Manhattan Market Report
Q3 2014 MANHATTAN MARKET REPORT
Manhattan housing prices continued to rise at a decent pace as demand outstripped resale inventory supply. While inventory is up significantly in the quarter, most of the new inventory entering the market has been for new construction projects that won’t be delivered for another year or two. Anyone who is currently in the throes of a property search will know that resale inventory is still extremely low. While the sales pace in the third quarter relaxed compared to last year, the market is still very competitive, with more than 50% of the properties closing at asking price or higher and over 50% of the condo deals closing in cash. Sharp gains in NYC employment and low mortgage rates have kept the market quite tight. Now that the Federal Reserve has ended QE3 and the US economy is humming along at 4.8% GDP, with over 2 million jobs having been created over the last 12 months, (topping the pre-recession peak by 927,000 jobs), a rise in interest and rental rates are expected in short order.
- Price per square foot for condos rose 7.1% year-over-year, rising to $1,487.
- Sales activity declined 15.7% from very high prior year sales level.
- New development inventory, which in many cases won’t be ready for one or two years, almost doubled from the same quarter last year.
- New development properties closed price per square foot averaged $1,800 per square foot in the quarter; however, many of these contracts were entered into months or years ago. Today, we are seeing new developments being contracted at a minimum of $2,000 per square foot, with most in the $2,500 per square foot range.
- Luxury price per square foot rose to $2,617 from last year, with a Luxury entry threshold at $3.25 million.
- Luxury sales activity declined 13.1% and inventory rose a whopping 47%. Most of this increase is in the new development arena, as developers have been targeting only this market segment.
- Listing discount for condos was only 2% from list price. Luxury discount was 5.3%.
- Rental vacancy for August was 1.87%.