At the beginning of 2002, the outlook for the city's real estate market seemed healthy, if a little uncertain. September 11th was still fresh on everyone's minds, and the aftereffects on the co-op and condo market carried over from 2001. According to Joanna Simon, a broker with the Fox Residential Group in Manhattan, "Everyone was in state of shock [after September 11th]. Some people panicked and wanted to get out of city, so they put their properties up for sale." But with a lack of buyers immediately following the attacks, most properties just sat on the market. Simon also found that some prospective buyers who were already in negotiations pre-September 11th didn't want to continue and close the deal.
Starting in January and February of 2002 however, people began to rebound a little. "They started to proceed with their lives - and people who had listed their apartments [after September 11] took them off market and stayed," says Simon. At the same time, there was renewed interested in buying in New York City, and Simon says she "saw a lot of people negotiating, buying, and selling."
Broker, author, and education chairman for the Real Estate Board of New York (REBNY) Sam Irlander of Parker Madison Partners Inc. a Manhattan-based management company, attributes what he calls the "spurt in activity" early last year to "an offshoot of some who where displaced after 9/11." He thinks other buyers saw the availability of properties as an opportunity, and decided to purchase. This continued into the spring, which Simon calls "a very busy time. There was a rallying force among people and businesses."
But the drop in the stock market last summer resulted in another lull in the market. "That had an enormous influence on the real estate market," says Simon. "Fewer people were in positions to buy."
Smaller bonuses, layoffs, downsizing and a weakened economy all contributed to potential buyers stepping back and staying put. Steven James, senior executive director responsible for East Side sales for Insignia Douglas Elliman, says, "It slowed down in summer and was much quieter than years past." He adds that the market has been active year-round for the last 10 years, but last summer reminded brokers of the "old days," when summers were slow.