December 21, 2015
25 Central Park West
The price to purchase New York real estate has never been higher, according to a new report by CityRealty.
The average sales price of condominiums and co-ops set new records for the second consecutive year, with median prices for each exceeding $1 million. Despite the brief scare of a market slowdown when the Dow Jones dipped in August, New York real estate will continue to have high demand.
“The relative strength of the Dow is one of a host of factors that affect the New York real estate market, but a strong stock market will no doubt boost confidence among domestic buyers,” said Gabby Warshawer, director of research for CityRealty.
“CityRealty Year-End Manhattan Market Report” summarizes the 2015 year in New York's Manhattan real estate, looking at average and median prices in condominiums and co-ops as compared to previous years.
Sky high
The average price per square foot of a condo for 2015 is $1,732, up $84 from 2015. Average sales price on condos, apartments and co-ops increased by about $100,000 to $2.6 million, $1.9 million and $1.4 million, respectively.
Correspondingly, overall residential sales by the end of 2015 will jump from $22.8 billion to $24 billion, an increase of more than 5 percent. Overall sales, by comparison are projected by about 1.6 percent, indicating a demand that continues to exceed supply.
Average prices for co-ops and condos have now jumped 72 percent in the past decade, far outpacing inflation. After a fairly significant drop from 2008 to 2009 and relative stagnancy from 2010 to 2013, the market appears to have made a full recovery.
15 Central Park West
Fewer units sold for at least $10 million in 2015 than 2014 and accounted for a smaller percentage of overall sales, but this is largely a factor of the small number of such units in the first place. The market grew at the $1 million to $4 million level and especially at the $4 million to $10 million level.
Last year, units in the $4 million to $10 million range accounted for $4.6 billion in total sales. This year, that number jumped all the way to $5.9 billion.
The report also includes data on the various neighborhoods in New York. NoHo was the top price gainer and second most expensive neighborhood per square foot overall, with condo prices increasing 27 percent. The report cites pricey closing at The Schumacher as the reason, but it is also worth noting that only 24 units were sold, the fewest of any neighborhood.
For comparison, Tribeca prices increased 14 percent across 238 units and Chelsea prices increased 11 percent over 278 units. Midtown West, Central Park West, and Flatiron/Union Square were the only neighborhoods to see prices drop, over 695, 190 and 221 units, respectively.
1110 Park Ave roof
Still, the 8 percent drop in Midtown West is not necessarily indicative of a trend. Impending developments could cause a reversal sooner rather than later.
“Over the next few years, it will be interesting to see how high prices rise in Midtown West as more buildings in the ‘Billionaires’ Row’ stretch of West 57th Street are completed,” Ms. Warshawer said.
Also of note, condos on the high-end have increased at a rate that far exceeds the overall rate. Prices per square foot in the 25 most expensive condo buildings increased have increased by nearly 90 percent over the last ten years while prices of all condos have increased 61 percent.
CityRealty summarized the findings in a brief video.
Up and down
The data from CityRealty is in accordance with other data citing record prices in New York.
For example, according to data from StreetEasy released in October, real estate in New York’s Manhattan borough grew 9.5 percent year-over-year in the third quarter, representing the fastest growth in seven years,
Today, one in five homes on the market in Manhattan and Brooklyn can be called luxury, based on their high asking prices compared to sales averages within the past year. New York continues to be an attractive market for both locals and internationals, and these two boroughs are expected to continue seeing growth in the near future (see story).
50 Central Park South residence
Despite accelerating growth in New York, real estate in the rest of the country may be trending the opposite reaction.
For the first time in three years, luxury home prices fell in the third quarter, according to a new report by real estate brokerage firm Redfin.
Although non-luxury home prices increased almost 4 percent, luxury homes fell 2.2 percent year-over-year. The drop reflects economic volatility overseas, in China but also Latin America, while also pointing to an increased supply (see story).
Despite prices dropping elsewhere, New York is poised to continue growing.
"While it is impossible to project the exact rate of growth for condo prices over the next year, it is likely that prices will continue to climb in some manner, as they have every year aside from those following the market contraction in late 2008,” Ms. Warshawer said.
Final Take
Forrest Cardamenis, editorial assistant on Luxury Daily, New York
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