At the top end, it’s not quite as bad

Nov.November 02, 2007 11:05 AM

The Manhattan housing market passed the mid-year mark with a mix of good and bad news, depending on your vantage. The luxury market, for one, seems to be fairing slightly better than the market as a whole.

“What’s happening is the upper end is seeing activity I would expect it to see this time of year,” said Jonathan Miller, CEO of appraisal firm Miller Samuel, citing the aftershocks of the record Wall Street bonus season earlier this year. “But the remainder of the market is flat.”

Several luxury sales in the last couple of months have set the tone for the higher end of the market — and have defied the woes of the rest of the market.

Fifteen Central Park West, the new ultra-luxury project along the park, set a North American condo record last month when it passed $1.2 billion in sales, and a condo in 1200 Fifth Avenue in East Harlem hit the market in June for $19.5 million. If it commands close to this asking price, the condo at 101st Street will set an above-96th Street sales record for Manhattan. (Even Red Hook, a few years ago an industrial outpost, set a home sales record in June, when a townhouse in the Brooklyn neighborhood sold for $1.06 million.)

Sales numbers and asking prices like these have driven luxury brokers to say they expect to see around the same number of eight-figure deals in Manhattan this year as last year when 2006 is all said and done.

Still, the average apartment sales price for all of Manhattan continued to slide from April through May just as it did from March into April. The boom is over, in other words, but don’t tell those dealing at the higher-end. The last, lingering effects of the record Wall Street bonus season still reverberate, brokers say, and luxury customers don’t really sweat the recent mortgage rate hikes.

“That end of the market isn’t really affected by the sort of nerves at the lower end of the market,” said Sabrina Kleier, a vice president at boutique brokerage Gumley Haft Kleier. “There are always people out there who want that perfect apartment. There seems to be more deals in double-digits this year than I’ve seen in other years already.”

The latest comprehensive numbers on the luxury market show it stronger against the market generally. The average sales price for luxury apartments in Manhattan jumped nearly 10 percent from the fourth quarter of 2005 through the first quarter of this year to $4,547,201, according to appraisal firm Miller Samuel, which defines the luxury market as the top 10 percent of all apartment sales. That’s a bit higher that the 9.6 percent increase seen for the market as a whole, with the average price rising to $1,300,928 in the first quarter.

Perhaps more importantly, the volume of luxury sales, too, picked up from the end of 2005 to April, increasing 27.4 percent to 200 sales during the first quarter in Manhattan, though second quarter numbers coming out at the beginning of July will tell whether this trend holds.

Back in the overall market, a May report from brokerage Halstead Property showed the average price of all Manhattan apartments slipping from $1,236,287 in April to $1,149,211 in May — a 7 percent decline month over month. The average sales price had already slid 6.8 percent from March to April.

This marked the first time in more than a year that the average sales price has declined two consecutive months. Maybe these spring woes for the overall market are leaving even luxury buyers a tad more skittish now, despite the relative health of the higher-end.

“Location matters now more than ever before [to luxury buyers],” said Leonard Steinberg, a Prudential Douglas Elliman executive vice president who specializes in the Downtown luxury market.

“And buyers seem less likely to take on the risks of ’emerging’ neighborhoods, unless they offer something in the price to justify the risk,” he said.


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