Apartment market flourishes, despite stock market woes.

The New York City apartment market in the second-quarter of the year continued to flourish, unaffected by the seesawing stock market and other indicators of a less than robust economy, according to the latest market analysis by Insignia Douglas Elliman, New York's leading residential real estate firm and a division of Insignia Financial Group, Inc.

Unit sales of condos and coops in the city hit a historic high, and both the average and median sales prices of apartments were up from the first quarter, according to the Insignia Douglas Elliman Manhattan Market Overview.

The number of apartment sales climbed 29.9% to 2,726 units over the prior quarter, and was up 49% over unit sales in the second quarter of 2001. The only drawback is sales outpacing a continued low inventory of space.

"The rapid rebound of the real estate market after Sept. 11 has astonished the real estate industry," commented Paul Purcell, president of Insignia Douglas Elliman. "My company, for example, had its biggest month ever in May. Apartment sales by Insignia Douglas Elliman have exceeded our projections every month this year through June."

For the second quarter, the average sales price was $828.936, a 5.2% increase over the first quarter average of $788,256, and the median sales price hit $510,000, a 2% gain over the previous quarter's $500,000, the Insignia Douglas Elliman Manhattan Market Overview disclosed. However, these prices are down 7.3% and 5.6%, respectively, compared to second quarter of 2001, a period that set price records across the board.

At $626, the average price per square foot of all coops and condos sold during the second quarter of 2002 was 5.7% higher than the previous quarter.

The Insignia Douglas Elliman Manhattan Market Overview, prepared quarterly for Insignia Douglas Elliman by the independent appraisal firm of Miller Samuel Inc., is considered the most comprehensive ongoing analysis of the residential real estate market. It tracks sales of coops and condos priced at $75,000 and up in apartment buildings between Battery Park City and West l6th Street or East 96th Street, based on data from management agents for coops and public record for condos.

Because demand outpaces the inventory of apartments, the absorption rate - the number of months it would take to sell all available listings - has plummeted sharply from 6.3 months for the second quarter of 2001 to 4.8 months this quarter, the Manhattan Market Overview disclosed. Similarly, average days on market is now 117 days, more than two weeks shorter than the same period a year ago, and the average discount from list price is now 3.1%, the lowest level since the fourth quarter of 2000, and showing "reduced negotiability" by buyers trying to get a break on prices.

The Manhattan Market Overview attributed the interest rate cuts by the Federal Reserve for spurring a robust housing market nationwide by lowering mortgage rates. "Lower mortgage rates have stimulated sales activity, especially in the entry-level and mid-level markets, which are more interest rate sensitive," the Manhattan Market Overview states.

"Since 78% of all sales activity this quarter is below $1 million, lower mortgage rates have played a major role in the housing market recovery."

Overall average sales price for a coop in the second quarter of 2002 is $686,156, up 2.8% from the first quarter's average of $667,764, the Manhattan Market Overview reported. The median sales price is $419,000, 4.2% more than the first quarter's $402,000, the highest since the 3rd quarter of last year when it hit a record $420,000.

Average days on market for coops contracted by four days to 121 days from the previous quarter, and the average discount from list price dropped to its lowest level in six quarters, to 2.9%, compared to 5.4% in the first quarter of this year.

Of particular note in the coop marketplace is the heavy volume of sales of studio and one-bedroom coops, considered entry-level apartments, which surged in sales' by 30.6% from the first quarter this year. Studio and one-bedroom coops now make up 51% of the overall coop market.

Compared to the first quarter of this year, the median sales price was up 6.4% to a record $750,000, and the average sales price climbed 8.3% to $1,054,385, the Manhattan Market Overview stated.

Average days on market for condos were down just two days to 111 days for the quarter, and the average discount from list price dropped to 3.3% from the first quarter's 4.4%.

With condos now averaging 1,506 SF, the third consecutive quarterly increase, the overall condo market increasingly is targeted to upper-end buyers, reflecting a trend in the last several years for developers to build larger apartments. Entry-level sales of studio and one-bedroom condos have stabilized at a 42% market share.

The Insignia Douglas Elliman Manhattan Market Overview also noted:

* Average price per SF of luxury apartments, defined as the top 10% of all coop and condo sales, increased 5.8% to S 1,092 per SF, and average sales price was up 9.3% to $3,001,517, commensurate with an increase in size to average of 2,749 SF in the second quarter.

* Average price per SF of downtown lofts (mostly condos) was up 4% to $656, and the average square footage climbed by 3.1% from the previous quarter to 2,204 SF.