Gregory J. Heym
Executive Vice President, Chief Economist
By JOSH BARBANEL
Despite some signs of a weakening market, Manhattan's lofty real estate prices were little changed during the last quarter, according to a series of market reports released yesterday.
The reports showed that the number of apartments on the market rose and the number of sales fell during the second quarter of the year, a shift that suggests an increase in bargaining power for buyers rather than sellers.
But with the economy strong and apartments in demand, buyers so far have not been able to translate that market power into lower prices over all. According to one report, released by Prudential Douglas Elliman, average sales prices of Manhattan apartments were up to $1.39 million, an increase of 6.6 percent over the prices in the first quarter of this year and 5.2 percent above those in the same period a year ago.
"People out there wondering whether it is the right time to buy should make a decision based on their lifestyle, not by trying to sharpshoot the market," said Pamela Liebman, president of the Corcoran Group. "When sellers lose their patience they will allow the prices to go down. Right now there is a lot of demand to support prices."
She said that sales activity picked up toward the end of the quarter, in deals that had not closed and were not counted in the second-quarter statistics.
Each of the reports, using different methodologies, came up with different figures but similar explanations. While the Elliman report showed overall prices up modestly, a report by the Corcoran Group and another by Brown Harris Stevens and Halstead showed a similar decline, by less than 5 percent.
In each case, prices of cooperative apartments, which are usually located in older apartment buildings with stricter rules, showed more strength than newer condominiums. Douglas Elliman reported that average sales prices of co-ops rose by 18 percent over the prior quarter, while Brown Harris Stevens showed a 7 percent increase, and Corcoran showed a 1 percent decline. Prices on two-bedroom co-ops rose sharply in several of the reports.
Condominium prices were weaker, but the declines were attributed to scores of sales in new condominiums with smaller, less expensive apartments. Last year, when average apartment prices set records, there were many multimillion-dollar sales in other new condominiums, like the Time Warner Center in Columbus Circle.
Gregory J. Heym, the chief economist for Terra Holdings, which owns Brown Harris Stevens and Halstead, noted, for example, that while condo prices over all fell by 15 percent from the previous quarter, prices for one- and two-bedroom condos rose somewhat.
"With the economy this strong, we are not going to see a huge swaying of the market, one way or the other," he said, but rather "a gradual change in different segments of the market based on supply and demand."
Douglas Elliman reported that the average condo sales price fell by 1.9 percent to $1.45 million. It put the median price of a Manhattan condo at $990,000 and a co-op at $722,000.
Jonathan J. Miller, the president of Miller Samuel Inc., the appraisal firm that prepared the Elliman report, said the inventory of 7,640 condos listed in the second quarter was up 10 percent over the previous quarter and 53 percent over a year ago. He found the number of sales was down 3.5 percent from the last quarter, often the slowest of the year, and 15 percent from a year ago.
And despite the decline in condominium prices, he said that for the second month ever, condo sales made up more than half of all sales, even through there are far more co-ops in Manhattan. He attributed that to the intensive marketing campaigns for new condominiums.
Copyright 2006 The New York Times Company
Thursday, July 06, 2006