The average Manhattan apartment now costs over $2M

How high can Manhattan real estate go?

The average residential price tag shot up more than 18 percent during the first quarter of the year, topping $2 million for the first time, according to Douglas Elliman’s latest quarterly market report. The median price was $1.1 million during the same period, up 17.3 percent from a year earlier.

Reports from other firms – which use slightly different methodologies and data – also found the average price crossed the $2 million threshold.

Not surprisingly, new development closings — which on balance fetch more than resales — drove prices higher during the quarter, according to Jonathan Miller, founder of appraisal firm Miller Samuel and author of the Elliman report.

Miller noted that those deals represent contracts signed 12 to 18 months ago. In reality, buyers, sellers and brokers are heading into a spring market where demand and prices for new condos is softening and re-sales are gaining traction.

“If you were having this conversation two years ago, you’d say the tie goes to new development,” Miller said. “Now, it’s clearly the resale market.”

On the face of things, new condo sales seem to be moving full steam ahead.

The number of new development sales in Manhattan surged 94 percent to 621 during the first quarter, roughly twice the amount from a year earlier, according to the report. Meanwhile, the median price of new development pads shot up more than 60 percent to $2.6 million during the first quarter (from $1.6 million in 2015’s first quarter).

The numbers tell a different story on the resale front. In that sector, there were 2,256 closings during the first quarter — a 3.6 percent drop that Miller attributed to low inventory. The median price increased 7.3 percent to $950,000.

Of course, the middle section of the market has been firing on all cylinders. According to the Elliman report, the absorption rate — the number of months it would take to sell out all available inventory in the market — was 4.3 months for one bedrooms compared with 5.9 months for two bedrooms and 7.6 months for three bedrooms.

In his own market assessment, Warburg Realty President Frederick Peters cautioned against making sweeping generalizations about the residential market. “The boom in high-priced newly built condos appears to be over [while] the boom in one-bedroom apartments in Brooklyn continues unabated,” he wrote.