RECORD SETTING HIGHS
After a slower first quarter, one which saw prices level off, the second quarter saw a total 180, setting a historic, record high for the average sales price for Manhattan apartments, now at a whopping $1.87 million. While there are a number of different key themes from the past 90 days, the overarching one is, quite simply, the obvious lack of inventory on the market. Those sub themes, however, include:
Stalled Inventory Growth – The consistent lack of inventory, despite last quarter’s slight uptick, is what produced these record-setting, headline-making prices this past quarter. The lack of inventory and strong demand makes it a total seller’s market, at least in the under $5mm segment, and as long as that demand remains, whether it’s coming from foreign or domestic buyers, those prices will continue to remain high.
An Array of Factors Contributed to Record Setting Numbers – Aside from low inventory and high demand, there were a number of additional factors that contributed to those record-setting numbers we saw this quarter, such as improved employment numbers, the strong local economy, an influx of trophy apartments onto the market, and the highest average Wall Street bonuses since 2007.
Bidding Wars Still Happening – The lack of inventory is not only causing prices to go up, but it’s causing bidding wars that sometimes result in the final sale prices that would make your jaw drop, although not at the same pace we have seen in 2014.
Inventory 20% Below the 10 Year Average - According to Jonathan Miller, by the end of June only 5,730 listings were left on the market. While that might be a 1.3 percent increase from the same time last year, it’s still 20 percent below the 10-year average.
It's Tough To Get Your Foot In The Door - One of the hardest hit segments of the market, according to another report, is the under $500,000 price point. According to the report, “as of Q2 2015, total available listings less than $500K in Manhattan have fallen to their lowest share levels ever, comprising only 11.3% of the market with 1,093 listings, representing a share level decrease of 0.7% from last quarter and 3.7% from the same period last year.” We are seeing similar challenges at price points below $3mm as well due to lack of inventory.
WHAT DOES THIS MEAN FOR ME?
Sellers: Are you ready to compete with 6,500 new development units? If you want to take advantage of current slim inventory conditions, the 2nd half of 2015 might give you a chance to get ahead before we see the largest quantity of new units hitting the market in quite some time. Pricing and presentation are key. Learn more about listing with The Magnani Team. >>
Buyers Under $5mm: Looking for that perfect one bedroom pied-à-terre? Renovated 2 bedroom in perfect location? 3 Bedroom under 3 million? So is everyone else. This is where we are seeing the most competitive action right now and the biggest inventory crunch. If you are looking to purchase these types of apartments, cash is king. Thinking of financing? You better be prepared. Learn more about working with a buyer's broker for expert guidance.>>
Buyers Over $5mm: This is where we are starting to see the market soften and a higher concentration of available inventory on the market. Start your search today. >>
New Development: Lots of new product coming onto the market, and we're keeping tabs. Want the scoop? Contact us today.>>