Manhattan real estate bucks U.S. downturn

Real estate prices may be going into freefall in some areas of the United States, but so far Manhattan has managed to buck the national trend, with year-on-year price growth close to double digits, according to new market reports.

In its Third Quarter 2007 Manhattan Market Overview, realtor Prudential Douglas Elliman says that downtown New York’s residential real estate market continues to be characterized by declining inventory and rising prices in contrast to the national housing market.

“With the average sales price of a Manhattan condo reaching new heights, we can attest that there’s only one Big Apple, and that’s New York City,” says Dottie Herman, the real estate group’s president and CEO. “Real estate in Manhattan continues to be a strong investment for national and international buyers.”

The number of sales increased 65.6 percent in the second quarter to 3,499 units, compared to 2,113 units sold in the same period a year earlier, while the average price per square foot increased 9 percent to a record $1,144.

Wall Street bonuses and a weaker dollar

“Price levels across the board were generally up this quarter with the greatest price gains seen in larger apartments, namely three-bedroom and four-bedroom units with a 17.9 percent and 16.4 percent gain over the same period last year,” says Jonathan Miller, the director of research at Radar Logic, a real estate analysis firm. “The events of the credit crunch that began in mid-July have not yet seen any appreciable effect on market conditions in the third quarter. The credit crunch impact, if any, would more likely be seen in the coming two quarters.”

Record Wall Street bonuses and an influx of buyers from abroad have helped keep the Manhattan housing market afloat, Miller argued, adding that “the falling dollar has brought a lot of foreign buyers to new developments.”

At the luxury end of the market, Prudential Douglas Elliman said the median sales price of a luxury apartment in the third quarter was $5,085,883, up 12.8 percent from last year earlier, and up 10.3 percent from the second quarter.  The average price per square foot and median sales price showed 16.7 percent and 16.3 percent gains respectively.

October 2007 - Americas -