Halstead Property

Diane M. Ramirez
President
dramirez@halstead.com
(212) 381-3203

Gregory J. Heym
Executive Vice President, Chief Economist
(212) 546-1069

Manhattan Apt Prices Sales Rise In 3Q

By Amanda Fung

The Manhattan residential real estate market continued to stabilize as sales levels returned to historical norms and the sale of more big apartments helped to boost average prices during the third quarter, according to several market reports released Friday morning.

All but one report showed sales activity in the third quarter running above year-earlier levels. The number of sales jumped 19.3% in the third quarter from the same period 2009, to 2,661, according to Prudential Douglas Elliman and appraisal firm Miller Samuel Inc. The one dissenting voice among the five reports was that of the Corcoran Group, which showed sales down 5% in the quarter, though it too reported an increase in prices in the quarter.

In another sign of a healthier market, two-bedroom sales represented 38% of the total during the quarter, just shy of historical averages, and up sharply from 30% last year.

Even the slight decline in sales activity from the second quarter to third demonstrate that the market is following normal seasonal patterns--something the market has not done in two years, said Jonathan Miller, chief executive of Miller Samuel. The number of sales slipped 3.4% from the previous quarter.

“Sales volume has returned. Even the high-end market is returning,” said Hall Wilkie, president of Brown Harris Stevens. “People are more confident.”

During the quarter even prices rose. The median level was up 7.5% in the quarter from year-earlier levels, to $914,000, according to the Prudential Douglas Elliman report. Meanwhile, the average sale price hit $1.4 million in the quarter, the highest since the first quarter of 2009, said Brown Harris Stevens and Halstead Property.

While all the reports indicated an increase in prices, experts warned that the improvement is exaggerated by a mix of sales that includes more large and expensive units.

“The prices show a more normal distribution of sales,” Mr. Miller said. “This quarter there was a shift in the mix of what sold.”

Life at the top of the market was sharply better. According to Brown Harris, co-ops priced at $7 million and up doubled from the same time a year ago, driving overall average prices up by 24%.

“We hit rock bottom a while ago, and now we are moving forward,” said Dottie Herman, chief executive of Prudential Douglas Elliman. “Now we need to get better financing.”

According to an internal Corcoran broker survey, 50% of the brokers said all-cash deals were more frequent in the third quarter due in part to the challenging financing market.

Friday, October 01, 2010