RPT-Manhattan apartment prices zoom but more on market

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NEW YORK, July 2 (Reuters) - High-end condo sales drove the average price of a New York apartment more than 25 percent higher than a year earlier, two reports showed, but a rise in the number of homes on the market signaled that prices may weaken in the longer term.

In the second quarter, the average sales price for an apartment in Manhattan rose 25.2 percent to a near record price of $1,669,729, according to the Prudential Douglas Elliman Manhattan Second Quarter Market Overview. That was 3.1 percent shy of the record $1,722,991 set in the first quarter.

The average price per square foot was up 10.9 percent to $1,263.

The median sales price -- in which half the sales prices were higher and half were lower -- rose 14.5 percent to $1,025,000, according to Prudential.

Signs pointing to a softer market ahead include a 31.2 percent rise in the number of homes on the market to 6,869, a 15 percent longer sales period of 135 days, and a 21.8 percent fall in the number of homes sold in the quarter to 3,081, according to Prudential.

While most of the rest of the United States sees cratering home prices, Manhattan’s sky-high prices in the second quarter were attributed to the closing of sales of pricey new condominiums whose contracts were signed up to two years ago, when mortgages were easier to get than a parking spot.

Another report painted the same picture.

According to the Corcoran/PropertyShark report, the average price of an apartment in the second quarter rose 27 percent to $1,675,000 and the median rose 13 percent to $975,000.

“What’s been clear is that new development is playing a bigger role than ever,” said Pamela Liebman, CEO of the Corcoran Group.

New condominium sales accounted for more than a third of the sales and drove the market, with an average sale soaring 61 percent to $2.199 million and a median sales price zooming 48 percent to $1.371 million, according to the Corcoran/PropertyShark report.

That compared with a 10 percent rise in the average price for a pre-owned apartment to $1,431,000. The median was down 2 percent to $819,000.

The number of existing homes sold fell 46 percent compared with a 9 percent declined to 1,066, according to Corcoran/Property Shark.

“Clearly, it’s a bifurcated market,” said Matthew Haines, founder of real estate research firm

Dottie Herman, chief executive of Prudential Douglas Elliman, the fifth-largest U.S. real estate company, said the earlier year’s contracts will likely be reflected in housing results for the rest of the year.

Still, that may not be enough to offset a slowdown that the credit crunch is inflicting on New York. Mortgages are more expensive and the big loans needed for Manhattan apartments are difficult to get.

“People are going to have to put down double what they had to put down last year,” Herman said. “It’s not going to impact someone who’s going to pay $20 million for apartment. But it’s going to impact the guy who’s going to buy for $1.7 million and now can only get a mortgage for a million. It’s got to impact prices.”

Manhattan is still feeling the effects of the crisis in the financial sector, which has cost thousands of high-paying jobs, although the city’s unemployment rate is lower than the national average.

“We’re at a transition period,” said appraiser Jonathan Miller, author of the Prudential report, adding that with the number of homes on the market rising and the number of sales decreasing, prices might weaken. “The big indicators for me are the direction of inventory and sales activity versus this time a year ago.”

Herman said she expected prices to appreciate about 5 percent for the year, instead of the year-over-year 20 percent seen in the past couple of of years.

“I think New York City is fine,” she said. “It’s going to have some bruises, but it’s not going to have an amputation.” (Editing by Gary Hill)