Real Estate Bubble

[lentinman]

NYC APARTMENTS STORY:

Just remember this moment. This is the first significant chink in the armor IMO.

Len

NEW YORK, Oct 4 (Reuters) - What goes up and up must eventually head back to earth -- at least in Manhattan, where the average price of an apartment fell to $1,149,813 in the third quarter -- down 12.7 percent from the second quarter, according to a quarterly real estate report released on Tuesday.

That was a break from the record prices set in the first two quarters of 2005, according to the Prudential Douglas Elliman Manhattan Market Overview report. The quarterly snapshot of Manhattan's real estate market was released following the end of the third quarter on Sept. 30, which was Friday.

For the Manhattan apartment market, the number of sales fell 8.4 percent during the third quarter to 1,997 units -- down from 2,181 in the second quarter -- and off nearly 18 percent from 2,429 in the year-ago third quarter.

Apartments also hung around the market longer -- lasting 133 days, up 30.4 percent from 102 days in the second quarter and up 23.7 percent from 107 days in 2004's third quarter.

Inventory climbed to 5,764 units in the third quarter -- up 16.1 percent from 4,965 in the second quarter and up 12.8 percent from 5,112 in the year-ago third quarter.

LUXURY APARTMENT MARKET SLOWS

The weakest sales were in the top of the Manhattan market, according to the Prudential Douglas Elliman report. The average sales price of a unit with four or more bedrooms declined about 36 percent in the third quarter to $6,823,346, down from $10,639,792 in the second quarter.

Miller said that top-end buyers -- unlike buyers of one-bedroom and studio apartments -- usually are not under the gun to find somewhere to live. Luxury buyers can rethink their decisions in the wake of the events that recently affected the U.S. economy, he explained.

The number of sales in the top 10 percent of the market fell in the third quarter to 200 units, down 8.3 percent from 218 in the second quarter, and down 14.5 percent from 234 in the year-ago quarter.