While some numbers remained strong, the figures coming from the fourth quarter NYC real estate reports showed a strong market finally shaken by all of the national economic turmoil.

The median price of all sales climbed a substantial amount, 5.9%, from last year’s fourth quarter. That number, however, is partly driven by the presence or absence of new apartment sales. Many of the sales of new condos reflect final transactions on deals that were made over a year ago. The more telling indicator of the current status of the market is the median resale value, which was down 3.6% from its 2007 equivalent.

Perhaps the scariest – and most important – numbers come from the inventory data. Total inventory in Manhattan alone rose roughly 39% from last year’s figure. This represents both a huge increase in supply for potential buyers and a harbinger of things to come for the market; namely, a further drop in prices.

Sales of existing units declined 25% from the 2007 4Q.

While larger property holders and landlords may have priced in much of the inventory figures already, smaller, less institutional sellers may be slower to adjust their prices downwards. Indeed, many observers have been noting the incredible lag in sellers’ attitudes. Most notably, those that should have already made steep cuts have made just minor cuts, with wishful thinking taking the place of economic rationality.

This factor has brought about aggressive actions by buyers, making lowball often offers 40% below the listing price. Sellers’ reactions to this quarter’s negativity will partly shape the market in the 2009 1Q.

Another important figure: Sales volume declined 9.4% from last year, which was a 14% decline from the previous year.

Buyers can be happy about the direction of the market over the past quarter: The 2008 fourth quarter saw 2.5 times the number of price reductions in apartments than its 2007 equivalent and a 42.6% increase in price reductions in co-ops.

Still, that the average Manhattan apartment price rose slightly to the dramatic $1.5 million mark this quarter is telling of the long-term prospects for real estate holders in the city. This incredible strength stems almost completely from the New York City luxury real estate market, which remains one of the strongest major luxury markets in the country.

Average prices for new developments rose to $1.3 million.

Perhaps the most telling figure for those looking to buy a new home: Sellers received 95% of their asking price, down from 98% last year. While this drop seems small, it is, in fact, large by historical standards. Combined with the inventory numbers, these figures suggest a market ripe for aggressive activity by buyers, lowballing sellers and remaining firm on contract details.

Prices will continue to fall, but, as anyone who has ever bought a home can tell you, the savvy of individual sellers varies dramatically. Some have adapted already; some have not. Low offers on those that have not will continue to move the market this quarter, and yield exciting finds for smart buyers.

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