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Manhattan Unit Prices Trending Down

The economic downturn appears to have finally made a dent in record-high prices for the Big Apple's for-sale units. However, the depth of the price cuts remains to be seen.

By Sule Aygoren Carranza | Updated on October 13, 2008

NEW YORK CITY–After several quarters of skyrocketing prices and considerable sales activity, prices of for-sale residential units in the Big Apple appear to be trending down, albeit slightly. The average price of a Manhattan for-sale residential unit has declined from $1.66 million at midyear, to $1.47 million in the third quarter. However, it remains 12% higher than September of last year. Meanwhile, the Q3 median sales price, $910,000 per unit, is also down from Q2′s $979,000 per unit, though the Q3 figure is still up 12% from the $815,000-per unit median sale price in the third quarter of 2007.

The quarterly declines should continue, but how steep the drop is remains to be seen, says Jim Gricar, executive vice president and managing director of Brown Harris Stevens here. “New York City has a very different kind of real estate market than the rest of the country,” he says. “Obviously things began to soften in 2006 through 2007 in other places, and it was the opposite here. We had steady increases until the second quarter of 2008. Now, if you look at the macro picture, the trend is looking like the market will be down, both in terms of volume and earnings over last year. This year will be down anywhere from 5% to 12% from 2007. And if you look back one more year, it’s considerably higher than 2006. So what you’re seeing right now is an adjustment back to very healthy real estate markets without quite so much as the froth on top.”

The woes on Wall Street and the greater financial markets are only beginning to hit the data on Manhattan’s residential market, which typically lags the greater market, says Gricar. For one, contracts are taking longer to sign, so closings reported in recent figures represent deals entered as far back as a year ago.

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