Prices stayed down and inventory remained steady in Manhattan in the third quarter of 2006, leading brokers to look months ahead, past the winter, to a spring they say will be much more active and lucrative.
The average third-quarter sales price for a Manhattan apartment declined 7 percent to about $1.29 million from the second quarter, said a report last month from appraisal firm Miller Samuel and brokerage Prudential Douglas Elliman. The average had stood at a record of around $1.39 million in the second quarter.
The average price per square foot for a Manhattan apartment in the three months through the end of September also decreased 3 percent to $1,050, from a record second-quarter mark of $1,083. The median sales price, which reached an all-time high of $880,000 in the second quarter, settled down 4 percent to around $845,000.
“Unit sales are down, and prices pretty much flat to slightly down,” said David Michonski, CEO of brokerage Coldwell Banker Hunt Kennedy. “We’re in this for another good six months. It may be March of next year before we have price changes.”
Michonski gets regular feedback on the Manhattan sales market from his firm’s brokers. “Buyers are pretty much putting their hands in their pockets as they wait,” he said, “and more and more food gets fed to the banquet table. And they wait to see what else gets added to the picture.”
Inventory steady
The inventory of unsold Manhattan apartments dropped slightly but remains high, and the time it takes to sell an apartment increased by nearly a week on average in the third quarter.
After six consecutive quarterly increases, inventory in the third quarter decreased, but only marginally. Listing inventory for Manhattan apartments was down 0.2 percent to 7,623 units. Inventory set a record in the second quarter, with 7,640 units on the sales market.
The most recent inventory number, while a quarter-over-quarter decrease, is 32.3 percent higher than the inventory in the third quarter of 2005.
New development boosted the inventory of condos by 11.5 percent over the second quarter. Co-op inventory was down 10.4 percent quarter over quarter.
The number of days it takes to sell an apartment increased by six days to 150 days on average from the second through the third quarter. That’s 17 days more than the third quarter of last year.
Sales up
The number of Manhattan apartment sales hit 2,113 in the third quarter, up 9.3 percent from the second quarter and up 5.8 percent from the third quarter of 2005, according to Miller Samuel.
But the increase was due mainly to changes in the collection of co-operative apartment data, said Jonathan Miller, CEO and president of Miller Samuel. A state law enacted in August makes co-op sales and price data public.
“The rise in the number of sales this quarter is less indicative of the market,” Miller said, “and more indicative of the changes in collection.”
Co-op sales were up 30.8 percent from the second through the third quarter to 1,087. Condo sales, however, slipped 7 percent quarter over quarter to 1,026. This drop in condo sales more accurately depicts the overall market in the third quarter, Miller said, where inventory stayed high as prices dropped.
Co-op prices slump
Co-op prices dropped more sharply than condo prices in the third quarter.
The average sales price for a co-op was down 16.1 percent from the second quarter through the third quarter, when it leveled off around $1.09 million. The price per square foot dropped 6 percent to $935, and the median price ended the third quarter down 5.1 percent to $685,000.
At the same time, condo sales prices increased in the third quarter. The average price was up 3.3 percent over the second quarter to reach around $1.5 million, and the median increased 7.6 percent quarter over quarter to around $1.07 million.
The price per foot for a Manhattan condo was $1,171 in the third quarter, up nearly 2 percent from the second quarter.
Bigger apartments pricier
Bigger Manhattan apartments got pricier in the third quarter, while prices for smaller ones generally dropped.
The average sales price for a one-bedroom apartment was down 2.7 percent from the second quarter to around $705,000 in the following three months. The price for a two-bedroom also dropped over the same period 4.2 percent, Miller Samuel reported.
But the average price of Manhattan three-bedrooms jumped 5.3 percent quarter over quarter to around $3.75 million, and the price of apartments with at least four bedrooms was up 8.8 percent to around $7.33 million.
These price increases reflect the buyer mentality behind larger spreads. Simply put, big apartment buyers have big money. They are not as sensitive to mortgage rate fluctuations and other economic factors as buyers of smaller apartments, said Ilan Bracha, an executive vice president at Douglas Elliman.
“The market’s moving in the three- and four-bedrooms more aggressively,” Bracha said. “In the others, it’s moving, but not as aggressively.”