Gregory J. Heym
Executive Vice President, Chief Economist
By JOSH BARBANEL
Shaking off months of fretting over rising interest rates and bursting real estate bubbles, affluent buyers stepped up their purchases of large Manhattan apartments in the first three months of the year, pushing average sale prices above those of a year ago, according to several market reports released yesterday.
After several quarters of declining average prices and withering sales, the average sale price was reported to be $1.3 million, a 7 percent increase from the same quarter in 2005, according to one report, by the brokerage firm Prudential Douglas Elliman.
Although the increases were far below the 25 percent to 30 percent annual increase reported the year before, brokers celebrated the new numbers as an indication of a second wind blowing in a housing market that had been buffeted by caution and anxiety.
"Compared to what my friends in California and Las Vegas tell me, New York seems to be holding its own," said Dottie Herman, chief executive of Prudential Douglas Elliman.
Pamela Liebman, president and chief executive of the Corcoran Group, said, "It shows that the New York market, after having a lackluster fourth quarter, is back in full swing with strong numbers across the board." She said recent transactions logged by her firm suggested that the stronger sales trend would continue into next quarter's figures as well.
Indeed, according to sales figures provided by Prudential Douglas Elliman, the number of sales of apartments with two or more bedrooms rose 44 percent in the first quarter of this year, to 1,017 from 705 in the last quarter of 2005.
Yet there were some signs of caution in the figures released yesterday. Although prices were up 7 percent to 8 percent from figures reported a year ago, depending on the report, they remained below the spikes in prices reported last spring. And the inventories of unsold apartments also rose significantly, with a rising supply of new condominiums coming to the market. Hundreds of additional new or newly converted condominium apartments are due to come on the market this year.
Each brokerage firms tracks inventory differently, but in the first quarter they showed the same trends. Prudential Douglas Elliman put the current unsold inventory of apartments at 6,904, up 60 percent from the 4,327 it reported a year ago and 16 percent from the previous quarter. Corcoran listed 9,206, more than double the 4,492 it listed a year ago, and up 10 percent from the previous quarter.
Jonathan J. Miller, president of Miller Samuel, an appraisal firm that prepared the Prudential Douglas Elliman report, said that when the changing mix of apartments sold is taken into account, using the average price per square foot, condo prices actually declined slightly from the previous quarter, by 4.2 percent, while co-op prices rose by 2.8 percent.
Mr. Miller said that looking at the numbers this way suggested that price appreciation was "essentially flat."
"Right now I see there being parity between buyers and sellers," he said.
Gregory J. Heym, the chief economist at Halstead and Brown Harris Stevens, offered a more optimistic interpretation. "People really became confident again, and people got bonuses at the end of the year," he said. "The strength continues to be there."
During the second half of last year, sales of studio apartments and one-bedrooms remained strong, perhaps as buyers rushed to lock in mortgage rates, and were up this quarter as well. Although prices per square foot on smaller apartments have sharply trailed larger ones over most of the last decade, Mr. Heym's data showed that average prices on one-bedroom and studio apartments in Manhattan were both about $905 a square foot, close to the $1000 average for all apartments.
Copyright 2006 The New York Times Company
Tuesday, April 04, 2006