Prudential Douglas Elliman Q4 2007 Manhattan Market Overview

Straight from my Inbox are the highlights and key takeaways from the 4th Quarter report courtesy of Prudential Douglas Elliman via Jonathan Miller of RadarLogic and Miller Samuel Appraisers:

Overall Manhattan Market [includes entire island]

In the final quarter of 2007, the Manhattan real estate market continued to see gains in most market indicators, consistent with the prior three quarters including increased price levels, increased number of sales and a decline in inventory as compared to the same period in 2006.

Price levels were generally up this quarter, with the greatest price gains seen in larger apartments, specifically 2-bedroom and 3-bedroom units with 22.1% and 39.8% gains respectively over the same period last year, with a portion of the increase in price attributable to an increase in the size of the units actually sold.

-The median sales price increased 6.4% to $850,000 over the prior year quarter result of $799,000 (1.7% below prior quarter result of $864,397).
-The average price per square foot increased 18.2% to a record $1,180 over the prior year quarter result of $998 (3.1% above the prior quarter result of $1,144).
-The average sales price increased 17.6% to a record $1,439,909 over the prior year quarter result of $1,224,840 (5.1% above the prior quarter result of $1,369,486).

– The number of sales increased 3.2% this quarter to 2,518 units as compared to the 2,441 units sold in the prior year quarter.
– Listing inventory fell 13.5% to 5,133 units from the prior year quarter total of 5,934 units.
– Days on market was 131 days this quarter, faster than the 149 days seen in the same period last year but 8 days slower than the 123 days last quarter.
– Listing discount was 2.7%, essentially unchanged from 2.8% in the same period last year, but higher than the 2% last quarter.

Co-op Market

-The median sales price of a co-op this quarter was $675,000, up 3.8% from last year at this time. Average price per square foot increased 21% and average sales price increased 9.1% from the same period last year reflecting higher price gains at the upper end of the market.

-Inventory levels for co-ops fell 26.2% to 2,254 units as compared to the prior year quarter total of 3,054 units. Co-op listings are comprised of nearly all re-sales.

Condo Market

-The median sales price of a condo this quarter was $1,100,000 this quarter, up 6.8% from last year at this time. Average price per square foot and median sales price showed 10.6% and 17.8% gains respectively from the prior year quarter reflecting higher price gains at the upper end of the market.

-Inventory levels for condos totaled 2,879 units, unchanged from the prior year quarter total of 2,880 units. New development added to the market offset the decline in re-sale listings.

Luxury Market (upper 10% of all co-op and condo sales)

-The median sales price of a luxury apartment this quarter was a record at $4,300,000 this quarter, up 28.4% from last year at this time and up 8.9% from the prior quarter. Average price per square foot and average sales price showed similar 29.8% and 32.8% gains respectively from the prior year quarter.

Loft Market (co-op and condo sales)

-The median sales price of a loft apartment this quarter was $1,445,000 this quarter, up 3.6% from last year at this time. Average price per square foot and average sales price showed 18.3% and 11.3% gains respectively from the prior year quarter reflecting higher price gains at the upper end of the market.

I choose to ignore "averages" as they can be greatly skewed by increased activity in the luxury market.  But there are some interesting things to note from this report.

MY Key Takeaways that can’t be ignored (IMHO):

• Median sales price up 6.4% from same quarter last year but down 1.7% from 3rd quarter of this year.  It remains to be seen as to whether or not we will see a trend in decreasing median prices.
• Listing inventory decreased 13.5% from same period last year (no wonder prices remain strong)
• Days on market increased from 123 to 131 days from 3rd Quarter.
• The listing discount increased to 2.7% from 2% in the 3rd Quarter.
• Median co-op prices increased a modest 3.8% from same period last year.
• Median condo prices increased 6.4% from same period last year.
• Luxury demand continues to be off the charts with median prices increasing a whopping 28.4% from the same period last year.  Credit crunch obviously isn’t affecting the wealthy…yet.
• Median loft prices increased a modest 3.6% from the same period last year.

Delving further into the report and comparing 3rd and 4th Quarter numbers we see the following:

• Overall median sales prices dropped 1.7%
• Overall number of sales dropped 28% from 3rd to 4th Quarter
• Inventory dropped 1.4%

These are the facts.  Spin them anyway you like but my sneaking suspicion is that the first 6-8 months of 2007 were where most of the big gains were seen.  And again, averages schmaverages!  They mean absolutely nothing to me when discussing such a unique real estate market made up of so many micro markets.