Manhattan real estate finally starts to cool
Home prices fall; average price per square foot declines slightly from last quarter.
NEW YORK (CNNMoney.com) -- Manhattan real estate prices fell from the second to the third quarter in 2006, but were still up from the same period last year, according to two reports released Wednesday.
A report by broker Prudential Douglas Elliman showed a mean price loss of 7 percent from the second quarter to the third, to $1.289 million. The median price fell 4 percent to $845,147. The median is the price that evenly divides the distribution of homes; half sell above the median price and half sell below.
For the year, the Prudential report showed 12.1 percent growth in the mean and 12.7 percent growth in the median.
A second report, by The Corcoran Group, showed that the mean sale price declined one percent in the third quarter, to $1.236 million. The median rose 10 percent to $849,000.
For the year, the report showed 3 percent growth in the mean and a 13 percent growth in median sale price.
"The median sale price is up quite a bit because starter-level homes have gotten a lot more expensive," said Pam Liebman, CEO of Corcoran. "A price hike in both types of one-bedrooms - condos and co-ops - has really driven up the median."
The average price per square foot fell 3 percent from the prior quarter to $1,050, according to the report prepared by Miller Samuel, the appraisal firm that computes the data for Prudential Douglas Elliman. The figure was up 6.7 percent over the third quarter last year, when the average price was $984.
There have often been price drops from the second to third quarters of the year - averaging a 1.9 percent decrease over the last 16 years, according to Miller.
Corcoran saw the number of deals rise 7 percent to 2,996 units from the previous quarter, but that figure was down 17 percent from the same period last year.
The Miller report saw a rise in sales of 9.3 percent above the prior quarter - to 2,113 units - which constituted a 5.8 percent increase from the previous year.
Inventory stabilized for the first time after 6 consecutive quarters of increases. It fell 0.2 percent to 7,623 units, according to Miller Samuel. This level was way above last year, however, showing a 32.3 percent increase.
"This was the first time since the end of 2004 that it leveled off," said Jonathan Miller, CEO of Miller Samuel. "But if you look further, the co-op market saw a drop and the condo market continued to increase. Basically new development has been outpacing demand."
The Corcoran study actually showed inventories still up from the second quarter, with a 2.4 percent rise, and up 21.3 percent from the same period last year.
The number of days it took to sell an apartment rose slightly to 150 days, from 144 in the second quarter, according to the Miller report. It took an average of 133 days to sell an apartment in the same period last year.
Condos gain vs. co-ops
The city's spate of new development gave way to a notable statistic - more condos than co-ops changed hands for the first time in the city's history.
"We saw many more condo sales closed than co-ops for the first time. Condos used to be around 20 percent of the market, but now they're around 30," said Liebman. "They're now representing over 50 percent of the total sales."
"I think we'll see condos continue to grow because so many are slated to come online in the next few years. And their influence in New York will continue to grow. It's also good for the co-op market because it makes them even more exclusive."
A great deal of data on co-ops became publicly available in August of this year, allowing the public a glimpse into what had been a secretive market until now.
"Because the city made the co-op transfer data public, it pushed up the number of transactions overall," said Miller. "The volume levels for co-ops were probably stable."
Liebman notes that there have been no signs of weakness in the luxury market, despite the rest of the market's cooling.
The average price per square foot of upscale homes rose four percent to $1,639, while the number of sales rose eight percent from the second to third quarter, according to Corcoran.
"The luxury part of the market is performing extremely well and will continue to. Especially with Wall Street bonuses looking to be healthy this year, and international demand looking as strong as ever," said Liebman.