Quarterly Figures Defy Dour Predictions

If you’re a buyer looking for a good deal in the Manhattan housing market, consider condominiums.

The average, median and average-per-square-foot prices of Manhattan condos dropped from the fourth quarter of 2006 through the first quarter of 2007, according to a report out Tuesday by the brokerage Prudential Douglas Elliman and the appraisal firm Miller Samuel.

But “dropped” remains a relative term in a Manhattan housing market that has apparently started 2007 with a bang, with just about every other sales-market barometer even more favorable to apartment sellers (and their brokers).

Take co-ops. The average sales price for a Manhattan co-op was up 8.1 percent from the fourth quarter of last year through the first quarter of this year, to $1,132,325, according to Miller Samuel and Douglas Elliman. The median price increased 3.8 percent, to $675,000; and the price per square foot jumped 11.8 percent, to $975.

Or take the numbers for both condos and co-ops in the first quarter, which ended March 31. The average sales price was up 5.4 percent, to $1,290,391, and the median was up 4.5 percent, to $835,000. The price per square foot again reached above $1,000.

Such numbers remain within the parameters and the expectations of 2004 and 2005—and even 2006, a year supposedly not as lamented by brokers and sellers as the latter two, a year when the housing boom that snapped, crackled and then popped in most of the rest of the United States was supposed to have done so here, but didn’t.

Instead, things got ever rosier.

In fact, Manhattan housing has ambled uphill on a trajectory that shouldn’t make the strong first-quarter numbers at all surprising.

In the first quarter of 2004, the average sales price set a then record of $998,905. Within a year, that record had been rendered quaint, as the average sparked international headlines by climbing—and staying—above $1 million, forever, it seems, placing Manhattan condos and co-ops largely out of the reach of, well, hundreds of thousands of Manhattanites.

It wasn’t supposed to be this way. The numbers stepped onto the stage last year and didn’t follow the director—the national zeitgeist that said the boom was over.

The American economy greeted the 2006 sales-market slowdown with all the joy of a dentist’s waiting room.

In Manhattan itself, anxiety, apprehension, even dashed dreams on a Gatsby-like scale reigned over an industry whose broker ranks had swelled in the previous two years and whose new-development marketing burned to such a fever pitch as to render the word “luxury” impotent. Would new brokers still be able to become millionaires through commissions? Would sellers be able to cash out of co-ops they bought in the 1990’s at prices 200 percent less than today’s?

2007 had to be good, the thinking went, or things were really bad.

The verdict of the first-quarter numbers should hearten all but potential buyers. They now still confront a forbidding market—but, increasingly, with each passing quarter and year, the shock fades. You paid $1 million for a one-bedroom? So what? That two-bedroom runs $4 million in that neighborhood? Oh, I’m not surprised.

The conversation has shifted from awe to aw, shucks. Anyone still mesmerized by numbers like the first quarter’s must either be (a) from way out of town or (b) lying.

The 2006 numbers stayed solid throughout the year (even in comparison to 2007’s strong first-quarter numbers), never descending to any depths—despite, one can imagine, the most fervent hopes of media and other analysts tired of the same story line.

The average sales price in the first quarter of 2006 was more than $1.3 million, above the first quarter this year. The median was nearly identical a year ago to the median now—a difference of only $10,000. (What’s $10,000 in Manhattan and its housing market?)

And sales? Surely sales have dropped as the prices have steadily increased?

No. The numbers, again, skewed from the script. Condo and co-op sales rose 42.3 percent in the first quarter from the fourth—and more than 73 percent from the first quarter of 2006. Condo sales spiked more than 72 percent quarter over quarter, and co-op sales nearly 22 percent. Sales in the luxury market—defined by Miller Samuel as the upper 10 percent of all co-op and condo sales for the quarter—increased 42 percent over the fourth quarter.

Credit the record Wall Street bonus season of late 2006 and early 2007. Or the steadily low—historically, at least—mortgage rates. Or the strong local economy, with its low unemployment rate.

Or just the ether, that certain something that has driven the Manhattan housing market toward the indefinable—making it as difficult to predict its demise in 2006 as it is to define its success in 2007.

Quarterly Figures Defy Dour Predictions