In the city that never sleeps, real estate sure doesn’t rest — no matter the economic downturn troubling the rest of the nation. While New York City and Manhattan real estate weren’t completely immune to the housing bubble in 2007 to 2009, and property price drops seen again in 2012, the market has bounced back with vigor, according to Douglas Elliman’s Manhattan Decade Report.
According to its survey dating back to 2006, Douglas Elliman says apartment prices are now surpassing pre-financial crisis figures. The average price at the close of 2015 was $1,832,069, a 6.6 percent increase from 2014 when the average price was $1,718,530. The most recent average sales cost represents a 41 percent increase from 2006, when the average price was $1,295,445. The average price per square foot has increased 20.5 percent year-over-year, from $1,297 in 2014 to $1,563 in 2015. Moreover, price per square foot increased 21.7 percent since 2006, when it was $1,031.
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Jonathan Miller, author of Douglas Elliman’s Manhattan report, spoke with Inman about the release.
“What’s interesting about the Manhattan market is that you have the super-talls with $100 million dollar transactions, but we still didn’t break the pre-financial crisis record until the end of 2015,” Miller said “That’s something that, actually, Brooklyn broke several years ago. We’ve (Manhattan) had this steady, grind-it-out housing market.”
Manhattan condos/Flickr user pasa47
“We didn’t have people quitting their jobs and becoming real estate investors. Also, we had high price points relative to the prior boom. We didn’t have $200,000 to $300,000 transactions that were commonplace, conducive to the other markets around the country,” Miller said. “Those things combined resulted in a fairly rapid ascent out of the market crisis, even though housing prices, in aggregate, didn’t break the pre-Lehman high until 2015. But by 2010, 18 months after the fact, we (still) had a very active housing market.”
The median sales price in Manhattan in 2006 was just $830,000 – not exactly inexpensive, but a figure foreign to most current NYC buyers today. Over the past decade, median sales price has increased 21.7 percent, reaching $1,010,500 in 2015. Last year’s median sales price was the first time Manhattan real estate broke a million dollars. Prior to the onset of the financial crisis in late 2008, $955,000 was the median sales price record earlier that year.
The number of condo sales rose 23 percent over the past ten years, primarily due to the high number of new developments across the Manhattan area. Average sales price on condos grew 66.2 percent, from $1,481,377 in 2006 to $2,462,490 in 2015. Median sales price on condos last year was $1,520,000 — a 52 percent upward shift from $999,850 in 2006.
With that, number of co-op sales dropped 11 percent from 7,645 in 2014 to 6,805 in 2015. But over the past decade, co-op sales advanced 58 percent since 2006. Average price on co-ops dropped 9.1 percent year-over-year in 2015, from $1,484,885 to $1,350,393. Manhattan co-op prices increased 21.1 percent over the decade, and median sales price went from $675,000 in 2006 to $755,000 in 2015, increasing 11.9 percent.
“In Manhattan, 75 percent of the housing market is co-ops. Co-ops vetted better than the banks did, and as a result, prevented deeper losses. Co-ops were seen as a pariah in the ‘80s,” Miller said.
Total number of sales across Manhattan increased from 8,493 to 11,955 over the past decade – a 40.8 percent increase. Number of sales technically dipped year-over-year from 2014 to 2015 with a 5.8 percent drop, and a .3 percent decline from 2013 to 2014.
“Brokerages are a transaction business. We’re still seeing above average volume and a lot of interest in buying real estate,” said Miller.
Another recent record made was average days on the market, at 87 — an all-time low — in 2015. This is a 40.4 percent decrease from 146 days on the market in 2006 and a 14.7 percent decrease from 102 days on the market in 2014.
Although inventory hasn’t been blustering, the Manhattan market is “historically fast-pasted,” according to the report. Inventory in Manhattan has dropped since 2006, most notably 15 percent between 2006 and 2014. Year-over-year, however, there was a 1 percent increase in 2015, bringing inventory to 5,046 units total in 2015. While things have been slow in terms of availability and options, lack of units could be keeping prices high.
Listing discount — or the difference between list price and final sales price after negotiations — increased to 3.9 percent in 2015 from 2.2 percent in 2014. So while the Manhattan market is considered expensive for most, wiggle room is possible.
While market prices indicate affordability for buyers, Miller recommends focusing on activity over price tags.
“Think of housing price trends as sugar and sales activity as protein. There’s a lot of flash in record prices and price trends, but sales activity leads pricing trends by a year to a year and a half. You want to spend more time looking at inventory and sales activity to provide clues to where prices will go,” Miller said.
