The average sales price of Manhattan co-ops fell 16.1 percent while the average condo sales price climbed 3.3 percent in the third quarter compared to the second quarter, according to the latest Manhattan Market Overview report prepared by Miller Samuel Inc., a residential appraisal company.
The report, prepared for the Prudential Douglas Elliman real estate company, also revealed that the inventory of for-sale properties dropped about 0.2 percent from the second quarter to the third quarter while rising 32.3 percent from third-quarter 2005 to third-quarter 2006.
The co-op sales data for the third quarter is skewed by the city’s release of more public data on real estate sales, said Miller Samuel CEO Jonathan Miller. For example, the report shows a 30.8 percent jump in the number of co-op sales from the second quarter to the third quarter and a 2 percent drop in co-op sales compared to third-quarter 2005.
“My estimate is that co-op sales would have been flat if not shown a slight decline” if the new public data on co-op sales were excluded, Miller said. “There wouldn’t be … this robust level of activity.”
While overall co-op and condo sales were listed in the report as rising 9.3 percent from the second quarter to the third quarter, and rising 5.8 percent in third-quarter 2006 compared to third-quarter 2005, Miller said that without the addition of the newly public co-op sales data, “We still would have seen a slight up-tick compared to last quarter,” though third-quarter sales would have been lower than third-quarter-2005 sales.
The average sales price of all co-ops and condos in the third quarter was $1.29 million — down 7 percent from the record-setting second quarter and up 12.1 percent from third-quarter 2005. The average price per square foot, at $1,050 in the third quarter, dropped 3 percent compared to a record set in the second quarter and rose 6.7 percent compared to third-quarter 2005.
The average sales price in the third quarter jumped 8.8 percent for co-ops and condos with four or more bedrooms, 5.3 percent for three-bedroom units and 3.4 percent for studios compared to the second quarter, while the price of two-bedroom units fell 4.2 percent and one-bedroom units fell 2.7 percent compared to the second quarter. About 79 percent of all sales in the third quarter were for two-bedroom and one-bedroom co-ops and condos, with studios accounting for 14 percent of sales and units with three or more bedrooms accounting for 7 percent of sales in the third quarter.
Units in Manhattan’s west side increased in price per square foot by 0.8 percent in the third quarter compared to the second quarter, while east side, downtown and uptown co-ops and condos dropped in price per square foot compared to the second quarter, the Miller Samuel report revealed.
On average, Manhattan condos and co-ops spent 150 days on market from the last list date in the third quarter, up 4.2 percent from the second quarter and up 12.8 percent from third-quarter 2005.
The report revealed 1,026 condo sales in the third quarter, down 7 percent from the second quarter and up 15.5 percent compared to third-quarter 2005.
The average sale price of condos with four or more bedrooms rose 27.8 percent to $8.1 million in the third quarter compared to the second quarter. The price of three bedroom condos rose 22.6 percent, the price of studios rose 21.7 percent and the price of two-bedroom condos rose 3.9 percent during that period while the average sales price of one-bedroom condos fell 1.8 percent to $800,731 in the third quarter compared to the second quarter. The average sales price of condos with four or more bedrooms fell 12.2 percent in the third quarter compared to third-quarter 2005.
In the Manhattan co-op market, the average sales price per square foot fell 6 percent in the third quarter compared to the second quarter. The average sales price of two-bedroom co-ops dropped 13.1 percent in the third quarter compared to the second quarter, while the average sales price of three-bedroom co-ops fell 5.8 percent, units with four or more bedrooms dropped 1.1 percent, one-bedroom units rose 1.4 percent and studio units rose 1.9 percent in third-quarter 2006 compared to second-quarter 2006.
In the luxury market, which the Miller Samuel report defines as the upper 10 percent of co-op and condo sales, the average sales price fell 10 percent to $4.5 million in the third quarter compared to the second quarter while rising 17.9 percent compared to third-quarter 2005. The average price per square foot for luxury properties fell 6.6 percent to $1,721 in the third quarter compared to the second quarter and jumped 16.5 percent compared to third-quarter 2005.
