Gregory J. Heym
Executive Vice President, Chief Economist
By CHRISTINE HAUGHNEY
While the national housing market is struggling with rising inventory and weakening home values, the prices and number of apartments selling in Manhattan rose in the first three months of this year, according to data released yesterday by several of New York City’s largest real estate brokerages.
Sales volume in Manhattan was up 12 percent over the fourth quarter of last year, according to data provided by Brown Harris Stevens and Halstead Property.
Those two brokerages also said that the average price for a Manhattan apartment, including both co-ops and condominiums, rose 6 percent in the first three months of this year over the fourth quarter of 2006. The Corcoran Group said prices rose 12 percent, and Prudential Douglas Elliman put the increase at 5.4 percent.
Even greater increases were seen in the prices being paid for the largest apartments in Manhattan and for apartments in Brooklyn. The wealthiest New Yorkers paid 20 percent more for apartments with four or more bedrooms than they did in the first quarter a year ago. Buyers also paid an average of 22 percent more than they did a year ago for Brooklyn apartments, especially those in newly constructed or converted buildings.
The market got off to a robust start at the beginning of this year when brokers and real estate analysts reported that prospective buyers were crowding open houses and engaging in bidding wars.
“In the second quarter, I think we’re going to see more appreciation because of the high level of activity” early this year, said Jonathan Miller, president of Miller Samuel, an appraisal firm.
Brown Harris Stevens reported that the average price of an apartment in Manhattan rose to $1.22 million in the first quarter of this year, up from $1.14 million in the last quarter of 2006, but down from $1.26 million in the first quarter of 2006. The Corcoran Group and Prudential Douglas Elliman reported similar trends.
The numbers indicate that New Yorkers are not resorting to the extremes that were common in the market several years ago, when some buyers fought for apartments they had barely seen.
In the past year, demand slowed but more recently picked up, data showed.
“People were holding back a little bit more a year ago,” said Hall Wilkie, president of Brown Harris Stevens, though he added, “Anybody who was holding back, isn’t.”
While all of the brokerages reported that sales volume increased in the first three months of this year from the fourth quarter of 2006, they reported vastly different numbers. Several companies reported a 10 percent to 12 percent increase, but Prudential Douglas Elliman reported a 42 percent increase. Dottie Herman, the company’s president, said that number might partly be the result of the company’s increased reporting of co-op sales.
Some researchers noted that even though Wall Street experienced one of its most profitable bonus seasons, those buyers did not drive up the market as much as expected because they had so many co-ops and condos from which to choose.
Mr. Miller, the appraiser and author of the Prudential Douglas Elliman quarterly report, pointed out that Manhattan had 5,923 co-ops and condominiums for sale in the first quarter of 2007, compared with the median quarterly average of 5,200 over the last five years. He said that the large number of new condominiums about to be completed were keeping prices from rising too quickly.
The researchers said that the Wall Street money seemed to have the biggest effect on apartments with four bedrooms or more. Buyers paid roughly 20 percent more for an apartment with four bedrooms or more than they did in the same quarter last year. That translated into an average price of $7.9 million, according to data provided by Brown Harris Stevens and Halstead Property.
“You are paying a substantial premium for that fourth and fifth bedroom,” said John Burger, a managing director with Brown Harris Stevens and a specialist in these high-priced apartments. “The people will only step up to that size point if they need that space — two children at home, a child visiting from college.”
Buyers also seemed more willing to pay higher prices for new condominiums in Brooklyn. Corcoran said the average overall prices in Brooklyn rose 22 percent, to $628,000 in the first quarter of this year from $514,000 in the first quarter of 2006.
Frank Percesepe, a Corcoran Group regional vice president based in Brooklyn, said that so far there have been takers for the thousands of units that have been completed. “The more inventory that we’ve been getting, the more inventory we’ve been selling,” he said.
Copyright 2007 The New York Times Company
Tuesday, April 03, 2007