Springtime is late in New York City this year. Lower than normal April temperatures seem to echo the cloudy economic horizon. Worldwide financial institutions are in turmoil. The U.S. stock market is on a rollercoaster ride as it plunges down, momentarily bounces back up and drops down again. Infusions of capital are being pumped into investment banks to bolster balances and inspire confidence. In the month of March, 80,000 American jobs were lost as the impact of the weak housing and finance markets expanded into other businesses. The word recession pops up in more and more headlines. As the American housing crisis reverberates abroad, global housing prices are plummeting as credit tightens in nations as far apart as Spain, England and India. Amidst all this bleak news, how is the seemingly impervious New York City residential real estate market performing? Can the heretofore strong luxury housing markets of Manhattan and Brooklyn continue to defy these stormy times?

Amazingly, yes. At least that is what the first quarter of 2008 sales data confirms loud and clear. However, let us pause. These sales figures reflect deals that were signed in the fall of 2007, long before anyone imagined the demise of Bear Stearns or the dire write-offs of Lehman Brothers and UBS. They are also tilted by the high number of super-luxury closings at record prices at The Plaza and 15 Central Park West. Next quarter’s figures may tell us more about the immediate state of the residential market today. That said, the actual figures continue to set records in all categories at simply astonishing levels.

Manhattan prices have never been higher. According to a recently-released report by the real estate appraisal group Miller Samuel Inc., the average price of a Manhattan apartment leapt to $1.7 million in the first quarter of 2008, up 33.5% from the prior year quarter average. Even if the enormously expensive apartment closings at The Plaza and 15 Central Park West were excluded from this data, the average sales price for this period would still be $1.539 million or 19.3% above the prior year quarter. In fact, according to this study, all unit sizes showed gains over the same quarter last year. Larger apartments experienced the highest percentage gains. In the first quarter of 2008, 71 apartments sold for more than $10 million as compared with only 17 apartments in all of 2007. This extraordinary volume of high-priced units accounted for the huge leap in percentage gains in the largest size categories. As compared to the prior year quarter, studios increased 13%, one bedrooms 14%, two bedrooms 29.6%, three bedrooms 52.3%, and four bedrooms were up 45.4%. Limited inventory at the high-end of the cooperative market also drove up these record prices. Trophy apartments brought trophy prices. Life at the top is still heady. If you raise the bar to $20 million and over, the number of such luxury transactions doubled in the first two months of 2008 versus the first two months of 2007. In early 2008, a 17 room duplex terraced penthouse cooperative at 1060 Fifth Avenue closed at a stratospheric price of $46 million, as compared to the mere $35 million that claimed the cooperative record in the same period last year. First quarter super luxury condominium units leapt off the charts with a closing at The Plaza topping $50 million-plus, and another unit at 15 Central Park West fetching over $42 million. Clearly, the really rich are still really rich.

Is it realistic to believe that New York City will continue to sustain escalating price levels for luxury housing? Reason alone might dictate no. Looking into the crystal ball, industry leaders predict a steady but calmer and more conservative market. Already, there are indications of a slowing down as buyers become more cautious due to worries about both the national economy and potential job losses on Wall Street. Furthermore, tougher mortgage standards are eliminating some buyers from the arena as lenders tighten their standards following the collapse of the subprime loan market. Also, sales volume appears to be slowing as still other buyers opt for a wait-and-see hiatus. Inventory is also rising, but this is always true in an active spring market. That said, exceptional listings in great scarcity continue to go into multiple or even overbids. In summary, sales are steady but most of these deals are being negotiated by mutual efforts of both sellers and buyers. Serious sellers in today’s more cautious real estate world are paying extra attention to correct market pricing. They are also spending time and money to spruce up their apartments to offer them to best advantage: apartments are stripped of clutter, closets are cleaned, bathrooms are reglazed and fresh paint adds sparkle. Meanwhile, buyers are taking more time to make a decision; the frenzy is off the market. As a result, the time on the market for the average apartment to sell has risen to 146 days in the current quarter, 15 days longer than in the same period last year. Today, in contrast to the frantic pace of spring 2007, the New York City residential market appears more balanced and rational. That said, the relentless quest for top-end trophy properties remains unabated. A townhouse mansion has just been listed on East 68th Street for $64 million, and another on East 71st Street for $75 million. More closings are scheduled at 15 Central Park West at the $50 million level. Just as the ultra rich are still purchasing yachts and fancy cars, and traveling on private jets, they are also continuing to be avid consumers of New York City real estate. Gotham has clearly not lost its glittering allure for those who have unlimited budgets.

