Luxury sales were way up, but the rest of the market lagged.

At first blush, the fourth-quarter Manhattan market reports would seem to be evidence of a holiday miracle: co-op boards were overwhelmed by contracts, inventory plummeted, prices skyrocketed and a tremendous amount of money changed hands.

Manhattan ended 2012 with a grand finale: more fourth quarter sales than it has seen in 25 years, according to Douglas Elliman, and the lowest level of inventory in more than a decade. Alas, as is increasingly the case in the Manhattan real estate market and the city at large, the wealth was not spread out evenly in the end-of-the-year closings. The trophy market, while shining brightly, is something of a false beacon when it comes to the Manhattan real estate. It illuminates the seemingly unshakeable good fortunes of the world's wealthiest, but does not reveal the decidedly uncertain recovery and unstable footing of the financially struggling masses.

These were not one-bedrooms facing air-shafts or second-floor studios changing hands at such a hurried speed during the last three months of the year, but sprawling co-ops in white-glove buildings. The fourth quarter saw 37 closings above $10 million, the majority of them on the Upper East Side, according to Streeteasy. There was also a 142 percent increase in the number of contracts for properties above $10 million. And buyers certainly had their pick: in 2012, 644 properties priced above $10 million came on the market, the highest number in the last five years.

Viewed purely as an increase in sales volume and prices, the numbers might seem more encouraging than they really are: high-end sales pulled the average Manhattan sales price up 7 percent (to $1.48 million) over the fourth quarter of 2011, according to the Halstead market report, and the media price up 6 percent (to $836,000). Both time on the market and price cuts decreased. It was, as the Streeteasy report notes, the best year for real estate since 2008 (even if the median price in 2008 remains 9 percent above the 2012 median price).

It's too bad that the frantic pace of fourth quarter closings was not a sign of economic optimism, but rather pessimism: a last ditch attempt on the part of the haves to have more before the tax codes changed on January 1. And while no one would buy or sell a luxury condo for a favorable tax rate alone, the change means that many sales that might otherwise have closed in the first quarter of 2013 now belong to the previous year's tally. Fear of the fiscal cliff caused a flurry of activity, which is unlikely to be repeated in the New Year, despite the fact that we did not fall over said cliff. In 2013, the capital gains tax will go from 15 percent to 23.8 percent, reducing any sense of urgency to sell trophy properties. Low mortgage rates, which helped to fuel sales in 2012, are also likely to rise this year.

“With the upcoming changes in tax laws, record low interest rates and the inventory of available apartments at 30% below where it was a year ago, the incredible activity in the fourth quarter was not surprising,” Hall. F. Willkie, president of Brown Harris Stevens Residential Sales, said in a statement about the market reports, noting that the brokerage's report does not include the few substantial sales that closed in the very last days of the year, which would likely bring the total even higher.

However, other market analysts cautioned that the activity at the very top and bottom of Manhattan's real estate market does not mean that the market is healthy or well within recovery mode. Besides the luxury market, the only other strong category are entry-level apartments, largely purchased by people who were pushed into the sales market by record-high rental prices. Mid-range apartments remain oddly untouched. "At best, the recovery is nascent, fragile and fragmented," the Streeteasy report warns. "In a healthy market... buyers from all segments... would be clamoring to take advantage of the record-low mortgage rates."

kvelsey@observer.com

More, more, more!

So many of 15 Central Park West's residents have flipped their apartments for such massive sums that it sometimes seems like the whole building is cheating at tiddlywinks with the New York real estate market. Especially after the $88 million sale of Sandy Weill's apartment, residents might be forgiven when they list their apartments for prices that seem somewhat deluded. Still, Leroy Schecter's bid to make $40 million for tearing down a wall seems straight-up delusional.

The octogenarian steel magnate is aiming to break sales records and pocket tens of millions of dollars by conjoining two 35th-floor apartments that he paid a total of $18.9 million for, The Wall Street Journal reports. The asking price? $95 million.

If you think that's audacious, consider, also, that Mr. Schecter's apartment is 20 percent smaller than Mr. Weill's and that he listed the same two apartments—unconnected—for $55 million in 2010. Mr. Schecter told The Journal that he walked away from a $48 million offer for the duo back then, apparently feeling that two and a half times what he paid for the units was simply not enough.

Are there really buyers out there who hate the idea of undertaking (or more accurately, supervising) a renovation so much that they're willing to pay a premium of $40 million to have someone else do it for them? Although combined apartments are traditionally worth more than two separate apartments—a phenomenon appraisal guru Jonathan Miller refers to as the 1+1 = 2.5 principle—a $95 million ask far exceeds that rule.

But Mr. Schecter tells The Journal that he is not worried.

"Nobody knows what the right price is," he said. "If you had $10 billion and you are trying to put in a good place, you aren't going to put it in a bank, you are going to try to buy good real estate with it."

While Dmitri Ryboloblev's $88 million purchase has been an inspiration to so many of the city's most avaricious property owners (ahem, CitySpire) it's far from clear that the sale has ushered in a new era of astronomically high gets so much as an era of astronomically high asks. After all, rumors abound that Mr. Ryboloblev's cavalier way with a checkbook may have had more to do with keeping money from his soon-to-be ex-wife than anything else. The realities of the fertilizer king's divorce notwithstanding, the one-off nature of his big, big buy would seem to be borne out by the fact that the other trophy sales during the last six months have been in the $50 million-to-$70 million range.

But nothing wrong with a little ambition, right? Apparently, Emily Beare, Mr. Schecter's broker at CORE, didn't see any reason to dissuade him from a $95 million ask. If the place doesn't sell, he can always try to set rental records (Mr. Schecter once collected $70,000 a month in rent from the two units—leased to A-Rod and Henry Silverman, the founder of Cendant Corp).

And even as Mr. Schecter licks his lips at the prospect of making a $76 million profit, he's always thinking of the little guy. A least a little bit. He tells The Journal that a portion of the proceeds from the sale will go toward his charitable foundation, which is planning to help people living in poverty in the New York area. By contrast, Sandy Weill claims (!) to have given all the money from his place to charity. What noblesse oblige!

kvelsey@observer.com