The High-End End?

Luxury apartment prices dropped in Manhattan in the second quarter of 2008, and sales were down in the first six months of the year compared to the two six-month periods immediately before. The end of an era in Manhattan luxury?

Not bloody likely. There are at least four apartments on the market in 15 Central Park West for $80 million or more, according to various sources and scuttlebutt, including one “quietly” asking $150 million (the city’s biggest listing ever), according to Douglas Elliman mega-broker Dolly Lenz. That’s just one example of the particularly heated luxury market that has seemed all these years, even during the hottest times of the hottest housing market, rather rarefied and detached.

But there appears to be an alternate reality now. The average Manhattan luxury-apartment sales price was down 16 percent from the first to the second quarter, from a record of more than $7.66 million to $6.36 million, according to a report out Tuesday from brokerage Prudential Douglas Elliman and authored by appraiser Jonathan Miller. The median price and the average price per foot also dropped quarterly (though both of them—and the average—were up by double-digit percentages annually).

With a median price of nearly $5 million in the spring, no one should mistake the Manhattan luxury-apartment market as one of sudden egalitarianism.

However! Sales are down generally. If you take a longer view, the increase that started in early 2006 appears to have ebbed. Although luxury sales were up more than 35 percent quarterly, they were also down more than 21 percent from the second quarter of last year. And, taken with the first-quarter luxury-sales amount, the first half of 2008 pales against the first half of 2007: 536 sales now versus 741 then. It also lags behind the second half of 2007 by a good few dozen sales.

Also, Mr. Miller’s stats reflect apartment deals closed during the second quarter, which means they were negotiated well before that time, or at least during it. This is all a snapshot of the recent past and not necessarily the present, which makes the sales and price drops either an anomaly to be dismissed by autumn or the initial signs of the luxury market’s reattachment to the rest of the struggling market.

It would be tempting to tie this trend to the drops in annual year-end bonuses at the city’s largest investment banks (and to the immolation of Bear Stearns). The total year-end bonus amount for the city’s seven largest financial services firms set records in 2003, 2004, 2005 and 2006—and then didn’t in 2007. Bonuses were down totally and individually this past winter, according to state comptroller estimates.

The conventional wisdom holds that shaky times on Wall Street equals shaky times in the local housing market, particularly at the higher end. Perhaps the conventional wisdom is finally right about the luxury-housing market here.

Or maybe that $150 million apartment will sell in 15 C.P.W.

tacitelli@obsever.com