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Inventories Rise, Prices Rebound as Buyers Take Control

NEW YORK, NY January 9th, 2005 Mitchell, Maxwell & Jackson Inc., (MMJ) reported in its year end 2005 Market Measure Report that the average apartment sale price reversed direction and posted a 3.6% quarterly increase. Buyers paid an average of $1,128,500 compared to $1,090,000 the preceding quarter, while buyer activity remained in-line with 3rd quarter 2005 levels. The rise in average sale price represented a 22% increase over the 4th quarter of 2004.

"The year clearly finished on solid footing. Contract signings, the best indicator of current market demand, went virtually unchanged (2,033 to 2,030) from the third to fourth quarter as buyers did not yield to bubble concerns.? said Jeffrey Jackson, Co-Founder & Chief Economist of MMJ, "The shift to a buyers market that began in the 3rd quarter continued into the 4th quarter as available inventory grew 26% from 6,867 to 8,675 listings representing about a six-month supply. Buyers are now taking more time to make value-conscious decisions leading to quality buying. To borrow an old NY ad expression, it's 'The Syms' effect, educated buyers are now the best customers. They are looking for value--both quality and price must be right." Jackson said.

Current economic conditions appear positive. Wall Street bonuses were at record $21.5 billion; unemployment is at a 5 year low; Manhattan posted the 6th largest wage increase in the nation and the Fed is expected to begin winding down their 18 month rate hike campaign. These factors should support the residential market through at least the first quarter of the year.

"The big question going into 2006 is whether new development (an estimated 10,000+ units) coming on the market will exceed demand" added Jackson.

Fourth-Quarter Report Highlights:

Million Dollar Sales Driving Market
Sales of million dollar plus homes spiked in the 4th quarter to represent a record 34% of all transactions, compared to 29% the previous quarter and 26% one year ago.

Downtown Market Highest for the First Time
On the strength of record high loft sales, the average sale price south of 23rd street was the highest in Manhattan for the first time, beating out the upper West Side at $1,428,000 compared to $1,389,000. The East Side finished 3rd at $1,287,000 and Midtown came in 4th at $947,000.

Condominium Sales Increase
The market share of condominiums grew to finish the 4th quarter at 40% of all sales, up from 30% the previous year.
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