A fall of more than 10 percent in the average apartment price in Manhattan in the third quarter from a year earlier attracted buyers who pushed up the number of sales by over 45 percent in just one quarter, industry reports showed Friday.
Still, experts said it was too early to say the market had bottomed out.
Since peaking in the first half of 2008, Manhattan apartment prices have fallen an average of 25 percent to 30 percent.
The Manhattan residential real estate market had been largely unscathed during 2008 as other U.S. housing markets were floundering, but it hit a wall in September 2008 when Lehman Brothers collapsed and the financial sector fell to its knees.
About 20 percentage points of the 25-to-30 percent drop can be sourced to the months after September, said Jonathan Miller, president and chief executive of Miller Samuel appraisers and the author of the Prudential Douglas Elliman Manhattan Market Overview quarterly report.
Other once-hot U.S. housing markets have seen prices fall by more than 50 percent.
We're not done yet, Miller said.
New York City is still wrestling with a Wall Street that is trying to reinvent itself, a disproportionate number of layoffs of high-wage earners and new condominium construction.
There's a lot of unwinding to go, Miller said. We're moving toward stabilization but we have a ways to go.
The average sales price of a Manhattan apartment fell 10.6 percent to $1,323,462 in the third quarter from a year earlier, the Prudential Douglas Elliman Manhattan Market Overview showed. But it rose 0.8 percent from the prior quarter's $1,312,920.
Prices per square foot fell 16.5 percent to $996 year over a year earlier and were off 5.7 percent from the second quarter, the report said.
The third-quarter median sales price -- in which half the prices were higher and half were lower - dropped 8.4 percent to $850,000, but rose 1.7 percent from $835,700 in the second quarter, the Prudential report said.
While the number of sales fell 16 percent from a year earlier to 2,230 sales, it soared 45.6 percent from the second quarter. Brokers attributed the rise to unleashed pent-up demand from the prior two quarters.
Inventory slipped 4.6 percent to 8,389 units from a year earlier and fell 10.5 percent from the prior quarter.
Still, deals are taking longer to complete. Buyers are cautious and mortgage lending is tighter than some brokers and experts have seen during their careers.
A for-sale apartment spent 167 days on the market, up from 134 days a year earlier.
An $8,000 federal tax credit for first-time home buyers helped fuel sales of studio and one-bedroom apartments, where prices fell 30 percent and 24 percent respectively from a year earlier, Corcoran Group's quarterly report said. The credit is scheduled to expire at the end of November.
The credit is still too tight. We need more jumbo financing for New York City, Pamela Liebman, Corcoran chief executive said, referring to mortgages over $417,000.
But there were signs that the wealthier were getting their groove back. Sales of three-or-more-bedroom apartments jumped 55 percent over the second-quarter, even as they were off 19 percent from the year-earlier quarter, Corcoran said.
It's still not where it was, Liebman said.
Brokerage Brown Harris Stevens said there were four sales of co-operative apartments of more than $30 million in the year-earlier quarter but none this year.
In a co-operative, or co-op the resident technically does not own the apartment but instead owns shares of the apartment building.
(Reporting by Ilaina Jonas; Editing by Neil Fullick)