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Property Slips in Manhattan

Despite chirpy predictions by brokers about a strengthening Manhattan real-estate market in 2012, a slowdown in co-op and condo sales has deepened so far this year.

Sales were off 6.4% so far during the first quarter, compared with the year-earlier period, which was the worst quarter for sales since the Manhattan market hit bottom in 2009.

The decline occurred despite a pickup in sale of apartments selling for $4 million or more, including the most expensive apartment sale ever in Manhattan—an $88 million penthouse at 15 Central Park West.

Greg Heym, an economist at Brown Harris Stevens and Halstead, said the slowdown likely reflected weakness in the local job market, including last year’s loss of 4,300 jobs in the securities industry between April and December.

“For the first time since the recovery, the U.S. is growing at a quicker pace than New York City,” he said. “It had been the U.S. holding us back. That is no longer the case.”

The quarterly sales figures are based on a preliminary analysis of data from the city Department of Finance, and include closings filed as of the end of the second month of each quarter.

When sales dropped in fourth-quarter reports, the plunge was viewed by industry figures as an aberration—the result of a temporary economic shock from a gyrating stock market and uncertainty over the European debt situation.

But the new figures indicate that the weakness in sales persisted into the new year, and is likely to produce lower final numbers for the full first quarter.

Brokers said that new deal signings have been rising lately, especially in the last two weeks of an unusually warm February. Residential sales often rise sharply during the spring, usually the peak selling season in New York.

The analysis for the year so far showed that sales of apartments selling for less than $1 million, the largest segment of the market, fell by the most, 7.9% overall, including a steep 14.9% decline in sales of co-ops at that price point.

At the same time, sales at the top end of the market, for apartments selling for $4 million or more, rose by 15.6%, as brokers reported a continuing influx of foreign buyers and strong sales in new condominiums.

At the Laurel, a 31-story new condo on First Avenue and 67th Street, brokers at Corcoran Sunshine Marketing Group said they posted $23 million in sales in February, helping to sell out 80% of the building.

Median prices in Manhattan rose, in part because of a drop in the number of less pricey sales. The median price of a Manhattan apartment rose by 5.7%, while the average sale price, boosted by the record $88 million sale, rose by 21.2%.

Still, several brokerage firms said their new contract activity was running ahead of the same period last year.

Pamela Liebman, president of Corcoran Group, said that sales may have been depressed lately because of falling inventory, especially of well-priced apartments. Typically there is a surge of new listings in the spring.

“Anything that comes on in a good building at the right price is selling extremely fast,” she said. “Open house traffic is up, the number of buyers is up. There is a severe shortage of new development product.”

Hall Willkie, the president of Brown Harris Stevens, said that his new contract figures show that the number of deals with signed contracts rose in January and February compared with the same period a year earlier.

Another brokerage executive, Diane Ramirez, the president of Halstead Property, said: “It is a good, lively, active market across the board.”

Jonathan Miller, an appraiser and president of Miller Samuel Inc., who prepared market reports for Prudential Douglas Elliman, said the sluggish figures reflect the fact that “people just held back” toward the end of last year because of economic uncertainty.

He said Wall Street bonuses, though down, were higher than expected, and unlikely to further damp the market.

Even so, he said he didn’t expect a dramatic change in the market during the months ahead.

“The real outlook is more of the same,” he said, “with significant activity at the upper echelon of the market and more mundane level and pricing at the lower end.”

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