New York Apartment Prices Q3, 2022

Posted by Wei Min Tan on October 7, 2022

New York property report:  Q3’2022 Manhattan condo market

 

Table showing manhattan Q3 2022 metrics

 

Key Point 1:  Sales volume down 24.3 percent 

In Q3, 2022, sales volume was down 24 percent compared to the prior year in 2021, the record year since tracking started.  The decrease in transactions is mainly driven by interest rates.  In efforts to combat recession, the Federal Reserve has been increasing interest rates dramatically, and this increased borrowing costs overall.

 

Currently, the national average 30-year mortgage rate is around 6.9 percent.  Last year, it was about 3 percent.   The sudden doubling of monthly mortgage payment converted a lot of would-be buyers into renters and hence decreased the buyer pool.

 

 

Contact:  tan@castle-avenue.com

 

 

Key Point 2:  Record high rents

Rental expense is about 30 percent of the inflation index.  With inflation rate at more than 8 percent, rents commensurately increased.  Further, there is added demand from buyers who became renters as result of high mortgage rates.  Back in June 2022, average Manhattan rent hit $5,000 for the first time and that made the news everywhere.

 

In July and August, average rents continued increasing.  In August 2022, average rent was at $5,246 or 28 percent higher than a year ago (table below).   Compare this to the 8.2 percent  inflation rate in August.  The increase in rents far outpaced inflation.

 

 

 

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:  Buying opportunities

We are again in a buyer’s market (the last time was in 2020 during Covid).  How fast the market has turned around.  All cash buyers are at a great advantage.  This is because they are not exposed to high mortgage rates, and they are not competing with buyers needing a mortgage who has since converted to being renters.  The buying opportunities can be summarized as follows:

 

1) Cash buyers have a significant negotiating position.

2) Investors can expect increasing rents and hence rental yields.  No other blue chip income asset has income growing at 28 percent a  year.

3) Completed new developments, where risk is lowest, are more negotiable in both price and concessions.

 

 

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

 

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

 

Weimin’s article, Buying a vacation home in Manhattan

 

 

Article updated October 7, 2022

 

What We Do

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
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale

 

 

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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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