Gregory J. Heym
Executive Vice President, Chief Economist
BY ELIOT BROWN - Special to the Sun
Manhattan apartment prices are once again reaching record levels, relegating the brief housing market slowdown of mid-2006 to a mere blip on the area's price ascent.
Fueled in part by record Wall Street bonuses, the first three months of 2007 saw a strong increase in the number of co-op and condo sales when compared with the same period in 2006, reports to be released today by three major brokerage firms indicate. The median sales price of a Manhattan apartment reportedly ranged between $770,000 and $840,000, with two of the firms noting a record high for the figure.
The results suggest that after a period of declining prices last year, which analysts attribute to buyer trepidation amid a softening of the national housing market, the Manhattan market is back on its upward track, defying the stagnation seen in the rest of the country.
"Activity is up, so that's obviously something that bucks the national trend," an economist at Halstead Property, Gregory Heym, said. "Our economy remains very strong, and we're seeing more stable conditions in our market than we have in the past couple years."
The stability comes as prices have been increasing at slower rates than a few years ago, when the average sales price often shot up by double-digit numbers between quarters.
Now that buyers and sellers appear to have adjusted to a seemingly more constant market, prices have risen again.
"I think people are more comfortable in this type of market because it's not growing in leaps and bounds," Mr. Heym said. "They have more options and they can take a little bit longer to make decisions."
Further contributing to higher sales levels and prices is a general optimism about the city 's economy, according to an analyst who compiled the quarterly report for brokerage giant Prudential Douglas Elliman, Jonathan Miller.
"A year or two out the economy out is looking pretty good, and buyers are more confident and sellers have learned over the past year and a half how to price properly," Mr. Miller said.
A few years ago, some people would put their apartments up for sale at exorbitant prices in the off chance that they could find buyers, he said. "Now we're looking at a stable to very modest appreciation — there's much more precision required with pricing," Mr. Miller added.
The average sales prices in the reports, between $1.2 million and $1.3 million, were up when compared with the period of June through December, though two of the reports noted slight declines over the first quarter of 2006.
The reports all indicated a significant increase in the number of sales compared with the same period a year earlier.
The spring season for real estate tends to result in high sales and high prices, and real estate companies said they are optimistic current trends will hold.
"We're going to take this first quarter, and the last quarter of last year, as a trend that we're going to continue on," the director of sales at the residential brokerage firm Corcoran, Tresa Hall, said.
Providing a point of some caution to those in the industry is the constant inflow of new-construction apartments in Manhattan.
"So far it's being accepted — it's being absorbed," Mr. Miller said. The market must continue to grow and accept the new units, he added, or the stock of apartments being sold could rise to unstable levels.
Tuesday, April 03, 2007