Manhattan condo prices jump again – but is the market sending mixed signals?
Despite a decline in the number of sales, the average Manhattan apartment price reached a record $2.1 million in the fourth quarter of 2016. This figure was 9% higher than a year ago. Furthermore, the average price per square foot was up 6% over last 12 months. However, the median apartment price in Manhattan was down between 4% and 9% from 2015’s fourth quarter depending on the report that you are using. Days on the market is increasing. These numbers include prices for condominiums, cooperative apartments and townhouses in Manhattan.
Foreigners should probably only focus on condominium market (and not the coop market). Condos offer more advantages such as flexible rental policies and limited Board approvals required. Average condo sales prices increased 16% over the last 12 months. However, median sales prices decreased slightly – a reduction of 2% over the last 12 months.
New condo developments, a small segment of the entire condo market, continued to do very well. The average sale price of a new condo development was approximately 40% higher than a year ago. The median sales price of new condos was approximately 42% higher. However, the number of sales is going down and is likely continue to slow further in the first half of 2017.
Room for negotiation?
Apartments sold during the fourth quarter spent an average of 88 days on the market, 10% longer than a year ago. Sellers received 98.0% of their last asking price, down from 98.7% in the fourth quarter of 2015. This basically means that Sellers are willing to give slightly more discount on their asking price.
The Luxury market is defined as the top 10% of closed sales in terms of price. As of the fourth quarter 2016, the luxury market threshold was $4.2 mm. The reports indicate that more than 50% of all luxury sales are done in downtown Manhattan. Prices indicate a mixed story – median prices were down slightly while average prices increased a bit.
Overall, the Manhattan condo market seems robust and Agents are reporting a healthy number of transactions and negotiations. There is certainly a bit more room for negotiation but 2% discount on the asking price still looks like a very tight market. While interest rates are expected to go up, the increase will be gradual and have little effect on the market. The start of the Trump Administration is reported to be a good thing for the New York real estate market. Based on the long history of continued increasing prices, an investment in Manhattan is probably a safe thing no matter what interest rates and Trump eventually will do in 2017!
Elliman, Corcoran, Rutenberg, Wall Street Journal and East-West Property