Manhattan real estate reaches record prices
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Manhattan real estate prices have soared in recent months with the average price of an apartment in the sector reaching a record high of $1.9 million in May, no doubt delighting investors.
The latest research data from City Realty showed the total value of sales in the district was unchanged between April and May, however, the average sales price clocked an increase from $1.8 million in April, to the record $1.9 million in May, making it the priciest month in New York real estate history.
City Realty’s data is backed up by the second quarter 2015 report from brokerage Douglas Elliman. It found that buyers paid an average of $1.8 million for a Manhattan apartment in the second quarter of the year, an 11.4 per cent increase on the same period last year and an eight per cent increase in the first three months of the year.
Huge increases in condo prices
It’s not just apartments that are increasing in price either; other forms of Manhattan real estate are seeing even bigger gains. The average price of a condo jumped by 20 per cent, while the average co-op price was up 5.8 per cent. It is thought that stalled inventory growth was partly responsible for the condo price growth, along with the increasing number of new ultraluxe tower launches in areas like 57th Street’s Billionaires’ Row.
Andrew Heiberger, chief executive of another brokerage in the city, Town Residential, told New York Daily News: “The consistent lack of inventory continues to support a market environment that can produce record-breaking and headline-making prices, as domestic and international demand for Manhattan luxury property deepens.”
Bigger is better
Larger Manhattan apartments showed the best gains, with the median price for three and four bedroom units rising by 25.7 per cent and 20 per cent respectively.
Smaller units, meanwhile, remained relatively stable in price although studio prices were actually down by 9.1 per cent year-over-year.
What does this mean for real estate investment in 2016?
The increases seen in sales prices in the first half of 2015 have outperformed many predictions for the market. The consensus within the market now is that this specific corner of the real estate market will continue to grow despite its recent surge, but that growth rates will be steadier.
Economists at Zillow expect to see smaller gains in the coming year, with 0.2 per cent increases in house prices expected over the next 12 months, according to reports from the Home Buying Institute.
Jonathan Miller, who created the Manhattan apartment price report for the Douglas Elliman real estate company, spoke to New York Magazine about the atmosphere surrounding the market and its upcoming year: “It’s not panicked like in the last housing boom, but [buyers are now realising] they’re competing with six other people.”
In what looks set to become a seller’s market investors who already have a foot in the door in Manhattan real estate could do very well indeed over the next 12 months as markets level out, buyers have a better idea of what to expect and prices appear set to hold their gains from the recent period of volatility and upwing.