Manhattan average sale price shatters records: report

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.

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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.