The Real Deal New York

“One of the biggest housing booms and corrections of the modern era”: Manhattan sales settled in 2012, after rocky decade

January 31, 2013 12:01AM
By Hayley Kaplan

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In recent years, the Manhattan residential market has careened up and down like a roller coaster. But the number of transactions has largely remained on par from where they were in the early 2000s, even as prices have climbed, a report released today by Douglas Elliman shows. The report tracked the Manhattan condo and co-op market over the past decade beginning in 2003.

“When you look at the [2003] numbers, between then and now we’ve seen one of the biggest housing booms and corrections of the modern era,” said Jonathan Miller, the president of appraisal firm Miller Samuel and author of the report. “After the smoke has settled, prices are still up over the decade.”

The report found that sales of Manhattan co-ops and condos increased for the third consecutive year in 2012 to 10,508 transactions—or 21.8 percent below the 2007 peak, when 13,430 apartments sold. Sales transactions were at a decade low in 2009 when only 7,430 apartments sold.

Decade-over-decade the number of sales increased 19.4 percent from 8,802 in 2003.

Despite the increase in transactions, sale prices are currently 11 percent to 13 percent below their peak in 2008, although they “showed stability” over the last four years, the report noted. The average sale price in 2012 for a Manhattan apartment was $1.42 million, which was slightly below the 2008 peak of $1.59 million.

Decade-over-decade average sales prices increased 66.6 percent to $1.42 million from $850,340 in 2003.

“We’re clearly below market peak in price, but you could argue that we shouldn’t aspire for peak because that was based on artificial credit conditions,” Miller said.

He added that “the remarkable stability in terms of both price and sales trends is making [Manhattan] one of the better performing housing markets in the U.S.”

Meanwhile, listing inventory fell 21.9 percent decade-over-decade, to 4,749 listings in 2012 from 6,082 listings in 2003. The average discount from a list price was 4.3 percent in 2003 and 5.6 percent in 2012. And the average apartment took 23.7 percent days longer to sell in 2012 than it did in 2003—a difference of 33 days.

Meanwhile, sales of Manhattan townhouses over the past decade, which only accounted for 2.6 percent of transactions, Miller noted, were at their highest level since the credit crunch began, and the third-highest in the past decade, according to a second Elliman report released today. In 2012, 11.7 percent more townhouses were sold than in 2003, climbing to 277 from 248.

The average sale price rose 80.1 percent over the past decade, rising to $5.26 million from $2.92 million. However, that is 25 percent below the 2008 peak. Among luxury townhouses — the priciest 10 percent of sales — average prices grew an incredible 96.3 percent in the same timeframe, to $18.39 million from $9.37 million.

“If you think about what’s been improving over the decade, clearly [Manhattan’s] seen more improvement at the upper end of the market,” Miller said. “Since the townhouse [market] sits at the high-end of the market, they can be acquired by international buyers and they’re fine housing stock.”

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