Accounting for approximately 75% of the city’s housing stock, rentals have also reached record prices. The cost of renting an apartment in Manhattan rose 5.5% last year. Forget the days of finding a one bedroom apartment for less than $2,500 a month. According to a recent study, the average price of a studio in a new doorman building rose to $2,751 a month last year, one bedroom apartments averaged almost $4,000 a month, two bedroom apartments were priced at just under $6,700 a month and three bedrooms climbed to approximately $10,500 per month. Continuing a recent trend, the Upper East Side offered more affordable one bedroom apartments while Soho and Tribeca attained the overall highest prices for city rentals. As some would-be buyers are experiencing doubts about purchasing in the wake of the fallout from the subprime mortgage crisis, some of these former potential purchasers are choosing to rent rather than buy. At the same time, just as the sales market may be slowing down in volume of deals, the rental market also appears to be softening in the first quarter of 2008. Inventory is on the rise. As vacancies increase, some landlords are once again choosing to offer concessions. Worries about the economy have prompted some renters to limit the amount that they are willing to spend for a high-end rental in the Big Apple.

With an overall still strong sales and rental housing market in New York City, what’s new on the horizon? Indeed, horizon is the very word of the moment. Although New York City will never be the architectural fantasyland of present day Dubai, where each skyscraper vies for the most outlandish design in a competition to reach the most dizzying heights, Gotham is following the same global trend of using celebrity “starchitects” to transform the New York City skyline. Living in a building designed by an internationally-known architect has become the new status symbol. Just as one would don a Chanel, Prada or Gucci suit to make a fashion statement, today it is equally important for many style-conscious New Yorkers to live in a Meier, Nouvel or Gehry building. Following the lead of Robert A.M. Stern who designed the Chatham at 181 East 65th Street in 1999, and Richard Meier who began his first far West Side residential tower on Perry Street in 2000, a bevy of celebrity architects are bringing a new design eye to New York City residential living. Residing in a building sporting a star architect signature subtly connotes both wealth and artistic interest. Naturally, an architectural pedigree adds a premium dollar per square foot to developers’ pockets, often estimated at as much as 20%. Hopefully, it also adds excitement and beauty to the New York City skyline. Quite suddenly, architectural residential jewels are sparkling all over the city. Recently, the Swiss superstar firm of Herzog & de Meuron designed a dramatic Noho condominium at 40 Bond Street. The late Philip Johnson collaborated on the arresting Urban Glass House at 330 Spring Street in Tribeca. Robert A.M. Stern has just completed 15 Central Park West which rivals the 1920’s classical architecture of its prewar neighbors.

At present, a myriad of new starchitect towers are on the drawing boards or actually rising from the ground throughout New York City. The High Line in Chelsea will usher in several new cutting-edge residential buildings. Neil Denari, dubbed the architect’s architect, has designed a fanciful cantilevered building named the HL23 which will actually permit its residents to step out of the building onto the new High Line park. Nearby, Jean Nouvel, the French architect who recently won the coveted Pritzker Prize, has designed a dramatic glass-faceted 72 unit condominium tower at 100 Eleventh Avenue. In addition, Nouvel has also designed a soaring slim tapered glass 75 story hotel and apartment tower next to MOMA that is currently up for approval by the New York Landmarks Preservation Commission. Meanwhile, the celebrated Dutch architect Rem Koolhaas has just finished a design for his first New York City residential commission which will be built on East 22nd Street and is slated for completion in 2010. Living in a building with an architectural imprimatur creates its own special aura. For those in the know, the architect’s name alone will convey an address. How swell is that?

