RISMEDIA, January 4, 2007-(MCT)-Despite a downturn in the housing market nationwide, Manhattan apartment prices rose 6% in 2006-to a record average of $1.295 million, a new study found.
The boom that began the decade with 20% annual sales price hikes has definitely ended. But locally, a bust hasn't followed.
"We completed the transition from double-digit growth rates to single-digit growth," said Jonathan Miller, CEO of appraisal firm Miller Samuel, which analyzed sales for real estate brokerage Prudential Douglas Elliman.
During the final three months of the year, the Manhattan market softened-as it normally does during the holidays. Fourth-quarter sales prices fell 5%, to an average of $1.22 million, from the third-quarter average.
But the number of deals closed-which also usually slides in the fourth quarter-surged by 15.5% from the third quarter, partly because falling mortgage rates encouraged potential buyers to get off the sidelines.
Other data showed the number of Manhattan apartments available for sale in the fourth quarter fell 22.2% from the third quarter. That's because sellers who tested the market with unrealistically high asking prices couldn't find buyers, and took their apartments off the market.
People who did complete deals during the fourth quarter initially overpriced their apartments by 5.5% on average, Miller said — an improvement over third-quarter sellers, who began with asking prices that were an average of 9.3% higher than their transaction prices.
"Sellers are getting more in sync with the actual market," Miller explained. "There was less friction in the buyer-seller relationship."
With record Wall Street bonuses set to stoke sales this year and no negative surprises expected with mortgage rates, the Manhattan market should stay healthy in 2007, Elliman CEO Dottie Herman said.
"You will see a repeat of 2006," she predicted.
The New Year's outlook also is favorable for sales in downtown Brooklyn's brownstone neighborhoods, and in Williamsburg.
"I am as positive for 2007 as I was for 2006," said Frank Percesepe, who heads Brooklyn operations for real estate brokerage Corcoran.
Apartment prices in these nabes-which include Brooklyn Heights and Park Slope-rose 10% last year, to an average of $613,000, Corcoran said yesterday.
Copyright © 2007, Daily News, New York.
Distributed by McClatchy-Tribune Information Services.