NEW YORK (TheStreet) -- Third-quarter Manhattan market reports recently released by the city's top brokerages showed a slowing rate of price decline while transaction volume increased. Manhattan has lagged the nation in real estate price declines.
The ongoing question is when Manhattan will hit bottom. Consensus seems to be that the rate of decline is slowing. But a recovery still isn't on the radar.
Manhattan Third-Quarter Market Reports
The reports showed that prices declined from a year earlier. The declines were less or flat from the previous quarter. This shows the rate of decline has slowed. Prudential Douglas Elliman, Corcoran Group, Brown Harris Stevens and Halstead report that average apartment prices declined between 10% to 16% from the same period last year.
Dottie Herman, CEO of Prudential Douglas Elliman, said that the worst is over for Manhattan. Prudential's market report showed that transaction volume, at 2,230 units, increased 46% from the prior quarter, signaling buyers are back in the market.
The median sales price of a Manhattan apartment is now $850,000, a 1.7% increase from last quarter, but still 8.4% lower than the same period last year. The average price per square foot is $996, a 16.5% decline from last year and 5.7% decline from the prior quarter, another example of a slowing rate of decline.Brokers attribute the increase in activity to declining prices, the stock market, improved consumer confidence and the first-time home-buyer credit. The increased activity also shows that the steep, post-Lehman Brothers drop in prices has ended.
Since then, my real-time observation is that prices have declined further, and by the time the fourth quarter report is published I won't be surprised if prices are 3% to 7% lower than the third quarter. But transaction volume has indeed been increasing.