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Manhattan Real Estate: Is There A Summertime "Sweat" Coming?

New York City
New York City

It's my favorite day of every quarter. Whether Central Park is turning amber or tulips are rising in the islands of Park Avenue, the quarterly Manhattan Residential Market Report is always the tastiest morsel of the season (who loves her job more than me??).

No matter the ills of housing in Illinois, the catastrophic condo market of Miami or the foreclosure capital that is California, Manhattan always delivers those big ticket numbers that make Donald Trump wannabees giggle.

The second quarter of 2008 is no different. The average price of a Manhattan home is up 36 percent from a year ago to a near record 1.66 mil. What's that you say? A NEAR record. Yes folks, it's down two percent from the previous quarter. Oh, and that's the average price, not the median price, which every other bean counter on the planet employs.

Manhattan realtors like to use the average price to headline their reports because the large number of ultra high end properties skew the number ever higher. The median price of a Manhattan home, where half the sales are above and half below, is a mere $979,000. You have to read a little further down to find that. Yes, it's still up 22 percent from a year ago.

This particular report always highlights prices. Only at the very end does it note that sales are down 18 percent year over year.

Did you read that right? Yes. And remember what we always say: prices lag behind sales. The second quarter figures also represent closings which in Manhattan can be deals signed 6 to 9 months ago, thanks to those ever uncooperative cooperative boards. The president of Broiwn Harris Stevens tells me signed contracts are already off 16 percent this year, and according to his report, "While we know Wall Street layoffs are coming, many laid off workers have yet to disappear from payrolls."

Now don't you all go fretting about our Big Apple. Trust me, its folk are still greedy to the core, and foreign folk are pouring money into multi-million-dollar condos like Belvedere into Baccarat. Or should I say Stoli, since the bulk of the buyers are Russian.

I still have to believe that sheer supply and demand will continue to buoy this island's sky-high prices. But Manhattan may be slipping ever so slightly, and without Wall Street's overpadded pockets, I wonder if the market for the under five mill crowd will hold its own. Realtors are clearly beginning to sweat at the start of this summer.

Questions? Comments? RealtyCheck@cnbc.com