NEW YORK, April 1 (Reuters) - The average sale price for a Manhattan apartment topped $1.2 million in the first quarter, a new record, as the supply of properties for sale shrunk, according to the Prudential Douglas Elliman Manhattan Market Overview.

The average sale price rose to $1.21 million -- up 23 percent from the final quarter of 2004 and up 26 percent from a year ago.

In the condominium sector, the average sale price jumped to $1.55 million -- exceeding $1.5 million for the first time -- and surging 34 percent from 2004's fourth quarter, the report said. The average condo sale price went up 22 percent from the year-ago first quarter.

For Manhattan's entire apartment market, the average price per square foot climbed to $910 -- topping $900 a square foot for the first time. That's up 16.7 percent from the fourth quarter of 2004. It's a gain of 28 percent from a year earlier.

"Improving economic conditions, a tight housing supply, rising incomes and the widely held expectation of rising mortgage rates in the near future, caused housing prices to surge this quarter," the report said.

It was the first time the quarterly report included Manhattan markets above 116th Street on the West Side and above 96th Street on the East Side.

The median sale price -- the point where half the sales are higher and half are lower -- climbed to $705,000. That's up 16.5 percent from the previous quarter and up 18.5 percent from a year ago.

The volume of apartment sales fell to 2,028 units -- down 6.2 percent from the previous quarter and down 5.8 percent from a year ago, according to the report.

Limited supply kept sales volume in check.

The average sale price of a cooperative apartment, where an owner holds shares in the building and does not own the individual unit, rose to $988,746. That's up 15.5 percent from the previous quarter.

The average co-op sale price went up average sale price of a cooperative apartment, where an owner holds shares in the building and does not own the individual unit, rose to $988,746. That's up 15.5 percent from the previous quarter.

The average co-op sale price went up 25 percent from the first quarter of 2004.

04/01/05 02:22 ET

Copyright 2004 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. All active hyperlinks have been inserted by AOL.

What's the difference between buying an apartment and buying a condo?

Apartments in New York that can be purchased are structured in two ways: coops and condos. Coops are less desirable for numerous reasons, and therefore, they cost less. With a coop, unlike a condo, one technically does not own real property. One owns shares in a corporation and that, in turn, owns property. The disadvantages of coops include the following:

1. The coop board tells a buyer the minimum that it must put down as a a downpayment. Therefore, even if a bank is willing to make a loan with only 5% down, if the coop board says that the buyer must put 40% down, then the buyer must do so if he wants to live there. Most coops require a 15 to 25% downpayment. Some, however, require a lot more, and in those circumstances, the market value suffers because people want to put down as little as possible.

2. The owner of a coop can't sell it to whomever he wants. Rather, the prospective buyer must be approved by the coop board. Madonna and other celebrities were turned down by many coop boards because they were deemed undesirable.

3. The owner of a coop can rarely rent it if he wants to move elsewhere...

Isnt there like 2 other threads about this same subject?

^ yes. :ohno:

I think that today Mike is living up to his name.

Does it bother you that I posted an article about NY real estate? If so, why?