Manhattan Reports “Modest” Q3 Price Gains

The Manhattan residential market saw a recent decline in the surge of new development closings, according to data released by Prudential Douglas Elliman Real Estate. The New York-based residential broker released its Q3 2008 Manhattan residential market report Friday, which also showed price gains as “more modest and less subject to skew this quarter.” Prudential’s data showed new development slipped to 30.1 percent from 32.5 percent of all sales last year. Price per square foot of new development was also down – 1.5 percent from last year – to $1,320 in the 2008 third quarter. A new feature of the report analyzes resale price per square foot, which was up 4.3 percent from last year to $1,142 per square foot. Much of the financial crisis that emerged in September – including the government takeover of both Fannie Mae (FNM) and Freddie Mac (FRE) – have yet to appear in the market data, said the president and CEO of Miller Samuel Inc., the appraisal firm that prepared the report for Prudential. “The market is currently experiencing a ‘pause’ after the bailout of Fannie Mae and Freddie Mac near the end of the quarter,” said Johnathan Miller in the press release. “The reduction in affordable mortgage products continues to hamper buyers, not only in New York, but in most housing markets across the country.” Prudential’s data reported a median sales price increase of 7.4 percent to $928,263 over last year’s $864,397, and an average sales price increase of 8.1 percent to $1,480,363 over last year’s $1,369,486. The report also shows the number of sales falling 24.1 percent to 2,654 units in the 2008 third quarter over last year’s 3,499 units. Prudential showed Manhattan’s listing inventory as having increased 34.6 percent to 7,003 units over the 2007 third quarter, while days on market was 134, 11 days longer than last year’s 123. “We have faith in New York City real estate and believe that the bail-out plan will help all over, since it allows the bank to free up credit for consumers,” said Prudential CEO Dottie Herman in Friday’s press release. “Prices in Manhattan remain stable, inventories are at normal levels and people still want to live, buy and raise their families here.” Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade. Editor’s note: To contact the reporter on this story, email diana.golobay@housingwire.com.