From Downtown to the Upper West Side, new residential condominium construction offers a wealth of design, from modern cool to pure classical. Currently, there are three very interesting and appealing new condominium offerings that tilt their head to the past while being very much of the present. Harkening back to another era, the 15 unit new condominium building at 211 Elizabeth Street in Nolita will pay homage to its historic old New York neighborhood. Well-known designer architects Roman and Williams, in collaboration with developers Bob Siegel and Peter Manning, have created a red brick 7 story building anchored by a dozen pilasters on the ground floor, each topped with a decorative capital. In a further nod to old New York, the floors will be walnut herringbone parquet, and the living rooms, which will have wood-burning fireplaces, will be connected to the dining rooms by glass transom doors. In turn-of-the-century style, custom-crafted kitchens will feature walnut framed cabinets with oiled wood countertops. Bathrooms will evoke the atmosphere of a grand European hotel with old world style fixtures. For those who want up-to-the-minute amenities amid the warmth of an old world ambiance, 211 Elizabeth Street at the corner of Prince Street should fit the bill. Prices will range from $1.55 million to $6.95 million.

In a real architectural turnaround, the new condominium offering at 15 Union Square West has gone back to its historic identity but with a completely new facelift. Tiffany & Company originally constructed a 5 story cast iron building in the 1870’s on the then-fashionable and today once again fashionable Union Square. In the 1950’s the ornate cast iron façade was hidden beneath the popular white brick of the period. Now, the white brick has been removed to once again expose the original cast iron structural elements, including the huge arches of the original Tiffany & Company emporium. With a new twist, Brack Capital and the architect, Eran Chen, have encased the cast iron in shaded glass creating a dramatic dark square box topped by six additional stories. These floors will resemble irregularly-stacked glass cubes. The lower floor apartments will feature 16-foot-high living rooms with monumental arched windows while the upper floors will offer private terraces. The internationally acclaimed designer Vicente Wolf has custom-designed all of the interiors. There will be a variation of design and material in each of the bathrooms of the various apartment lines. In addition, all bathroom and kitchen features have been custom-designed by Vicente Wolf for Sherle Wagner. Prices will begin in the low $4 million range and climb to almost $9 million for a terraced penthouse.

Uptown at 535 West End Avenue at 86th Street, the Extell Development Company is constructing a brand new 20 story condominium that brands itself as a prewar building. At first, this may appear to be an oxymoron. In reality, the renowned French born architect Lucien Lagrange is paying homage to traditional prewar architecture, and creating 22 half and full floor residences that exactly mirror in both size and floor plan the prewar design of many of the neighboring Upper West Side buildings. At 535 West End Avenue, a buyer seeking a huge family apartment will not have to combine two or more units as is the current trend around town. This building will only offer mega spaces. The sprawling condominiums at 535 West End Avenue will range from a hefty 3,753 square foot apartment to a gigantic 13,825 square foot residence that will offer five, six or even seven bedrooms. Buyers will have a choice of three kitchen designs, as well as different bathroom layouts and color palettes. The kitchens will feature La Cornue French ranges, the Rolls-Royce of stoves. Smallbone of Devizes will custom design the kitchen cabinetry. If all this luxurious living isn’t already enough, pampered owners will also be able to enjoy the amenities of a private indoor pool and fitness center plus a billiard room and a private lounge for entertaining. Naturally, a luxury price tag accompanies this opulent lifestyle. Prices range from $8.5 million to $25 million.

A wealth of exciting new residential construction is underway in New York City. Amidst a doubtful national economy, buyers are continuing to buy residential property in the Big Apple. Sales at the previously-described new condominiums tell the story. At 211 Elizabeth Street, with sales just commencing, the Penthouse, the most expensive unit in the building, has already been snapped up. At 15 Union Square West, all of the apartments featuring the 16-foot arched windows are in contract, as well as many of the other units. On its opening day in early April, the sales office of 535 West End Avenue was mobbed with prospective purchasers; rumor has it that 40% of the apartments went to contract in the very first week of sales. Clearly, buyer confidence in the intrinsic worth of New York City property has not vanished. That said, it might seem logical to predict a slowing down in the volume of city residential real estate transactions as the global credit crisis expands throughout the national economy into a variety of American businesses. However, even as the credit crisis expands worldwide, tourism and hotel occupancy in New York City is still at record levels. Foreigners, armed with strong currencies versus the low dollar, continue to flock to fabled New York. They are continuing to purchase what to them is bargain property. At the same time, expensive trophy property continues to hold its allure for the superrich. Who would have predicted last fall that Manhattan apartment prices would hit record highs in the first quarter of 2008? Perhaps it is still too soon to know exactly where Gotham real estate will go as we march forward. Hold steady? Move down or up? The wager is yours.