Home prices in Manhattan declined slightly in the second quarter of the year, but what's selling has changed significantly. More people are buying co-ops than condos, and smaller apartments now represent more than half of all sales.
Appraiser Jonathan Miller, with the firm Miller Samuel and who analyzes data from the major real estate companies for Prudential Douglas Elliman, said current trends favor first-time buyers interested in studios and one-bedrooms.
"Record low mortgage rates and rising rents are pushing consumers into the purchase market," Miller said.
Miller's figures show the middle of the market — two bedroom homes — are seeing less sales activity, while the luxury market continues to generate headlines and set records.
In the second quarter of 2012, the median Manhattan home price sank to $829,000 or 2.5 percent compared with the same period the previous year. The average sales price was $1,408,878, down 3.2 percent from 2011.
Condominium sales declined 11.8 percent, largely as a result of diminished supply.
Miller spoke of the "slow erosion of shadow inventory" as foreign buyers have snapped up many of the new condo developments that failed to sell immediately after the 2008 financial meltdown.
Co-op sales rose 10.9 percent, largely because of the high interest in starter apartments.