NYC a Bright Spot in Dismal U.S. Real Estate Market

The New York City housing market continues to perform well, in stark contrast to the ongoing real estate woes nationally.

The Manhattan residential real estate market saw falling inventories, rising prices and a record number of sales in the second quarter, according to reports from major brokerage firms.

The number of condo and co-op sales doubled from a year earlier to 3,939 units, while the number of units on the market dropped 32% to 5,237, according to the Prudential Douglas Elliman Manhattan market overview report released Tuesday. The median sales price rose 1.7% to a record $895,000.

"Manhattan is really a contrarian market," says Jonathan Miller, president of appraisal firm Miller Samuel, which helps prepare the report. "The key ingredients of pricing, inventory and level of sales are moving in an opposite direction as the national market."

In contrast, the national market is facing a big supply of homes on the market and falling prices.

There are many reasons for the New York City strength. For one, the local economy remains strong, as measured by low unemployment, a city surplus and record bonuses on Wall Street.

In addition, mortgage rates have remained relatively low, and the weak dollar is attracting foreign buyers to the city, Miller says.

One of the biggest surprises is the shop drop in inventories. Condo inventory is now down 22% since peaking in the second quarter of last year. Co-op inventory has fallen 40% since then.

A report from rival brokerage firm the Corcoran Group said median Manhattan condo and co-op prices in the second quarter rose 23% from a year earlier, while median prices for condos and co-ops in Brooklyn fell 1%.

Want more? Check out TheStreet.com TV video. Join Nick as he takes a closer look at this issue.

>To order reprints of this article, click here: Reprints