The Real Deal New York

Average sales price for Manhattan apartment hits $1.68M

But overall market saw cool off in second quarter; inventory still very low

July 01, 2014 06:30AM
By E.B. Solomont

Manhattan-FBThe Manhattan sales market eased up in the second quarter — but there were still plenty of deals transacted, according to Douglas Elliman’s quarterly report released Tuesday. And the average price of a sale went up nearly 18%.

While sales of apartments grew 6.3 percent during the quarter – the seventh consecutive quarterly increase – the pace slowed compared with the 27.6 percent average growth recorded during the prior four quarters.

At the same time, the 3,342 deals done in the second quarter marked the second-highest number of quarterly apartment sales since 2007. “(The market is) still very active,” said Jonathan Miller, president of appraisal firm Miller Samuels, who wrote the report. “The way I view this is (the market) has returned to a more sustainable trajectory as opposed to the frenetic, manic pace of last year.”

Miller noted that 2013 was an anomaly, with four years worth of pent-up buyers re-entering the market at once. “We ended up having four quarters of record sales activity,” he said.

Overall, median sales prices increased 5.2 percent to $910,00 in the second quarter. The average sales price, however, jumped 17.9 percent, up to $1.68 million.

Inventory levels increased 18 percent to 5,659 active listings, according to Elliman’s data. Even at that level, the total was still only about a fifth of the ten year average for inventory, which is 7,144 active listings.

Given the modest amount of available apartments, the report found 45.9 percent of listings sold at or above the list price, the largest percentage in almost six years.

“There’s still clearly not enough supply to meet demand,” said Miller, who added that low inventory is causing prices to keep rising.

In the luxury market, the median sales price was up 18.4 percent to $4.97 million. In the new development market, prices jumped a record 33.1 percent to $1,900 per square foot, compared with $1,427 a year ago. “Product is shifting toward higher-end product,” said Miller.

In the co-op market, the number of sales rose 8.8 percent to 1,990, with a median sales price of $725,000, up 9 percent. For condos, the number of sales increased 2.8 percent to 1,352, with a median sales price of $1.26 million, up 0.8 percent.

In a separate report also released Tuesday, Town Residential noted that condos accounted for 44 percent of sales in the second quarter.

Meanwhile, another new report — this one by Warburg Realty — stated that the market for high-priced units slowed down in the second quarter. Warburg’s president, Frederick Peters, said it’s become typical for properties priced at $10 million or more to spend months on the market. Properties priced between $3 million and $7 million are being snapped up in weeks. For properties under $2 million, Peters said, expect a bidding war.

“There’s still highly competitive activity in the lower marketplace, but not so much in the higher price ranges,” he said. “As long as there is more demand than supply, people will be fighting over these apartments.”

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