Update on First Quarter Reports: We’re Thousand Island!

It’s time for the quarterly reports again! And as always, the brokerages are breathing largely the same rarefied air inside Manhattan’s still-robust real-estate bubble.

The headline is that the average price for a Manhattan apartment topped $1,000 a square foot to reach a new record, according to reports issued today by all four major Manhattan brokerages: Douglas Elliman, The Corcoran Group, Brown Harris Stevens, and Halstead.

Inventory is also expanding across the market–a worrying indicator as increased supply puts strains on the stratospheric climb of prices in the Manhattan real-estate market.

David Lombino of The New York Sun talked to real-estate maven Jonathan Miller, author of Douglas Elliman’s report:

“With the inventory coming on, we are reaching a saturation point,” an appraiser who is an author of one of the reports, Jonathan Miller, said. “It’s significantly different from a year or two ago, when these apartments would sell the second they got built.”

Mr. Miller’s analysis shows a nearly 16% spike in inventory between the first quarter of 2006 and the last quarter of 2005, and a nearly 60% spike in the number of apartments on the market since the first quarter of 2005,when a hot market led to a record low inventory. Mr. Miller said that if the demand for luxury housing drops due to a spike in mortgage rates or another scenario, it could lead to a glut.

(Incidentally, Miller has rounded up all of the morning’s coverage, so I don’t have to! Find it here.)

In his report, Miller also had another caution:

“Price levels moved up this quarter but the pace of price increases has eased,” he wrote in notes accompanying the report he prepared for Douglas Elliman. “Much of the price gains this quarter were attributable to a shift in market share of larger units influenced by Wall Street bonus money.”

Take them out, and gains were modest or flat.

Also, reading Halstead’s report might change your idea about what kinds of apartments those Wall Street honchos were buying: “The average price per square foot for apartments in new developments was $1,075 during the first quarter, down from $1,200 one year ago. ‘This decline is due in part to a decline in the percentage of luxury condo closings in this category,’ noted Gregory Heym, Halstead Property’s Chief Economist.”

By the numbers:

Average Sale Price

Douglas Elliman
Up 7.1 percent over the first quarter of 2005.
Up 10.3 percent over the fourth quarter of 2005.

Corcoran
Up 8 percent over the first quarter of 2005.
Up 16 percent over the fourth quarter of 2005.

Brown Harris Stevens
Up 8 percent over the first quarter of 2005.
Up 15 percent over the fourth quarter of 2005.

Halstead
Up 8 percent over the first quarter of 2005.
Up 15 percent over the fourth quarter of 2005.

Average Price Per Square Foot

Douglas Elliman
Up 10.3 percent over the first quarter of 2005.
Up .2 percent over the fourth quarter of 2005.

Corcoran
Up 14 percent over the first quarter of 2005.
Up 6 percent over the fourth quarter of 2005.

Brown Harris Stevens
Up 12 percent over the first quarter of 2005.
Up 10.3 percent over the first quarter of 2005.

- Tom McGeveran