Springtime is traditionally New York City housing’s busiest shopping season. So, apartment sales – despite a weakening real estate environment – seem to be holding their own in initial second-quarter action. But there’s a problem: Termites are gnawing away at the market.

One indicator is an update I just got from Jonathan Miller, a leading tracker of residential real estate and the president of Miller Samuel, a Big Apple real estate appraiser that conducts well-publicized quarterly surveys on the state of the city’s housing market.

Based on his latest findings, Mr. Miller believes this quarter’s activity shows an annualized 5% to 10% gain in both transactions and apartment prices, a dramatic slowdown from about a 25% increase in both areas in the same quarter a year ago.

Mr. Miller ascribes this year’s more modest increase solely to the seasonal factor. “My feeling is things are slipping,”he says.Without the benefit of the seasonal spur, he believes, transactions and prices would be flat to down for the quarter, which is what he expects will be the case in the following quarter.

Mind you, this ho-hum view of housing activity comes despite a strengthening economy, a peppier stock market, and last year’s record $21.5 billion in Wall Street bonuses – which would tend to reinforce Mr. Miller’s contention of a faltering housing picture.

To make his case that the once hot housing market is surely cooling down, Mr. Miller points to these factors:

* Apartment appreciation is easing.

* Apartments are taking longer to sell. They’re now averaging about 130 to 140 days, versus 90 to 100 days through 2004 and much of 2005.

* Listings have ballooned. There are about 6,900 co-ops and condos on the market, about 60% more than the approximate 4,300 available about a year ago.

The chief reason for the city’s housing boom in recent years has been the lack of sufficient inventory. But that’s old news. Given the sizable amount of new supply in the pipeline and the brisk number of conversions of commercial and residential buildings into condominiums, Mr. Miller reckons that inventories will be about 10% higher a year from now.

“We’re looking to at least another two years of more inventory being added to the market,” he contends. He says that means “we’re not going to see a shortage of inventories for several years.”

Ensuring this increase, he believes, will be rising mortgage rates (he expects a couple of more interest rate hikes from the Federal Reserve) as well as widespread expectations of a slowing economy in the second half of the year, which should also slow housing demand.

Does all this mean it’s a good time to buy an apartment? Mr. Miller raises a cautionary note, observing that “so much of the inventory is overpriced.” The sellers are in denial, he says, pricing their apartments like the market is still going up 25% a year. He figures it may take sellers about three more quarters to catch up to reality, and that should weaken their resolve.

Summing up his view of the present tempo of the market, he says, “I would say it’s pretty good, no longer frenzied, but moving. It’s not a buyer’s market and not a seller’s market, but a standoff. What happens is who blinks first.”

Interestingly, the tightest sector of the apartment market, according to Mr. Miller, are residences for the most affluent New Yorkers, those in the range of $5 million to $8 million.

If you’re wondering what the average apartment now goes for in the city, prices are said to be roughly the same as they were in the first quarter. That would mean $423,659 for a studio; $700,201, one bedroom; $1,491,060, two bedrooms; $3,295,963, three bedrooms, and $7,175,170, four bedrooms.

A broker at Coldwell Banker, Elayne Reimer, tells me apartment buyers are much more savvy about the market and pricing, and they won’t overpay, even in the diminishing number of bidding wars. In other words, they’ll bid a certain amount and won’t go above it, she says.

“The days of up, up, and away are history,” she notes. As for prices, she observes: “They’re not going up or down; they’re going sideways.” Presently, one-bedroom apartments are one of the hottest sellers in the market. In this area, anything less than $700,000 goes overnight. The problem, Ms. Reimer says, is you can’t find them.

My thoughts on housing: Two out of every 100 working Californians are now real estate agents. Likewise, 45% of all jobs created nationally since 2001 are related to housing and real estate. Speculative bubbles like this are simply unsustainable. It doesn’t mean home prices will collapse, but it strongly suggests housing euphoria will surely go the way of the rotary phone.

dandordan@aol.com