Manhattan Real Estate Prices Are Steady, But Sales Drop The Manhattan real estate market closed out 2011 with prices relatively flat, but sales volume for the fourth quarter was down by more than 12 percent from the previous year largely because of shrinking condominium inventory as fewer new developments came to market, according to reports that will be released by the city's major brokerage firms on Wednesday. The median fourth-quarter sales price was $855,000, down 1.2 percent from the same time in 2010, according to one report, from Prudential Douglas Elliman. The figure is far from the market's peak in 2008, when the median was close to $1 million, but up from the bottom in 2009, when the median hovered around $800,000. The number of sales, however, was only 2,011, a 12.4 percent drop from 2010 and a surprising 35.3 percent drop from the third quarter of 2011, according to Elliman's report. "That's a pretty sharp quarterly drop, and I don't know if it's a precursor to lower activity going forward," said Jonathan J. Miller, the president of the appraisal firm Miller Samuel and the author of Elliman's report. Fourth-quarter sales volume typically drops off by about 9 percent from the third quarter, because of a slowdown during the holidays. But Mr. Miller said that the 35 percent decrease was probably "a byproduct of the last six months of global economic volatility, which translates into a pause until consumers figure out what it all means." Dottie Herman, the chief executive of Elliman, said the 35 percent drop may have been exaggerated because third-quarter sales volume was unusually high amid heavy interest from foreign buyers when the dollar was at its weakest. "But over all, prices and volume wasn't that different from the previous year, and I think this year, in 2012, we're probably going to have a lot more of the same," she said. Diane M. Ramirez, the president of Halstead Property, said she was not alarmed by the year-to-year decrease in sales because the 2010 figure had been inflated by a surge in sales in the last months of that year, as buyers rushed to make purchases before an anticipated increase in capital gains taxes. The capital gains tax rate had been scheduled to return to 20 percent from 15 percent in 2011, but Congress extended the lower rate just before it was to expire. "I think what we're seeing is just the normal ebb and flow of the market," she said. Pamela Liebman, the chief executive of the Corcoran Group, said the drop in sales volume was largely propelled by a dip in the number of new developments coming to market. While co-op inventory remained stable, she said, condo inventory, at 3,466, decreased 11 percent from 2010. While some areas, including parts of Harlem, still have new condo projects on the market, downtown neighborhoods like the West Village and Chelsea have extremely low inventory. "We've had a lot of clients hungry for great condos in the West Village, and we have had nothing to show them," Ms. Liebman said. A report by Streeteasy.com showed overall inventory at 13,147, down 5.9 percent from 2010. "I think inventory being down is actually a good thing, because it keeps prices from plummeting even more," said Sofia Song, Streeteasy's vice president for research. It suggests that a lot of sellers are holding on to their properties to wait out the market. The reports also show that luxury sales of $3 million and up continued to be strong. At the super-high end, there were 23 sales with price tags of $20 million or more in 2011, the highest annual number since 2008, according to Ms. Liebman. Hall Willkie, the president of Brown Harris Stevens, said luxury sales rebounded early in 2011 and held strong throughout the year. His firm registered three sales over $20 million in the last three months, and will soon record the record-breaking $88 million sale of a penthouse at 15 Central Park West. At nearly $13,000 per square foot, Mr. Willkie said, "that price may prove to be a one-off and not a proxy for anything." He said, though, that apartments at One 57, the Extell Development Company's 90-story hotel and condominium tower across from Carnegie Hall, which is not scheduled to open until 2013, were selling for $10,000 per square foot. "But even with all these extraordinary sales we've seen," he said, "the high end, like the rest of the market, is still very price-sensitive. Buyers have to feel that prices are justified. Ms. Herman said she expected the bookends of the market, at the entry and luxury levels, to continue to do well. "But what's getting killed is the middle market," she said, "the average person who's looking to trade up and trying to spend between $700,000 and $1.1 million." Because banks have tightened their lending restrictions so much, she said, many of those buyers "have no borrowing power, even if they have good, steady jobs." Until financing loosens up, she said, many of those buyers will be unable to trade in their entry-level apartments for larger spaces.