Gregory J. Heym
Executive Vice President, Chief Economist
By Michael Clancy
Sales prices of Manhattan co-op and condominium sales rose modestly in the closing months of 2006, a sign that the city's real estate market is experiencing a soft landing after years of frenzy, according to several real estate reports released Wednesday.
The average apartment sale price in Manhattan rose 5% in 2006 to $1.14 million while the median sales price -- the point at which half of sales are higher and half lower -- rose 9% to $760,000, according to Halstead Property's comparison of the last three months of 2006 to the same 2005 period.
Prudential Douglas Elliman also reported that sale prices jumped as much as 5% in year-to-year comparison, though they dipped slightly from the third to fourth quarters.
"When you rise as fast as we have for the last couple years, people assume there are two ways you can go," said Gregory Heym, chief economist for Halstead Property and Brown Harris Stevens. "You can crash as fast as you rose or you can find a soft landing where find a balance between supply and demand and you have a sustainable rate of growth."
Inventory of apartments on the market fell sharply while the number of sales increased as sellers became more realistic in their asking price, said Jonathan Miller, of Miller Samuel Inc., the firm which prepared Prudential Douglas Elliman's report.
Sales jumped 15% from the third to fourth quarters, with 2,441 units being sold in the last three months of 2006. By contrast, in 2005, buyers scared by talk of housing bubble only bought 1,574 units during that same time period.
The report said 5,934 units were in the market in the fourth quarter of 2006 -- a decrease of 22% from the prior quarter.
In years past, many sellers, buoyed by the rising market, just put a property up for sale, hoping to get their inflated price.
"The friction between buyers and sellers is being reduced because sellers are coming more in-sync with the market and buyers are more affluent," Miller said.
For example, Miller said, in the third quarter of '06, the average seller priced their apartment for 9.3% above the final selling price. In this last quarter, apartments sold for just 5.4% less than the initial asking price, he said.
The expectation of big Wall Street bonuses fueled sales in the end of 2006, boosting sales by 15.5% in the fourth quarter, Miller said.
Copyright 2007 Newsday Inc.
Wednesday, January 03, 2007