Manhattan Market Overview 2Q 2006

The phenomenon of rising prices and declining sales is a classic sign of a market in transition. The market has entered a period where the sellers no longer have a clear advantage in the typical sales transaction. Buyers were expecting a deep discount on all transactions while sellers remained fairly firm in their pricing. As a result, the number of sales dropped as the buyers who were resistant to rising prices simply chose not to participate, while those who stayed in the market paid record prices on average. The modest uptick in mortgage rates since the beginning of the year tempered demand as both existing and new development inventory was rising. While inventory levels are the highest they have been in ten years, the selection for buyers has not improved as much as the inventory numbers would suggest as sellers have not yet responded to the weaker demand. There is still a substantial portion of listings that are priced as if the market was seeing double-digit annual appreciation that occurred over the past several years. As a result, it is taking longer to sell an apartment and there is generally more negotiability.

   Long Island Market Overview 1Q 2006

Homes sales continue decline and available inventory rises as values continue stabilization trend during the first quarter. The average sales price for the first quarter of 2006 decreased slightly to $506,600, a decrease of 0.8%, however, this remains 8.2% above the prior year quarter. The slight downturn is a continuation of the trend towards stabilization of prices in the Nassau and Suffolk region while conversely the prices continue to increase in the Queens market.

   Hamptons Market Overview 1Q 2006

Values of homes in the Hamptons continue to set records The average sales price of a Hampton residence has once again set a record at $1,712,259, a 19.5% increase over the prior quarter and a 32.4% increase over the prior year quarter. Since this report's inception, 1st Quarter 2004, the average sales price has increased each quarter, topping the one million dollar threshold in the 2nd quarter of 2004.

   Manhattan Market Report 1996-2005

The Manhattan market saw record prices in all major price categories: Average sales price, average price per square foot and median sales price. All categories saw year-over-year gains in excess of 20%. Average sales price remained above $1,000,000 and set a record of $1,221,265, increasing 21.6% over the price year average of $1,004,232. Average price per square foot set a record at $965, increasing 25.8% over the prior year average price per square foot of $767. Median sales price set a record at $750,000, increasing 23.8% over the prior year median sales price of $605,859.With all three price indicators showing similar percentage gains, there were broad-based price increases across most market categories. One of the distinctive characteristics of the market in 2005 was the decline in the number of transactions. A modest increase in mortgage rates and double-digit price gains have reduced affordability. Mortgage rates were above the prior year but are still below levels seen ten years ago. Analysts expect fixed and adjustable rates to increase slightly in the first half of 2006 as the economy continues to improve but the shift in the housing market to more modest price gains may keep further near term rate gains in check.

   Manhattan Townhouse Report 1994-2003

Over 1,000 residential townhouse transactions were analyzed over this ten year period. 1, 2 and 3-5 (delivered vacant) family houses comprised the data set.

The average sales price of a Manhattan townhouse, defined as a 1-5 family property that could be delivered vacant, increased 10.1% this year to $4,041,650, breaking through the $4,000,000 threshold for the first time and setting a new record. This price is essentially double the record seen in 1998 when the average sales price at $2,021,767 exceeded $2,000,000 for the first time.

Manhattan Townhouse Report 1994-2003 prepared by Miller Samuel Real Estate Appraisers

   Rental Market Overview - 2006

Manhattan rents in the first half of 2006 have increased anywhere from 6 –21% depending on the neighborhood, stronger gains than most investment returns in the equities markets. The overall average and median rents for Manhattan increased by a substantial 6% in just the first six months.

   Rental Market Overview - 2005

New York City's rental market is thriving. With buying prices out of reach for many and with interest rates on the rise, there is no sign of its flagging anytime soon. The number of occupied rental units has increased by 4,000 over the past three year and the city continues to encourage activity with robust programs that offer construction and tax incentives. Throughout 2005, the average and median rental prices increased in all apartment unit sizes and across all neighborhoods. An entry level studio apartment on the East Side, for instance, grew from $1,341 in 2004 to $1,418 in 2005. The luxury category of rentals, defined as the top 10% of transactions in any given price range, showed similar results. A classic six room unit rented for $18,008 in 2004 but in 2005, the rental price was $19,500. 70% of New Yorkers are impressed with the increased quality of their living environments having rated it as good or excellent - the highest score in last 27 years.