Manhattan Real Estate Prices Drop

NEW YORK (TheStreet) -- The city's major brokerages reported prices in the fourth quarter of 2009 in the Manhattan real estate market decreased from a year ago while sales increased. I expect this trend to continue into early 2010.

Prudential Douglas Elliman and Miller Samuel reported that the median sales price of an apartment in the fourth quarter of 2009 was $810,000, down 10 percent compared to a year ago. There were 2,473 transactions, up 8.4 percent compared to last year, and 11 percent compared to last quarter. The activity is more than double the 1,195 transactions in the first quarter of 2009. Average price-per-square-foot was $1,176, flat compared to a year ago.

Brown Harris Stevens and Halstead, both owned by Terra Holdings, reported median price of $800,000, 9 percent lower than a year ago. There were 2,519 sales, 9 percent higher than a year ago.

All reports showed price decreases and lowering of asking prices, as the Manhattan property market is going through a correction. The average price per square foot is at $1,176, according to the Elliman / Miller Samuel report. Since these reports lag about three months, they basically show what buyers and sellers agreed upon last fall.

In real time, the asking price-per-square-foot is as low as $800 in the new development condo buildings. These prices reflect what the market is willing to pay and have resulted in a lot of transactions. However, these lowered prices, in line with market expectations, are only going to be reported in the first quarter of 2010. Expect prices to drop further when the first quarter report for 2010 comes out.