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Residential sales took a dip in fourth quarter.

The Manhattan residential real estate market closed 1998 with a dip in both the broad Manhattan Index and the Silk Stocking Index of average sale prices of residential properties below 96th Street.

After four quarters of steady percentage increases, the last quarter of 1998 showed a decline of 2 percent from the third quarter for the All Manhattan Index. This was the first decline in prices since the third quarter of 1997, reports the year-end edition of Halstead's New York, a quarterly statistical analysis of the Manhattan residential real estate market.

"The stock market volatility at the end of the third quarter had buyers thinking the great bull market in property values was coming to an end," said Clark Halstead, managing partner of The Halstead Property Company. "Because real estate closings typically lag behind deals by 30 to 90 days, buyers' reaction to the third quarter stock market blip showed up in the fourth quarter numbers."

But as the stock market regained its footing, the real estate market picked up its pace, illustrating once again the close correlation between the capital markets and residential real estate prices. By the end of the year, all indications were that prices would not continue to fall.

"With economic indicators actually stronger than they've been in a year or so, we're likely to have a fairly robust market through this winter," predicted Halstead, "unforeseen economic downturns notwithstanding."

By any measure, 1998 was a good year. At year-end, the average price for all Manhattan residential properties below 96th Street was $159,000, 16 percent higher than year-end 1997. In the Silk Stocking districts, the year-end average price of super luxury properties was $323,000, up 13.5 percent from year-end 1997.

One statistical standout was the dramatic increase in the average sales price of studio apartments. While prices for all properties increased from the end of 1997 to the end of 1998, studios turned in an astonishing 21 percent increase in average sale price. This year also saw a dramatic jump in the average price difference between studio condos and co-ops. According to the Halstead report, this year condominium studios sold on average 148 percent more than did co-op studios.

"What this indicates is that condo studios are once again favored as an investment vehicle," said Halstead. "With capital fleeing from markets overseas; retreating from the rocky performance of the stock market; and diversifying out of fully appreciated equities, condo studios have become a very popular alternative investment. Co-op studios, on the other hand, continue to be the domain for the owner who intends to occupy."

Copies of Halstead's New York Report are available free of charge by writing The Halstead Property Company at 1065 Madison Avenue, New York, NY 10028 or calling (212) 734-0010.
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Title Annotation:1998; Manhattan, New York, New York
Publication:Real Estate Weekly
Article Type:Industry Overview
Date:Feb 24, 1999
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