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Manhattan real estate stabilizes as prices come down

The number of Manhattan real estate sales was essentially flat in the first quarter, ending a monthslong decline brought on by a glut of available condos.

Some 2,892 sales were completed in the New York City borough during the first quarter, according to a report from the Douglas Elliman brokerage firm and the Miller Samuel appraisal company. That was barely changed from last year's total of 2,877.

Average sale prices, which can be skewed by a few high-end transactions, inched up 2.6 percent to $2.1 million. Median sale prices fell 3.3 percent to $1.1 million.

Many sellers are lowering their prices as they become more realistic about values, according to Jonathan Miller, president and CEO of Miller Samuel. Yet after two straight quarters of declining sales, a stabilization in volume could be a positive sign for the market.

"More sellers are coming to grips with market conditions," he said. "The seller is traveling farther to meet the buyer on price, not the other way around."

The big question for the Manhattan market is how it will absorb the tens of thousands of new units coming available over the next few months and years. Many of those units are aimed at high-end buyers. Already, the number of condos on the market jumped 7 percent in the quarter, reaching a six-month supply.

While the market was supported by strong sales of existing units in the quarter, new properties remained weak. Sales of new units fell 25 percent in the quarter while inventory rose 20 percent.

Miller said the outlook for the rest of the year is unclear, but said sales are unlikely to surge over 2016 — especially if interest rates continue to rise.

"It is unclear whether the jump in resales will have enough momentum to be sustained throughout 2017," he said. "We may end up seeing sales levels equal or slightly exceed 2016 levels even with a few rate increases."