Just when you thought Manhattan’s residential prices couldn’t get any higher, they push the envelope a little further. Encouraged by new luxury developments, average Manhattan apartments have hit $2,081,762 — a 13 percent increase from 2015, according to a recent report from Brown Harris Stevens.
The median price in Manhattan, on the other hand, grew 22 percent to reach a cool $1.175 million.
Resale apartments: prices move amid a tight market
According to the report, resale apartments hit a median $965,000 — another record figure for Manhattan and a substantial increase from the previous quarter. But the average price dipped a slight 1 percent from last year, falling to $1,542,348.
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The average price for a resale condo, specifically, fell 5 percent to $1,956,165.
Inventory is still tight for resale units in Manhattan, leading to 2 percent fewer closings on resale apartments since last year.
New development helps inventory stay afloat
The absorption rate, or how many months it would take to sell all active listings in a given market, rose 4.4 months in March, the report says. In February, the absorption rate was 3.6 months.
“Our most recent absorption report shows that, over the last few months, overall inventory has inched higher. On the West Side, the absorption rate is just 2.9 months, while Downtown it’s 4.7. We know much of that is new development, yet resale inventory has been low for some time,” said Hall F. Willkie, president of Brown Harris Stevens Residential Sales.
Because new development presents more inventory, the absorption rate in neighborhoods where construction is booming is inherently longer. On the flipside, areas like the West Side feature especially small absorption rates because the number of listings is so low.
On the West Side, from 59th to 110th Streets and the Hudson River to west of Fifth Avenue, the absorption rate on condominiums is 4.5 months for condos and 2.7 months for co-ops. In February, the absorption rate for condos was three months and 1.9 months for co-ops. The number of co-op listings grew from 238 to 320, but condo listings fell to 299 from 331 the month prior.
Historically, a balanced market in absorption rate is between six and nine months.
With new development units hitting the market at high rates, closings skyrocketed. The first quarter showed a 70 percent increase from last year in new development transactions across all neighborhoods.
“It is incredibly important to understand that generalizing about the Manhattan market is misleading, as we see from the incredible impact of new development closings on overall statistics in this report. We need to look closely at the many sub-markets that make up the city,” Willkie said.
