Manhattan Real Estate Shows Gradual Signs of Recovery

The average price of a Manhattan apartment ticked up in the last quarter of last year, according to data from a major real estate brokerage, which means it looks housing is recovering -- slowly.

One of the key indicators real estate experts look to as a growth indicator is the median sales price. Last quarter it was $845,000 -- an increase of four percent from the previous year.

That suggests prices are rising, but appearances can be deceiving. What's happening, according to independent appraiser Jonathan Miller of the firm Miller Samuel, is that more larger -- and more expensive -- were apartments sold, while fewer studios and one bedrooms changed hands. 

"I think it was more of a skewed mix thing than it was prices really rising," Miller said.

Nevertheless, this points to a housing market that is stabilizing. Miller said in a recovery, smaller apartments tend to sell first. That's already happened. Then, bigger ones change hands. And that's what's happening now.

[we have to think of a new word for normal, cause I don't know what normal means. But what we're seeing is just general levels of pricing and activity that is consistent with what we would expect.]
For example, nearly 2,300 apartments sold in Manhattan in the fourth quarter, close to the 10-year average.  But that's far below the sales volume in the bubble years of 2006 and 2007.
Miller says the stabilization of Manhattan's real estate market has happened even with limited access to credit and high unemployment.
Back to normal? Miller rejected the word.
"We have to think of a new word for normal, 'cause I don't know what normal means. But what we're seeing is just general levels of pricing and activity that is consistent with what we would expect," he said.
For example, the number of apartments sold in Manhattan in the fourth quarter was close to the 10-year average but lower than the sales volume in the bubble years of 2006 and 2007.
Miller said limited access to credit and high unemployment are hindering a full recovery.