April 3 (Bloomberg) -- Manhattan's median apartment price rose 1.2 percent in the first quarter from a year earlier, the smallest quarterly gain in five years, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said.

The median price of all co-ops and condominiums in Manhattan, the most expensive urban real estate market in the U.S., rose to $835,000. The growth was the slowest since the first quarter of 2002, said Jonathan Miller, president of Miller Samuel, the borough's largest appraiser. Units with four bedrooms or more surged 11 percent to a median $6.45 million, while studios, one-, two- and three-bedrooms fell by 1.2 percent to 2.8 percent.

``The market definitely is taking a breath,'' said Tresa Hall, executive vice president and director of sales at The Corcoran Group, the New York real estate brokerage, which released its own report today.

Manhattan's slowing growth comes as home prices fall across the country. In the fourth quarter, the median price for a single- family home fell in 73 of 149 metropolitan areas studied by the National Association of Realtors. The national median price for a previously owned house was $219,300, down 2.7 percent from a year earlier, the group said in a report.

Manhattan price growth may be poised to accelerate as buyers look for new apartments before September, when the 2007-2008 school year begins, Miller said.

``Everybody thinks that's the best time,'' said Dottie Herman, Prudential Douglas Elliman's chief executive officer.

`Bullish' on New York

The supply of available apartments fell by 14 percent to 5,923 on the last day of the quarter compared with 6,904 a year earlier, according to the Miller Samuel report.

Gregory Heym, chief economist for New York real estate company Terra Holdings, said he remains ``bullish.''

``Interest rates are affordable, and it doesn't appear that will change and the city's economy is very strong,'' said Heym. Terra Holdings owns New York brokerages Halstead Property LLC and Brown Harris Stevens and produces its own report.

Manhattan's prices were the third-highest ever and reflect sales of 3,474 apartments. They were higher in the second and third quarters of 2006, the peak of the city's five-year housing boom.

London Apartments

In London, home prices are increasing at a faster rate than in other parts of the U.K. because of a shortage of properties on the market. In March, average prices climbed at an annual rate of 22 percent, according to real estate Web site Rightmove Plc. Kensington and Chelsea, the district where film star Hugh Grant lives, led the gains, rising 83 percent to an average of 1,208,981 pounds ($2,395,000).

Average apartment prices in Paris gained about 10 percent in 2006, the slowest rate in seven years. The price climbed to 5,772 euros per square meter ($716 a square foot), according to a report published today by the Paris Chamber of Notaries.

Average prices can be skewed by a few high- or low-end sales. Medians, which were used in calculating New York's sales figures, mark the mid-point of prices in which half of prices were below the number and half above.

Co-operative apartments in Manhattan, where residents own shares in a corporation that owns their building rather than having title to the apartment itself, make up about two-thirds of the Manhattan market. Their median price rose 1.5 percent to $675,000 for the quarter ending March 31 compared with a year earlier.

Those units tend to be older than the city's condominiums, which allow owners to hold deeds directly. Miller Samuel reported median condominium prices rose 1.6 percent to $990,000, reflecting in part an infusion of new luxury construction.

Overall, the median price of studio and one-bedroom apartments fell 2.3 percent to $390,000 and $635,000, respectively, while the price of two-bedroom units fell 2.8 percent to $1.3 million and three bedrooms declined 1.2 percent to $3.1 million, Miller Samuel said.

In Brooklyn, the city's most populous borough, the median price of all apartments rose 12 percent to $560,000, according to Corcoran's report.

``There is a lot more product to choose from in Brooklyn right now,'' Hall said.

-- With reporting by Simon Packard in London. Editor: Urban (psg/scc/adb).

To contact the reporter on this story: Sharon L. Crenson in New York at screnson@bloomberg.net.

Last Updated: April 3, 2007 10:36 EDT