Manhattan Apartment Prices Hit Record Highs

The first quarter figures for the real estate market in Manhattan and old records broken again. While the numbers seem surprisingly positive, the overall picture is more complex.

Average house prices rose by around one third or 33.5% over last year's figures. All in all, the average price for an apartment in Manhattan has risen an astonishing 1.7 million U.S. dollars.

There are some signs for the New York apartment market, however. There is agrowing gap between Manhattan real estate prices and the rest of the city market. More importantly, while prices are still high, sales slowed markedly.

In addition, Manhattan is largely a record average of several new luxury condominium buildings, which went on the market last month. A total of 71 apartments were sold on the island for more than 10 million U.S. dollars in the first quarter - a figure that far exceeds the average rate ofManhattan.

But what most worried the numbers is the date of the whole. During the first quarter was a surprising success in terms of average selling prices could begin an inventory, well before the Bear Stearns episode, the increase probably put a significant chill on immediate demand for luxury apartments in New York City.

In fact, the presence of the recording can average in 1Q is causing some alarm when they are released, the 2Q numbers.

Ais significant problem in analyzing the potential impact on New York's housing market, the evaporation of Bear Stearns, is the difference in empirical data sets from large Manhattan real estate broker. According to Prudential Douglas Elliman, the number of sales dropped 34% in the first quarter. Two other real estate companies posted a decline of low single digit percentage points.

When the Prudential Douglas Elliman are numbercorrectly so that could mean problems for the market: a sharp decline in sales is then connected to a major disaster, such as the closure of one of the largest private employer in the city. Materialize in the case of less serious estimates, then it seems likely that the slowdown will not lead to a full scale retreat in prices.

In all, the 1Q numbers are more positive than many predicted. However, unmistakable signs of a slowing market can be found in all three major reports onpreviously published. Like the Manhattan apartment market reacts to Bear Stearns is the next important determinants of the near future of the market.