Manhattan 1Q apartment prices fall

Manhattan residential sales prices continued their fall in the most recent 12-month period, according to three market reports released Friday.

At the end of the first quarter, the median price stood at $782,071, down 9.9% from the same period a year ago, while average sales price was down 6.7% at $1.3 million, according to the report by Prudential Douglas Elliman and Miller Samuel Inc. The declines occurred in part because of a difficult comparison. The report noted that sales prices in the first quarter of 2010 had been artificially elevated by a surge in buying driven by the first-time homebuyer tax credit.

Additionally, the price decline was exaggerated by sales activity in the co-op and condo markets moving in opposite directions, said Jonathan Miller, chief executive of appraisal firm Miller Samuel.

The number of co-op apartments sold in the quarter rose 28.7% to 1,430 compared to a year ago, while the number of condos sold dropped 24.3% to 964, according to Prudential Douglas Elliman/Miller Samuel. The median co-op sales price dropped 6.2% to $642,500, while condo sales prices rose 8% to $1.15 million.

“There was a surge in co-op sales, but prices fell. Condo activity was the polar opposite—sales fell sharply but prices edged higher,” said Mr. Miller. “When you put them together, you got prices slipping because you have a lot more co-ops in the city.”

The drop in prices in the most recent quarter follows six consecutive quarters in which prices were heading upward, according to two separate reports by Brown Harris Stevens and Halstead Property.

Ms. Ramirez attributed the declines in her report to unusually high 2010 activity that was driven by pent-up demand. She remains optimistic about the year. “The first quarter was far more normal,” she said. “We are already seeing a wonderful build up to a great spring market.”

There is some disagreement on these trends, however. Reports out Friday from two other brokerages—The Corcoran Group and Streeteasy.com—concluded that average prices actually rose in the first quarter, by 2% and 3.5%, respectively, from the first quarter 2010.

As for the future, most firms see signs that the market is improving, with inventory still low and contract signings rising from the previous quarter ago. They also note first-quarter results are not reflective of current market conditions; contract signings are.

Active listing inventory reached its lowest level in the quarter since 2007, falling 5.3% to 7,605, according to Prudential Douglas Elliman and Miller Samuel. During the quarter, there were 2,309 listings that went into contract, up 10.1% from last quarter and down a mere 3.4% from the same time this year, according to Streeteasy.

“The market is generally stable, but clearly fragile,” said Mr. Miller, noting that there are major concerns over the fate of Fannie Mae and Freddie Mac, which purchase and guarantee mortgages. In fact, financing remains tight in the city. Both Corcoran and Halstead said many of their transactions during the quarter remained all-cash deals.