New York Apartment Prices 3Q 2013
By Wei Min Tan
Manhattan, New York apartment sales surged dramatically in the third quarter of 2013, driven by rising interest rates and buyers grabbing a shortage of inventory.
Transaction volume up 30 percent
According to Bloomberg's article on third quarter New York apartment prices, overall number of sales of condominiums and coops increased by 30 percent while inventory decreased by 21.9 percent compared to a year ago. The number of sales, at 3,837, is the second highest only to the 3,939 sales recorded in Q2 of 2007. The absorption rate was at 3.6 months representing a 13-year low. This refers to the number of months it takes to absorb all the inventory on the market.
As brokers, we see fierce competition amongst buyers, all fighting for very limited condo supply. Realizing the high demand, sellers are asking prices that reflect a marked increase compared to closed comparables. This year, I have been telling clients that closed comparables are good to look at but whatever they pay will be higher than closed comps. Reason is that prices are rising. In most cases, buyers are offering asking price because in this market, the deal is in getting that right apartment, not in shaving a couple percent off the price. Miller Samuel Appraisers reports that 44 percent of transactions in Q3'2013 paid asking price or more.
Meanwhile, condominium prices are increasing reasonably, without indications of bubbly spikes. Prices are higher than the prior peak of 2007/2008. The average price per sqft of a Manhattan condominium apartment was $1,379, a 6.7 percent increase compared to a year ago. Median price was $1.2 million, a 3.7 percent increase over last year. This shows that while buyers are paying asking price or more, they still don't overpay by 10 to 15 percent more than asking price.
The Wall Street Journal reported that megadeals are now no big deal. Year-to-date, $8 billion in transactions went into contract at $4 million or more per transaction. Uptown and apartments facing Central Park used to be the area for megadeals. But now, Downtown is the new megadeal destination. A penthouse at 18 Gramercy Park sold for $42 million while the one at 56 Leonard is in contract for $47 million.
These megadeals are a very small segment of the Manhattan market mix. The Miller Samuel market report shows that 4+ bedroom apartments with a median sales price of $6.4 million account for 4.5 percent of the transaction mix. Apartments above $10 million would be a small subset of this 4.5 percent.
Buyers Accommodating Sellers
In representing the seller of a high floor, terraced one bedroom at 99 John St in the Financial District, we received an all-cash full asking price offer. While in another transaction in Midtown, our seller got 99% of the asking price.
Since most of our business is in buyer representation, it is more challenging because of the large number of all-cash buyers. We cannot turn a buyer requiring a mortgage into an all-cash buyer. However, we can and always present our buyers in the most presentable way to demonstrate our commitment to move fast and go through with the deal. This strategy has worked well and there was only one situation where we lost a deal to a cash buyer.
Being nice and prepared goes a long way.
Copyright Castle Avenue Team at Rutenberg
127 E 56 ST, 4TH FL, NEW YORK, NY 10022 USA212.email@example.com Wei Min Tan is a property broker focusing on Manhattan, New York luxury condominiums and foreign buyers. He is often interviewed by the media including CNN, The New York Times and The Wall Street Journal on the subject of foreign buyers of Manhattan property. View Wei Min's media appearances.
Wei Min can be reached at +1.212.380.6134, firstname.lastname@example.org.
Condominium Apartment Prices
Average Sales Price
Average Price Per Sqft
Median Sales Price
Number of Sales
Days on Market
vs last year
Data from Miller Samuel Appraisers
Castle Avenue Team
127 East 56 St, 4th fl, New York, NY 10022 email@example.com +1.212.380.6134 Property Blog
Manhattan, New York residential condominium specialist focusing on investors and international buyers