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NEW YORK CITY-Residential prices and sales both improved citywide during the third quarter, reversing a downward trend of several consecutive quarters, the Real Estate Board of New York reported Thursday. However, REBNY president Steven Spinola says in a release, “the trend needs to continue for at least two more quarters before we can say with confidence that a recovery is under way.”

REBNY’s report found that citywide sales volume increased 35% over the second quarter to 9,734 homes, including cooperatives, condominiums and one-to-three-family dwellings, suggested pent-up demand. Manhattan sales volume increased 59% to 2,840, while Brooklyn saw a 27% gain to 2,102.

Looking strictly at apartment sales, Prudential Douglas Elliman’s Q3 report for Manhattan found that sales of condos and co-ops were up 45.6% over Q2 to 2,230 units. In Brooklyn, Prudential Douglas Elliman reported earlier this month, sales rose 29.4% from Q2 to Q3, while in Queens the volume was up 31%.

However, the rise in volume did not always coincide with an increase in prices. While home prices citywide rose 4% during Q3 and Brooklyn’s prices increased by 6%, Manhattan’s declined for the second consecutive quarter, shedding 5% since Q2 to reach $1,233,000, according to REBNY.

Among the city’s other boroughs, average prices in the Bronx rose 3% to $367,000 compared to Q2, and Queens saw a 1% increase to $406,000. Staten Island home prices declined by 1% to $382,000, compared to last quarter

Year over year, the REBNY report found that the average Manhattan home sales price saw the steepest drop: 17% compared to Q3 2008. Brooklyn’s average home sales prices dipped 5%; those for Queens and Staten Island both declined 6%.

The reports corroborated observations made by Pamela Liebman, president and CEO of the Corcoran Group, and vice chairman Dolly Lenz of Prudential Douglas Elliman at a forum sponsored by The Real Deal Wednesday night. “We’re in a completely different place than we were last September or October,” Liebman said, noting that her agents are busy once again, although prices are lower.

Lenz opined Wednesday night that condo prices have hit bottom, while co-op prices have yet to do so. Her firm’s Manhattan sales report states, “This surge in the number of sales does not appear to indicate a housing market ‘bottom,’ but provides further evidence that the housing market has ‘turned the corner.’”

Providing still more evidence, Fitch Ratings said Thursday that it would revise its housing metrics upward for this year and 2010, “the first positive adjustments in housing metrics in approximately three and a half years,” managing director and lead US homebuilding analyst Bob Curran says in a release.

The ratings agency noted that single-family housing starts and new home sales have improved in recent months, as have new home inventories, home pricing and consumer and builder sentiment. However, Curran says, “During the first 12-15 months off the bottom, the housing recovery may appear jaw-toothed as substantial foreclosures now in the pipeline surface as distressed sales, while meaningful new foreclosures arise from Alt-A and option adjustable-rate mortgage resets.”

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