Manhattan, New York Property Historical Price Trends
Posted by Wei Min Tan on October 12, 2022
Manhattan Condominiums and Cooperatives
The Manhattan property inventory consists of 70 percent rental buildings, 20 percent Cooperative apartments and 10 percent Condominium apartments. Cooperatives and Condominiums are units that can be purchased individually (as opposed to needing to buy the whole building). Below are graphs for Condominiums and Cooperatives blended mix for price per square foot, median price and sales volume. The red circles represent recession events.
Data: Miller Samuel Appraisers
Average price per square foot: Graph above shows historical appreciation trend of Manhattan condominiums and cooperatives in terms of average price per square foot. In 1997, the average price per square foot was $328. 2017 set the new price record at $1,775 per sqft, then decreased to $1,657 in 2019. The downturn between 2017 to 2019 was firstly due to the natural real estate cycle and specifically because of an oversupply of high end apartments, a new federal tax bill that decreased interest deductibility and global trade wars.
In 2020, Manhattan was hit hard by COVID-19, and prices came down further to $1,605. Transactions that closed in Q1’2021 reflected deals that were struck in late 2020 and that explains the further drop in price. But the recovery also began in Q1’2021 and consequently sales volume in 2021 surged to the highest level in 32 years. This was driven by low mortgage rates, pent up demand and overall optimism from high vaccination rates and reopening of the economy.
Prices continued increasing through Q2’2022 although still not to the peak of 2017. But sale volume and prices dipped in Q3’2022 because of 40-year high inflation and consequently much higher mortgage rates. The current 30-year fixed mortgage is at 7 percent compared to 3 percent a year ago. A lot of potential buyers became renters and transaction volume decreased by 24 percent in Q3’2022. There is widespread recession concern. Looking at historical trends, prices increase steadily for several years, go down for 2-3 years during a recession and back up for several years each time.
Note that the average price per square foot of a Manhattan condominium in Q3’2022 was $2,080, representing a significant premium over the condo/coop average of $1,618 shown in the graph.
Read the latest Manhattan property market report
Deal Example: Investor client’s 3-bedroom condo in luxury Tribeca building. Great open view overlooking the Battery Park Ballfield. We targeted 3 bedroom condos because of the market’s need for more space post pandemic. Rented out in 1 week.
Weimin’s article, Buying Manhattan apartment to rent out as diversification strategy
Median price: Graph above shows the historical median price of a Manhattan condo/coop increasing from $239,000 in 1997 to $1.25 million in Q2’2022, which was the new record. In Q3’2022, the median price dropped by 7.6 percent to $1.15 million. While the graph shows the blended average of condo/coop, the median price of a Manhattan condo in Q3’2022 was $1.627 million.
Deal Example: Investor client’s prewar West Village condo with high ceilings, amazing open views and prewar charm. These wow factors are highly appealing to potential tenants.
Weimin’s article, Investing in West Village.
Number of transactions: The current Q3’2022 state of the Manhattan market is summarized by (i) doubling of mortgage rate vs last year, (ii) decreased sales volume, (iii) buyers’ market favoring all-cash buyers. 2021 was the record year in sales volume, surpassing 2007. The new peak in 2021 had 13,956 transactions, compared to 13,430 in 2007. The valley was 7,048 transactions during Covid 2020 when we had 3 months of market lockdown. Hence 2020 only represented 9 months of activity.
Deal Example: Client’s condo at 111 Murray Street in Tribeca. Reserved the unit at pre-construction, waited two years for completion after which market price increased 20 percent. The green building opposite is the Goldman Sachs headquarters and one of the reasons we decided to pursue this unit.
Weimin’s article, How to invest in new launch property in Manhattan
What We Do
We focus on global investors buying property in Manhattan, New York for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale
Data sources: Miller Samuel Appraisers
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Wei Min Tan is a Manhattan, New York property broker focusing on global investors. He has been interviewed by CNBC, CNN, New York Times and The Wall Street Journal on the subject of investing in Manhattan property. Wei Min can be reached at firstname.lastname@example.org