The region's weighted average cap rate on apartment properties reported closed or under contract is 4.6%, compared with a national average of 5.88%, according to RCA. The median cap rate for the region is 5.29%, compared to 6.23% nationally. The per-unit price for New York metro apartment building sales YTD averages $22,221, while nationally the average figure is $94,607.

Looking at the numbers on individual sales both regionally and locally suggests that growth is continuing, albeit modestly. In its monthly housing market report for December 2007, released earlier this month, Radar Logic Inc. found that the New York metro area's price per sf on residential space grew by 1.4% compared to a year earlier. That puts the region's price per-sf growth in fourth place behind Milwaukee at 4.9%, Washington, DC at 2.4% and Charlotte, NC at 2.1%. The New York metro area's average per-sf price of $286.26 is also the fourth highest in the nation, according to Radar Logic. However, unlike the prices in the three priciest metro areas—San Jose, San Francisco and Los Angeles—it went up rather than down compared to December 2006.

In Prudential Douglas Elliman's quarterly overview of Manhattan co-op and condominium sales, the median sales price of a Manhattan apartment for Q4 '07 was $850,000. That's up 6.4% compared to Q4 '06, but down 1.7% from Q3 '07, according to PDE's report, which is prepared by Miller Samuel, a division of Radar Logic. The average Q4 '07 sales price of $1,439,909 was up 17.6% year over year and 5.1% over the previous quarter. Accordingly, the average per-sf price $1,180 was up 18.2% over the Q3 '06 figure of $998 and 3.1% over the Q3 '07 figure of $1,144.

The fourth quarter saw the number of sales increase 3.2% to 2,518 units compared to Q4 '06. This increase was coupled with a decline in inventory: the number of available units was off 13.5% year over year and 1.4% from the previous quarter.

"Expectations of a market slowdown were not clearly evidenced by the empirical results of the quarter," according to the report. "The increase in the number of sales, rising prices, falling inventory, shorter days on market and a smaller listing discount showed marked improvement over the same period last year."

On the rental side, data from the Real Estate Group's March monthly Manhattan Rental Market Report indicates that rents for all one- and two-bedroom apartments decreased since February, while prices for studios increased slightly. Additionally, a year-over-year comparison of March '08 data to the same month in '07 found that doorman rents across all sizes and service levels are down by as much as 5.2% from this time last year while non-doorman rents are up marginally.

"Weakening one- and two-bedroom apartment prices and declining doorman rents indicate a growing demand for cheaper spaces with fewer frills," says Daniel Baum, COO of the Real Estate Group. "Manhattan's economic resilience notwithstanding, anticipated job cuts and the depressed dollar seem to have planted seeds of doubt in the minds of many New York consumers. This could be causing people to spend more frugally on everything from retail items to the very homes they live in."

Baum says that while Manhattan's renters are beginning to economize, "There's no question that just as many people want to live in Manhattan today as they did two years ago when the economy and real estate market were booming."

Instant Insights /

Residential: Residential Market Slows, But Keeps Growing

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