David Michonski, CEO for Coldwell Banker Hunt Kennedy, a large Manhattan real estate company, said that a rush of new condominium projects are bringing an oversupply of units into the market, and he estimated that the supply of condos is building up to an inventory of about 2.5 years based on the sales rate.
The overall real estate market has slowed to normal conditions, he said. “We’ve got about 65 percent more inventory on the market than we did a year ago. All that has done is brought us back up to normal,” he said. There is a current supply of about six months worth of for-sale inventory, he said, and that should rise “at least 100 percent” through February or March.
“This market is being guided by the new construction market. It’s not being guided by re-sales,” Michonski said, adding that it may take about six to eight months to pull through this period of oversupply.
Because of the flood of new projects and the slowing market, some projects have been cancelled while others have morphed from condos into rental units, he said. “Some of the projects came a little before their time.”
Buyers definitely have a full menu when it comes to choosing properties these days, he said. “We’re urging buyers to look at it as a buffet table. It’s time to eat when the plates are full and not when the crumbs are left.” The demographics still look good for the city’s real estate market, Michonski said. “None of the fundamentals of the New York City market have changed negatively. Everything is still in place.”
A separate third-quarter real estate report, prepared by appraisal firm Mitchell, Maxwell & Jackson Inc., reported that the average apartment sale price in Manhattan dropped 2.2 percent to $1.14 million compared to the second quarter and was up 5 percent compared to third-quarter 2005. Meanwhile, the company’s third-quarter sales volume index dropped 17 percent from the second quarter while rising 5 percent compared to third-quarter 2005.
The average sale price of lofts rose 7 percent compared to the second quarter, while all other property types showed price drops, the MMJ report revealed.
“The greatest price weakness was seen at the upper end ($2.5 million-plus properties), which is also where a large portion of new supply has come on line,” the company reported, with a 40 percent drop in sales volume, a 14 percent drop in average sale price for units with four or more bedrooms, and a 6 percent drop in average sale price for three-bedroom units compared to the second quarter.
“The weakness in sales was not surprising given the 58 percent run-up in real estate prices over the last five years, the 24,000 new units that have entered the market during the past two years, and the 17 consecutive Fed interest-rate hikes,” according to the report.
Brown Harris Stevens, a real estate company with operations in New York City, Long Island and Palm Beach, Fla., reported that the average price per square foot of Manhattan apartments increased 6 percent to $1,028 compared to third-quarter 2005. Meanwhile, the average sale price fell 4 percent to $1.09 million compared to third-quarter 2005.
Co-op prices also slid 4 percent to $1 million compared to third-quarter 2005. “Smaller apartments fared best,” according to the report, as one-bedroom prices increased 6 percent and studio prices rose 2 percent compared to third-quarter 2005.
The average sale price of condos slid 6 percent in the third quarter to $1.2 million compared to third-quarter 2005 while the average price per square foot increased 2 percent and the average square footage per condo unit dropped 5 percent. The Brown Harris Stevens third-quarter report is based on 2,413 Manhattan apartment sales. Transaction data was supplied by ValuExchange, a proprietary database.
Other findings in the Brown Harris Stevens report:
— The average price for apartments in Brooklyn Heights and Park Slope rose by 10 percent to $672,170 over a year ago, while townhouses in these neighborhoods jumped 30 percent to $709 per square foot since the third quarter of 2005.
— Average prices for apartments on the East Side fared very well during 2005’s third quarter, led by a 20 percent increase in three-bedroom apartments, a 10 percent rise in one-bedrooms to $660,843, and positive gains in the two-bedroom and four-bedroom and larger categories.
— The West Side experienced a slight downturn during the third quarter of 2006 but was bolstered by a 2 percent increase in the average price per square foot for condos to $1,122 compared to a year ago.
— Downtown apartments experienced a 5 percent increase in the average price for one-bedroom apartments when compared to third-quarter 2005.
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