U.S. Housing Cools, but Not High-End Manhattan

Dec. 8, 2006 — -- The rich really are different from the rest of us.

In New York City Thursday, the Kushners, a New Jersey real estate family, confirmed plans to buy a 41-story skyscraper on New York's fashionable Fifth Avenue.

The reported sale price? A whopping $1.8 billion, which would set the record for the highest price ever paid for an office building in the United States.

Then again, New York is also a city where a penthouse just up the street from the Kushners' new building is on the market for $70 million (cash only, please). There are some reports that this is the highest list price on record for a private residence in New York.

This record price, however, cuts against the grain of recent housing reports that indicate the market is actually slowing after years of phenomenal price increases.

In October, the median sales price of an existing home dropped 3.5 percent to $221,000, according to National Association of Realtors. That represented the largest year-to-year decline on record. Many analysts expect housing prices to continue to drop into the next year.

The news comes as Census Department data showed that new home sales in October dropped 3.2 percent, the largest one-month fall since last July.

Wait a second. Prices are dropping at the same time record high prices are being set?

"New York is the last to fall down and the first to recover, and the reason is that so much money is rushing to New York from so many different places," explained Barbara Corcoran, ABC News consultant and the founder of the New York City real estate firm The Corcoran Group.

While a slowing housing market has millions of homeowners worried about the biggest investment they will likely ever make, the super-rich are still in the market for mega-million dollar pied-a-terres in the nation's biggest cities.

"The higher ... the market is anywhere in the U.S., the less those places are feeling the effect of the real estate soft recession," explained Corcoran. "The rich are hit less and they have holding power."

That $70 million Fifth Avenue triplex penthouse features a 3,500-square-foot ballroom with 20-foot windows, a terrace, and views of New York's Central Park. That's in addition to the 16 rooms, the five fireplaces and a rich history of Depression-era celebrities and millionaires drinking and dancing the night away.