New York Apartment Prices Q2, 2022

Posted by Wei Min Tan on July 12, 2022

New York property report:  Q2’2022 Manhattan condo market

 

 

Q2’2022 condo median price rose to the highest on record at $1.882 million, a 14 percent increase compared to prior year.  Average sales price showed a similar trend, increasing by 15 percent to $3.045 million.    Listing inventory increased by 18 percent compared to prior quarter and provided relief to the tight supply situation as the market moves away from a seller’s market.

 

Sales pace has slowed from the Q2 numbers reflected above, because of increasing interest rates.   Mortgage rates almost doubled compared to late 2021, and it’s now more expensive for buyers needing financing.

 

 

Key Point 1:  Record median sales price and highest rents ever 

In Q2, 2022, median sales price rose to a record $1.882 million, up 5.8 percent compared to Q1 and up 14.1 percent compared to prior year.  I do not expect further increase in Q3 because sales volume and contract activity have decreased, driven by high mortgage rates and the slower summer season.

 

Because of 40-year high inflation and mortgage rates which made it a lot more expensive for buyers, the rental market is the hottest it’s ever been.  This is the worst time to be a renter and best time to be a landlord.  May 2022 rental price per sqft increased by 21.5 percent to $78.90, while average rental price increased by 22 percent to $4,975.  Vacancy rate for May 2022 was 1.77 percent, compared to 7.59 percent a year ago.  Renters are competing and overbidding for apartments.  As a landlord, rental yields are the highest in 10 years.

 

 

Contact:  tan@castle-avenue.com

 

 

Key Point 2:  Moving away from seller’s market   

Supply of available condos was at 4,043 units, up 18 percent compared to Q1 and 3.2 percent compared to prior year.  This represents the largest Q1 to Q2 jump in inventory.  While the increase in supply is providing relief to buyers (who previously didn’t have enough property to choose from), much higher mortgage rates is making condos less affordable to the roughly 50 percent of buyers needing financing.

 

We’re technically still in a seller’s market but are moving towards neutral.  The sub $2 million sale market (one bedrooms and studios) is slow but the $2 million+ market (2 bedrooms and larger) is still favoring sellers because of the high demand and low supply.

 

 

Deal Example:  Investor client’s condo at Devonshire House, one of Manhattan’s distinguished prewar condos designed by Emery Roth.  Rented out in 2 days after receiving multiple applications.  This was our prewar condo investment strategy and it worked out tremendously well.  

 

Key Point 3:  Opportunity in completed new developments  

The market share of new developments rose to 18 percent, the highest in more than a decade.  Number of new development sales more than doubled compared to prior year.  The largest growth in new development sales is the $3 million+ segment which makes up 40 percent of the new development market.  Developers, understanding the market slowdown, are offering concessions.  All-cash buyers can benefit by negotiating a good deal in a completed project so the unit can be rented out quickly at record rents.

 

 

New York (Manhattan) Q2, 2022 Condo:

 

Average price                        $3.045m (+15.4% vs prior year)

Avg price per SF                    $2,132 (+11.0%)

Number of sales                  1,768 (+9.4%)

Listing inventory                    4,043 (+3.2%)

Listing discount                   5.9% 

Days on market                     92 (-48.6%)

Months of supply                  6.9 months (-5.5%)

 

 

Deal Example: Client purchased this unit at 88 Greenwich Street.  17th floor with double height ceiling and water views.  One block from World Trade Center means strong appreciation potential.  There are 4 new residential condos coming up in the area, all with much higher prices per square foot.  The area is transforming and 88 Greenwich will benefit from it.

 

Weimin’s article, Investing in a Manhattan penthouse apartment

Residential Rents May 2022:

The rental market is experiencing record prices, tight supply and no landlord concessions.  40-year high inflation is driving up rental prices, while mortgage rates approaching 6 percent is turning buyers into renters.

 

Average Rent                        $4,975 (+22% vs prior year)

Rent per sqft                         $78.90 (+21.5%)

 

 

Deal Example: Client’s new condo in Hudson Square next to the new Google downtown headquarters (the new glass building on the left).  We booked at pre-construction, rented out immediately after closing.  

 

Weimin’s article, Buying a vacation home in Manhattan

New Development:

New development sales increased 101 percent compared to prior year as buyers took advantage of the last remaining developer concessions.  New developments’ market share rose to 18 percent of the overall market, the highest in more than a decade.  Buyers able to close all-cash should buy new developments that can close immediately and take advantage of the record high rents.

 

Average price                         $3.94m (+2.7%)

Avg price per SF                   $2,480 (-3.9%)

Number of sales                  688 (+101%)

Listing discount                      6.2%

Months of supply                   5.5 (-35.3%)

Share of market                     17.9%

 

Data Source:    Miller Samuel 

 

Article updated July 12, 2022

 

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We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
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About Wei Min

  • Focuses on investors of Manhattan condominiums, interviewed by CNBC, CNN, Wall Street Journal, New York Times
  • Ex-Citibanker, managed $500 million portfolio
  • MBA, University of Illinois at Urbana-Champaign
  • Manhattan resident since 1999. Currently lives in Tribeca with wife and 2 kids
  • 352 burpees in 23 minutes, student of muay thai kickboxing

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About Wei Min


  • Focuses on investors of Manhattan condominiums, interviewed by CNBC, CNN, Wall Street Journal, New York Times
  • Ex-Citibanker, managed $500 million portfolio
  • MBA, University of Illinois at Urbana-Champaign
  • Manhattan resident since 1999. Currently lives in Tribeca with wife and 2 kids
  • 352 burpees in 23 minutes, student of muay thai kickboxing

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