Manhattan residential market has 7th record-breaking quarter.

For the seventh quarter out of the last eight - and for the third quarter in a row average prices for Manhattan residential real estate hit record price levels in the first quarter of 1998, reports Halstead's New York, a quarterly statistical analysis of the Manhattan residential real estate market.

The all-Manhattan index of residential properties below 96th Street hit a record $148,630 per room in average sales price in March 1998, up $10,000 per room over the previous record of $138,040 per room set in November 1997. The Silk Stocking Index of super luxury property in Manhattan set a record in January 1998 of $298,726 per room in average sales price, though the average dropped back 3 percent or so by the end of the quarter.

Perhaps the most telling effect of the continued rapid price rises in Manhattan has been the percentage of deals that collapse between accepted offer and contract signing. Fully 20 to 30 percent of the accepted offers in Manhattan do not make it to signed contract. Moreover, the higher the price of the property, the greater the likelihood that the deal will fail.

"The market is pushing buyers to make decisions too fast and spend amounts that on quiet reflection they regret," said Clark Halstead, founder of The Halstead Property Company. 'When the market moves more slowly, buyers have time to line up their cash and financing and think through a purchase more carefully than when it's 'bid now or lose.' There are often several rounds of negotiations before a buy sticks in this kind of market. It's not that properties aren't selling, it's that the process is getting complicated."

Halstead noted that one of the benefits to buyers in this kind of market is that back-up offers on properties that already have accepted offers succeed surprisingly often.

'We're seeing back-up offers - even offers for less than the winning bid which collapsed - move in to capture a property regularly," said Halstead. "The key is that sellers, once burned, are vastly more interested in 'ability to close' than getting every last penny in a bid. Putting in a back-up offer with good financial documentation to prove qualifications is an excellent strategy in today's market."

Prices for all sizes of properties have increased by double digit percentages over the last year, Halstead's New York reports. Studios had the biggest gains, jumping more than 34 percent in the year. Small two-bedroom apartments increased in average sales price 30 percent, and townhouses jumped 17 percent.

Copies of Halstead's New York are available free of charge by writing The Halstead Property Company at 1065 Madison Avenue, New York, NY 10028 or calling [phone].