Manhattan prices increase over decade ending in 2008

By Sara Polsky | March 02, 2009 11:14PM

While 2008 saw the collapse of Wall Street, Manhattan prices were still in better shape in 2008 than a decade earlier, according to three 10-year market reports released by Prudential Douglas Elliman today.

The average sales price of co-op and condo units surged 207.2 percent between 1999 and 2008 to $1.59 million, and the number of sales increased to 10,299 from 9,522, according to the overall Manhattan report.

Townhouses, the subject of the second report, saw a 192.1 percent rise in average sales price to $7.37 million over the prior decade while sales increased 6.3 percent to 151 in 2008.

“We had a steady rise in prices over the last five years,” said Jonathan Miller, president of real estate appraisal firm Miller Samuel, which prepared the reports for Elliman.

Over the decade, in the Hamptons and the North Fork, which are covered
in the third report, the average sales price jumped 256 percent to
$1.49 million 2008, while sales volume plummeted 54.4 percent to 1,659

Compared to 2007 – when there were the greatest number of sales – the 2008 sales volume in Manhattan was down, but prices increased, according to the Manhattan market report, which actually provides a recap of the past year and was designed to be used to determine price and sales trends for the prior decade. In 2008, the number of sales dropped from the 13,430-unit record in 2007.

The most significant lesson of the 10-year report, said Dottie Herman, Elliman’s CEO, is that real estate is cyclical.

“A 10-year report has nothing to do with 2007 or 2008 or comparing those two years,” Herman said. “If you look, you’re going to see that the prices dipped in 2001…and [then] the prices were going up in the normal increment.”

Today’s market troubles are “really more of a credit problem for New York City than a housing problem,” she added. “If tomorrow somebody came out and said, ‘we’re back to the subprime mortgages,’ I guarantee you prices would start to rise again.”

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