, don't miss the Furman Center's latest State of New York City’s Housing and Neighborhoods, which was released by the NYU research center just this month. Among the many tidbits you'll discover is that certain Bronx neighborhoods fared well during the last bust in the early 1990s, perhaps because they were still making up for the devastation of earlier decades (page 14). There is a related fascinating case study of the Morrisania/Crotona area (Bronx Community District 3) on page 20 showing price appreciations through every boom and bust period since 1974 (though they were pretty much starting from ground zero).
There is also a section on sustainability showing how the Bronx produces a lot of waste per capita and recycles very little.
At the end there is the heavy demographic and housing data, mostly based on 2005-2007 American Community Survey from the U.S. Census. Many of the findings are the same old story: Bronx neighborhoods have the highest rates of poverty, lowest educational attainment, lowest homeownership rates, the youngest population, etc.
But there was at least one surprise: none of the neighborhoods with the highest incidence of elevated blood levels in children are in the Bronx. Instead, neighborhoods with converted manufacturing loft space (SoHo and Williamsburg) rank tops in the City.
One other interesting stat: the three most densely populated community districts outside of Manhattan are in the West Bronx. Here are the top 10 in the City with the number of persons per square mile:
1. Upper East Side (MN) - 105,900
2. Lower East Side/Chinatown (MN) - 99,100
3. Morningside Heights/Hamilton Heights (MN) - 98,800
4. Stuyvesant Town/Turtle Bay (MN) - 88,100
5. Central Harlem (MN) - 86,100
6. Kingsbridge Heights/Bedford (BX 7) - 77,000
7. Highbridge/Concourse (BX 4) - 75,800
8. Washington Heights/Inwood (MN) - 73,700
9. Fordham/University Heights (BX 5) - 73,000
10. Upper West Side (MN) - 66,000