Manhattan apartment prices fell sharply during the second quarter of 2009, as the limited number of deals struck during the darkest months of the economic downturn began to close, according to a series of market reports released Wednesday.
The number of closings fell more than 50 percent, and prices in some categories were reported down as much as 25 percent, compared with the same quarter in 2008. Sale prices were also down from those reported in the first quarter of 2009.
One report, by Brown Harris Stevens and Halstead Property, put the average price of a Manhattan apartment in the second quarter at $1.26 million, a decline of 24 percent from the same period in 2008, and 16 percent below the previous quarter. It put the median sale price at $795,000, 19 percent below the figure in the first quarter of 2008.
Another report, by Prudential Douglas Elliman, found that the median sale price on the resale of existing apartments was down by 25.6 percent from a year earlier. The report, prepared by Jonathan J. Miller, president of Miller Samuel Inc., an appraisal firm, said that the number of sales was down 50.3 percent compared with the same period in 2008.
The new figures on closed sales confirm the downward trajectory in the Manhattan market that brokers have been reporting for many months. But the report was issued at a time when brokers had begun to say that sales activity rebounded sharply in the last six weeks, though at prices well below the peak last year.
“The market took a nose dive and business virtually stopped in September,” said Dorothy Herman, the president of Prudential Douglas Elliman. “Now you are seeing people at least spending money again. I am not saying it is a different world; buyers are still looking for value.”
The reports issued by the major brokerage firms show that the steepest declines in sales and prices occurred in the largest and most expensive apartments, where banks are requiring large down payments from buyers seeking mortgages. Sales were also off sharply in new condominium developments, which have been hit hard in the economic downturn. Mr. Miller put the decline in sales of new condos at 61.7 percent.
The strongest activity was reported in smaller, less expensive apartments, often bought by renters buying their first homes. They benefited by low mortgage rates available for loans that conform to federal guidelines, and a federal tax credit available to many first-time home buyers.
The lag in time between the time a contract is signed and the time a deal closes is unusually long in Manhattan because many sales cannot close until a buyer is approved by a co-op board, or a sale is reviewed by a condominium board. Many of the sales reported in contract in the last few weeks will not close until later in the summer or the fall.
The Brown Harris Stevens report found that sales of trophy apartments had shriveled during the downturn, with sales of co-ops costing more than $10 million off by 82 percent from the same period a year ago. This contributed to a sharp weakening in average prices of all co-ops, off 29 percent to $918,795, the report found.
But sales of these larger co-ops have picked up along with the rest of the market. “As 2009 has progressed we have continued to see a significant increase in activity and sales each month,” said Hall F. Willkie, president of Brown Harris Stevens.
A number of statistics supported this view. The inventory of apartments on the market, and the number of days an apartment lingered on the market before it sold, were up sharply from a year ago, but down a bit from the first quarter as the market strengthened. Streeteasy.com, a real estate Web site, said that 2,477 apartments went into contract during the second quarter, an 82 percent increase from activity in the first quarter.
Still, there was very little optimism that sale prices would strengthen significantly from their current level. Pamela Liebman, the chief executive at the Corcoran Group, said she expected prices to stabilize and then perhaps rise “a couple of points” a year. Sellers are better off selling now than waiting, she said.
“If I were a seller, I would take the risk out of the calculation,” she said. “Time does not necessarily equate to money here for the seller.”
Mr. Miller said that at best, the market would move sideways. “We will probably get a little worse before it is going to get better,” he said, “because unemployment is likely to continue to rise after the recession ends this year.”
But Gregory J. Heym, the chief economist for Halstead and Brown Harris Stevens, said the economic outlook in New York had improved, with unemployment, so far, remaining below the national rate. “A lot of things are bottoming out,” he said.