The Real Deal New York

Manhattan average sale price shatters records: report

January 06, 2015 08:00AM
By E.B. Solomont

From left: Elliman's Dottie Herman and a one-bedroom at 120 East 87th Street asking $1.75 million

From left: Elliman’s Dottie Herman and a one-bedroom at 120 East 87th Street asking $1.75 million

The average sale price in Manhattan reached an all-time high of $1.7 million in 2014, driven by new development closings and tight inventory in the resale market, according to Douglas Elliman’s fourth-quarter sales report.

The report, released today, also said the fourth quarter had the second-highest sales volume in 25 years with 2,718 closed sales. The highest was in 2013, with 3,297 closed sales.

“Sales remained unusually high,” said Jonathan Miller, president of real estate appraisal firm Miller Samuel and the author of the report. Despite the strong performance, the report found that for the full year, there was a 0.3 percent drop in sales, to 12,695 from 12,735. But Miller said frenzied buying in 2013 was an “anomaly” that occurred with the release of pent-up demand among buyers.

Even with the leveling off, Miller noted, prices are rising across the board.

For the quarter, the median sale price rose 14.6 percent to $980,000, and for the full year, the median sale price rose 9.9 percent to $940,000. For the quarter, both the average sale price ($1.7 million) and average price per square foot ($1,297) were the highest on record, according to Miller. The previous records were set in 2008, when the average sale price hit $1.6 million and the average price per square foot was $1,251.

Price increases were the result of new development closings as well as upward price pressure in the resale market, where inventory rose 2.9 percent to 3,555 and remains extremely tight, Miller said.

Nearly half of the listings sold at or above their asking price, according to the report. “So even though the supply is greater than in 2013,” said Elliman CEO Dottie Herman, “it’s still low for the city.”

The luxury market, defined as the top 10 percent of co-op and condo sales, also drove prices northward during the fourth quarter. The number of sales at or above $10 million was 39, up 143.8 percent. Overall, the median sales price in the luxury market dropped 2 percent to $4.8 million.

In its own market report published Tuesday, the Corcoran Group said the number of contracts signed during the fourth quarter rose 10 percent from the prior quarter and 3 percent from the prior year. The number of contracts signed, 3,216, was the highest since 2006.

  • I know most of our readers already understand this. We need to come to terms with the realization that real estate, just like anything else that is for sale, is only worth what people are willing to pay for it. That what makes a Rolex worth so much more than a Timex, a steak dinner in an exclusive Manhattan restaurant worth so much more than a steak dinner at a high end diner in Idaho, a Gucci dress worth more than a Pucci dress and a two bedroom condo in Manhattan worth a lot more than a large house in Augusta Georgia. A Rolex, an exclusive Manhattan restaurant, a Gucci dress and a 2 bedroom condo in Manhattan are all symbols of prestige. So yes, real estate prices in Manhattan are up. Many people will complain about the high cost of living in the city, and even criticize others for paying so much for “so little” as they love to put it. 10 years from now those same people will probably congratulate Manhattan owners on investing their real estate dollars in a city that historically makes you a hefty return on that investment. People want to be in New York City. We will continue to have 50,000,000+ visitors each year and many of them will want to stay. There will always be a demand for New York real estate. This is why people will continuously pay more to own something here. There is no other place like it in the world. I love NY.

    George L. Rosario with Coldwell Banker Kueber


    • Charles Dale

      I totally understand what you are saying and I have lived in New York all my life (53 years). I like in Rego Park Queens. The median income for New York City is $51,100 a year. With that, you may qualify for approx. a $120,000 mortgage and for rent, you may qualify for $1,200 a month. Where is the “affordable” housing in the 5 boroughs for the people making the median income of $51,100 a year? That is what people truly need. That is what there is not nearly enough of.

  • Dave

    thanks George. I will call you when this bubble pops and you can find me a nice apartment.