Everyone keeps talking about a luxury market slowdown, but the numbers are in for Manhattan sales in the first quarter of 2016, and they still reflect the good ol' days of NYC's real estate boom.
According to Douglas Elliman's Q1 Manhattan sales report (and corroborated by Corcoran's), the average price of a Manhattan apartment surpassed $2 million for the first time ever this year, with the median price of an apartment now reaching $1.137 million (which is just 1.1 percent less than the record set in Q4 2015.) Those numbers are alarmingly high, but include the closings of some major contracts penned years ago, like at 432 Park Avenue, where its first condo closed in January for $17.75 million.
At Corcoran, sales and contracts signed are down from last quarter, but median and average prices are up. It seems to be another case of big closings swaying numbers.
New development closings in Manhattan are up an astonishing 94.1 percent from this time last year, but the Elliman report points out that listing trends moved in the opposite direction, where new development inventory plunged from the previous year for the third quarter in a row.
"I find it fascinating how long the market takes to react to a change when conditions have been going a certain way for five years," Douglas Elliman data compiler Jonathan Miller says, pointing out the difference between the market now and what it reflects as big contracts signed years ago begin to close.
It isn't just luxury contract closings that are shifting overall pricing higher. The resale market is also a contributor. The median resale price rose from $885,000 to $950,000 over the past year, according to Elliman. By BHS's numbers, the median resale cost swells to $965,000, which is a new record for the category. Resale makes up 78 percent of Manhattan's market, so it's nothing to scoff at.
While the super rich were busy signing away millions for the upper echelons of NYC real estate, normies were doing just the same for not super expensive apartments. "At the same time all these contracts were being signed in 2013 and 2014, the actual closed sales for transactions of mere mortals were also at record highs," Miller explains, saying that the record numbers were largely caused by the release of pent-up demand created during the recession years. The same time that closing volume was setting records, new development contracts were also being signed in record numbers.
The long and short of it: the market reports have yet to reflect the slowdown in luxury sales, and are actually reflecting just the opposite of what's really going on now that contracts penned in 2013 and 2014 are just closing. Looking for dipping numbers? Check back in a few years.
- Elliman Manhattan Sales Q1 2016 (PDF) [official]
- Corcoran Manhattan Sales Q1 2016 (PDF) [official]
- BHS Manhattan Sales Q1 2016 (PDF) [official]
- HPDM Manhattan Sales Q1 2016 (PDF) [official]
- It's More Expensive to Buy In Manhattan Than Ever Before [Curbed]
- All NYC Real Estate Market Reports coverage [Curbed]
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