Manhattan Residential Market Gains Momentum in 1Q10

Dees Stribling, Contributing Editor

New York–The Manhattan residential market is starting to see more historically normal level of sales and inventory, according to the first quarter 2010 Prudential Douglas Elliman Manhattan Market Overview. The improvement during the quarter reflects a continuation of momentum, in terms of sales and prices that got under way in the fourth quarter of 2009.

Sales levels and a reduced inventory were at levels approximating the 10-year average for the entire market, and there was some improvement in the luxury segment of the market as well, according to the report. Overall, prices were lower in the first quarter of 2010 than they were in the first quarter of 2009, but price levels, “are now moving sideways,” Jonathan Miller, president and CEO of Miller Samuel, the firm that prepared the report, notes in a statement.

Miller chalked up the return to more normal levels of sales activity to low mortgage rates, improved consumer confidence spurred by gains in the stock market, and the federal home buyer tax credits. “There remains concern in 2010 over the potential for rising mortgage rates, expiration of tax credits and an economy that hasn’t established significant improvements in unemployment and mortgage financing terms,” he adds.

In terms of pricing, the report found that the average Manhattan residential sales prices during 1Q10–for condos and co-ops both–was about $1.427 million, down 21.8 percent from $1.826 million during the first quarter of 2009, but up 10.1 percent from 4Q09. Price per square foot was $1,038, down 17.6 percent from $1,259 per square foot during the same quarter last year, and down 1.2 percent from $1,051 per square foot during 4Q09.

The number of residential sales surged 99.5 percent year-over-year to 2,384 sales, compared with 1,195 sales in the first quarter of 2009, according to the report. That figure, as well as the even higher sales figure of 4Q09, helped whittle away at Manhattan’s residential inventory. The inventory stood at 10.1 months during the first quarter of 2010, which is consistent with the 10-year 9.9 month average and significantly improved over the 26.2-month inventory during 1Q09.

Manhattan’s luxury housing market, which includes both condos and co-ops as long as they are in the top 10 percent in terms of price, saw a median sales price of $4.582 million in 1Q10, down 30.5 percent from $6.595 million in the prior year quarter. Listing inventory fell 6.7 percent to 1,502 units from the same period in 2009.