Manhattan Apartment Prices Near Million-Dollar Mark, Reports Say
Featuring Corcoran's Manhattan Q3 Market Report: A million dollars doesn’t buy what it used to in Manhattan. A combination of high demand and too few listings pushed the median sales price for a Manhattan apartment to just shy of a million dollars in the third quarter of the year, setting a record high, according to several market reports to be released on Thursday by major real estate brokerage firms.
The median sales price, which reflects the middle of the market and is less affected by high-end sales, was $999,000, according to a report by the Corcoran Group. Reports from other brokerage firms, using different figures and methodologies, put the median price at or just below the million-dollar mark, with most calling it a record.
“It seems like a lot of money anyplace else,” said Dottie Herman, chief executive of Douglas Elliman Real Estate, which calculated a median price of $998,000. In Manhattan, “what you get for a million dollars is not a lot of space,” she said, pointing out that buyers on a budget must turn to New York’s other boroughs or to the suburbs to find better values.
After rising incrementally over the course of last year, inventory has essentially been flat since January, said Jonathan J. Miller, president of the appraisal firm Miller Samuel and the author of the Douglas Elliman report. In the third quarter, Mr. Miller said, there were 5,654 available listings, approximately 20 percent below the 10-year average of 7,047 available listings. “That creates price pressure,” he added.
It also makes for rapid-fire sales. The amount of time that listings spent on the market fell 20 percent to a record low of 73 days in the third quarter, according to the Douglas Elliman report. “You have to be very competitive and you have to be quick,” especially at the lower end of the market, Ms. Herman said. “I tell people, ‘You really have to have your ducks in order financially and know the market yourself.’ ”
Overall, the number of closed sales was up for the quarter, driven by robust closings in new development. While prices remained high across all market segments, the average sales price for the luxury market, defined as the top 10 percent of closed sales, dropped 12 percent in the third quarter, to $6.73 million, compared with $7.68 million during the same period last year, as fewer luxury properties closed, according to the Corcoran report.
The highest third-quarter sale was in new development: a $37.9 million penthouse at the Charles condominium at 1355 First Avenue on the Upper East Side. In the resale market, there were only two recorded sales of more than $20 million: a $30 million co-op at 1040 Fifth Avenue, also on the Upper East Side, and a $22 million apartment at 15 Central Park West, on the Upper West Side.
Buyers may be reaching a breaking point when it comes to outsize prices for luxury real estate. “At the upper end of the market, I believe there is a little bit of a pushback from the buyers,” said Diane M. Ramirez, chief executive of Halstead Property, which found that the average sales price of co-ops with at least three bedrooms declined 26 percent to approximately $3.1 million in the third quarter of the year, from $4.2 million during the same period last year.
Hall F. Willkie, president of Brown Harris Stevens Residential Sales, said that though demand remained strong, “more sellers are asking prices that are just not justified.” Especially at the high end, he said, “there’s a glut of inventory that’s overpriced.”
Still, most brokerage firms expect that prices will continue to increase and inventory will remain in short supply as the end of the year approaches. Gregory J. Heym, chief economist for Halstead Property and Brown Harris Stevens, said that while concerns about potential stock market turmoil, a slowing Chinese economy and the possibility of rising interest rates “could have an impact in the fourth quarter, if you look at the fundamentals, we don’t see supply and demand changing on a broad basis.”
Even with an anticipated rise in new development inventory in the next several months, Mr. Heym said, “supply is still at a very low level, and the city’s economy is humming along and rates are still low.”
“Everything that’s been driving the market over the last couple of years is still in place,” he added.
Copyright © 2015 The New York Times Company. Reprinted with Permission. Christopher Lee/The New York Times.