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Manhattan Apartment Sales Slow as Buyers See No Need to Rush

Manhattan Apartment Sales Decline
Floor to ceiling windows illuminate the living room of an apartment in 331 East 91st Street, in New York, U.S. Purchases of condominiums and co-ops declined 3.8 percent from a year earlier to 2,650. Photographer: Daniel Acker/Bloomberg

Manhattan apartment sales and prices fell in the second quarter from a year earlier, as the absence of a federal tax credit created less urgency to complete deals.

Purchases of condominiums and co-ops declined 3.8 percent from a year earlier to 2,650, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The median price of co-ops and condos that changed hands in the borough dropped 5.5 percent to $850,000.

In 2010, buyers in contract rushed to close deals before an initial June 30 expiration of a government tax credit of as much as $8,000. That deadline “artificially inflated” sales volume and values for the second quarter, Jonathan Miller, president of New York-based Miller Samuel, said in a telephone interview. For the three months ended yesterday, the number of purchases and property values were about the same as they might have been a year earlier without the incentive, he said.

“People don’t feel as though prices are going down, but there’s not this overwhelming feeling that prices are increasing by the day,” said Pamela Liebman, chief executive officer of the Corcoran Group brokerage, which also released a report on the Manhattan sales market today. “People feel that they can wait a little bit to find what they want.”

New York City’s jobless rate was at a 25-month low of 8.6 percent in May, unchanged from the previous month and down 1 percent from a year earlier, the state Department of Labor said on June 16. The city’s financial industry showed a net gain of 10,400 jobs in the 12 months through May.

Days on the Market

Manhattan properties stayed on the market an average of 136 days, or 30 percent longer than a year earlier, according to Miller Samuel and Prudential. Listing discounts, which measure the amount of money sellers subtracted from their last asking price to strike a deal, fell to 3.5 percent from 9.1 percent.

“I would describe it as stable,” Miller said. “It’s not booming, it’s just solid.”

Luxury apartments saw an increase in values, with the median price climbing 11 percent to $4.55 million from a year earlier, according to Miller Samuel and Prudential. Buyers of luxury units, defined as the top 10 percent of all sales by price, opted for apartments that were 4.6 percent larger, averaging 2,935 square feet (273 square meters).

For apartments in new developments, the median sales price fell 19 percent to $1.13 million and the number of purchases declined 7.2 percent to 577, Miller Samuel and Prudential said. Units in new developments made up about 20 percent of all sales in the quarter, up from an almost seven-year low in the first three months of the year, when their market share was 15 percent.

Corcoran, StreetEasy

Five reports issued today on the Manhattan apartment market showed mixed results for sales and values in the second quarter. Corcoran Group said purchases of condos and co-ops declined 14 percent from a year earlier to 3,180. The median price of units that changed hands climbed 6 percent to $830,000., a service that compiles broker listings, said the median price increased 7.8 percent to $810,000, while completed deals fell 12 percent. Brokerage Brown Harris Stevens and its sister firm, Halstead Property LLC, reported a median price of $835,000, a 1 percent drop from 2010.

“My opinion of prices throughout the market is they’re not going up and they’re not going down,” said Hall Willkie, president of New York-based Brown Harris Stevens. “Buyers are buying but they are very price-sensitive. The confidence that real estate is going to be worth more tomorrow is not that common. It’s very possible that in the immediate future prices will remain flat.”

‘Even Playing Field’

For Lindsay Luppino and her parents, this spring was as good as any time to make a purchase.

“They wanted to buy because the market is on its way back up,” said Luppino, 29, a musical-theater performer whose parents bought her a one-bedroom co-op in April.

Luppino looked at 20 apartments before deciding on a third-floor unit on West 56th Street, which she’ll share with her brother. The apartment, with exposed brick and an open kitchen, was on the market for 103 days and sold for $468,000 -- a cut of 6.2 percent from its original asking price, according to StreetEasy.

“I think it’s more of an even playing field now,” Luppino, a former property broker, said of the Manhattan sales market. “I did real estate in 2005-2006, in the heyday. Back then it wasn’t even fair for buyers.”

Peak to Trough

Average resale values of Manhattan apartments fell 31 percent from their peak of $975,000 in the second quarter of 2008 to the trough of $675,000 in the first three months of 2009, according to Miller. The figures don’t include sales at new developments. Since then, there have been no dramatic price swings, Miller said.

Sarah and Greg Bengzon of Herndon, Virginia, said the stability of the Manhattan market compared with the rest of the country made it a good place for a second home. The couple, seeking to diversify their investments, sealed the deal on June 23 for a one-bedroom, prewar co-op on the Upper West Side. Their purchase price was $435,000.

“We have a lot of investments in stocks at the moment, so we thought it’d be good to invest where it’s low,” said Sarah Bengzon, 42, a quality director for technology consulting company Accenture Plc. “The rates were great, the housing prices were great. We’d been looking a while for where we could put our money.”

One, Two Bedrooms

Two-bedroom apartments comprised 38 percent of all properties that sold in the quarter, according to Miller Samuel and Prudential. The median price rose 5 percent to $1.31 million from a year earlier. One-bedrooms accounted for 36 percent of sales, with the median price dropping 1.8 percent to $627,500.

The median price of three-bedrooms climbed 20 percent to $3.1 million, while apartments with four or more bedrooms climbed 18 percent to $5.5 million.

On the Upper East Side, the median price of existing co-ops climbed 3 percent to $840,000 from a year earlier, according to Corcoran. Condo prices in the neighborhood rose 12 percent to 1.2 million. On the Upper West Side, the median price of co-op resales climbed 7 percent to $772,000, while condo resale prices fell 14 percent to $898,000.

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