Boosted by a heavy volume of new development closings, Manhattan apartment prices soared in the second quarter of 2016, rising 13.1 percent over the same period last year.
According to the second quarter Manhattan Sales report by Douglas Elliman Real Estate, resale activity of co-ops and condos, which represented 81.5 percent of the market, showed a median sales price of $1.1 million. Median sales prices of new developments stayed steady at $2.6 million, the report prepared by Jonathan Miller of the appraisal firm of Miller Samuel, Inc., said. The median sales price in 2015 was $980,000, the report said.
“Manhattan apartment prices continued to set records partly due to the heavy volume of new development closings that went to contract 12 to 18 months ago,” Miller said.
The number of resales actually fell 9.4 percent to 2,231, but the number of new development closings surged 138.2 percent to 505 sales from the same period a year ago, according to the report.
“Manhattan sales volume for the spring apartment market was consistent with long-term averages,” noted Elliman President & CEO Dottie Herman. “Additional inventory finally entered the resale market after three years of unusually low supply, helping ease the market’s pace to more sustainable levels. The entry and middle markets still remain the fastest moving and we expect more of the same in the next few quarters.”
Setting the Bar on High-End Luxury
“The luxury market, representing the top 10 percent of all sales,” said the Manhattan Sales report, “set new price records largely with help from new development closings that accounted for 58.4 percent of sales. Luxury average sales price increased 5.4 percent to a record $8,622,734 and luxury average sales price per square foot increased to a record $2,973 respectively from the same period last year.”
In the co-op market, where sales continued to decline for the eighth consecutive quarter year over year, the average sales price went up 1.5 percent in the second quarter to $1,301,812. However, that was 15.4 percent lower than prices seen in the second quarter of 2015. The co-op median sales price was around $945,000, equivalent to its 2015 mark.
On the other hand, condos saw an average sales price of $2,758,468, a 14.2 percent jump from the second quarter of 2015. Median sales prices were also higher by 13.4 percent, rising to $1,575,638.
The volume of foreign buyers in the market is affecting a majority of the new condo closings, and many of these buyers choose to do an all-cash transaction. “Market-wide,” said Miller, “the share of cash transactions was 45 percent of all apartment sales, 33 percent of co-op sales, and 58 percent of condo sales.”
“The number of sales at or above $5 million jumped 27.4 percent and at or above $10 million increased 23.4 percent, respectively, from the prior year quarter,” Miller said.
Debra A. Estock is managing editor of The Cooperator.