Listing inventory in Manhattan has been on the decline for six consecutive months, a recently released report said.
In the third quarter, apartment inventory experienced a drop of 13.8 percent, a trend that has been gaining momentum, according to Jonathan Miller, president of the appraisal firm Miller Samuel Inc. and the author of the report, the Douglas Elliman Manhattan Market Overview.
Inventory in Manhattan dropped to 5,224 apartments in the third quarter, compared to 6,058 apartments in the prior quarter, and was down 4.4 percent compared to the prior year quarter.
Listing inventory had previously peaked in March of this year and has declined for each month since, including a 7.1 percent drop from August to September. “This percentage decline in listing inventory grew nearly every month during this period, seeming to gain momentum,” the report said.
David Michonski, chief executive officer of Coldwell Banker Hunt Kennedy, said his company s listing inventory was up 36 percent year-to-date compared to the same period last year. But it s still 10 percent below what it was by this time in late 1999 or 2000. Given supply and demand, that means prices will stay high, he said. “There is this perception out there that the market is weaker than it is,” Michonski said. “But (people) are going to be surprised because the inventory just isn t there.”
The Miller Samuel report also found that the average sales price of a Manhattan apartment crossed the $900,000 threshold for the first time ever in the third quarter, reaching $916,000. The jump was a six percent increase over the $864,860 average apartment price seen in the prior quarter, and an 8 percent increase over the prior year, the report said.
For the first time, also, the average price per square foot exceeded $700. At $704 per square foot, that average was a 6.8 percent increase over the prior quarter average of $660 per square foot, and up 8.8 percent compared to last year.
Median prices, however, were relatively unchanged. The median sale price (the exact middle of all sales) was $575,000, the same as the result in the previous quarter, though it was up 10.8 percent compared to last year. The lack of change in the median sales price is likely attributable to the relative stability of apartment mix and the surge in sales of luxury apartments, especially at the upper end, according to the report.
The report also found days on market reduced in the third quarter. The average days on market was reduced by five days to 137 days, compared to the prior quarter average of 142 days. The average listing discount declined to 3.8 percent from 6.5 percent in the second quarter, but was up from the 1.8 listing discount last year. The average days on market will likely continue to drop going forward because of declines in inventory, the report said. The same will likely hold true for listing discounts.
Ken Malian, senior executive vice president and sales director of Douglas Elliman s Tribeca office, said for all of Douglas Elliman s downtown offices – which includes up to Gramercy Park and Chelsea and over to the East Village – purchase amounts have been only 4 percent downward off the asking price. In Tribeca, final purchases have been just two percent off asking, he said.
Looking at different neighborhoods, the Miller Samuel report saw increases in price per foot in the east, west and downtown markets. The downtown market averaged $651 per square foot in the third quarter, a 2.2 percent increase over the prior quarter figure of $637. The east side market posted the largest gain, 7 percent, with $732 per square foot compared to the prior quarter average of $684. The west side increased 3.1 percent to $722 per square foot from the prior quarter average of $700.
Luxury market
The report also looked at the luxury market, defined as the top ten percent of all co-op and condo sales, finding that nearly all price indicators underwent double digit gains. The average sales price increased 13.6 percent to $3,461,532 from the prior quarter average of $3,047,690, and up 10.6 percent compared to last year s third quarter.
Median sales in the luxury market saw a similar pattern, rising 14 percent to $2,695,00 from $2,365,000 in the prior quarter and up 12.3 percent compared to last year. The average size of a luxury apartment in the third quarter, 2,702 square feet, was essentially unchanged from the prior quarter average of 2,692 square feet. This shows that the growth in price levels was not a result of larger apartments, as was seen in the prior quarter.
The average days on market stabilized for the third straight quarter, the report said. The length of time it took to sell an apartment held at 172 days, virtually unchanged from the 171 days seen in the second quarter and the 173 days in the first quarter of this year. The report also found that the average listing discount declined as market conditions improved. The discount dropped to 8.9 percent from the 9.8 percent seen in the previous quarter, still significantly higher than the 3.4 percent level seen last year during the third quarter.
Co-op market
In the co-op market, prices set records for the second consecutive quarter, the report found. The average sales price of a co-op rose 2.7 percent to a record $796,174, up from $775,052 in the previous quarter and up 9.4 percent compared to last year s third quarter. Average price per square foot also set a record at $660, up from $631 in the prior quarter. Median price reached a record high as well, increasing to $492,000 from $479,000 in the prior quarter, and up 15.8 percent compared to last year.
For the second consecutive quarter, supply decreased and demand increased for co-ops. The number of co-op apartments for sale dropped 17.1 percent, with 3,470 units in the third quarter compared to 4,185 units in the previous quarter. The current number is the lowest level of co-op inventory seen over the last year. As listings inventory declined, the number of sales rose to 14 percent over the previous quarter and up 4.2 percent over last year at this time. The number of sales, 1,524 units, was the second highest quarterly average in more than five years. It took 137 days, or nine fewer days than last quarter, to sell a co-op apartment.
Condo market
In the condominium market, average sales price and average price per square foot were at record levels. The average sales price increased 10.4 percent to $1,147,055 from $1,039,331 over the prior quarter and up 6.5 percent compared to the third quarter last year. The current average price per square foot was $789, up 10.7 percent compared to last quarter. The median sales price increased 1 percent to $767,500. Sales surged 12.2 percent, with 800 units compared to 713 the quarter before, and inventory was down 6.4 percent. The greatest gains were seen in the entry-level market, with the average sales price of studio and 1-bedrooms increasing 27.4 percent and 12.1 percent respectively over the prior quarter. The average days on market held at 137, two days longer than the prior quarter.