…Listings for nonluxury apartments, encompassing about 90 percent of the Manhattan market, have fallen by more than 36 percent year-over-year in each of the last three quarters, the biggest declines in 12 years of recordkeeping, according to data from New York appraiser Miller Samuel Inc. By contrast, inventory in the top 10 percent of the market by price fell only 3.9 percent in the second quarter from a year earlier.
“For the bulk of the market, the 90 percent, it’s probably the most challenging period for a buyer in the 25-plus years that I’ve been observing the market,” Jonathan Miller, president of Miller Samuel, said in an interview.
In the second quarter, 3,638 units priced at less than $3 million were listed for sale, the smallest nonluxury inventory in nine years, according to Miller. The absorption rate, or the amount of time it would take to sell all those properties at the current pace of deals, was 3.9 months, the fastest in records dating back to 2004.
In Manhattan, where the median price for a two-bedroom apartment is $1.35 million and a three-bedroom unit costs $2.63 million, the nonluxury category encompasses many first-time and move-up buyers, Miller said. Nationally, the median price for single-family home in June was $214,200, according to the National Association of Realtors.
Listings for the whole market, from studios to four bedrooms, are falling, Miller said. The costs though to buy a nonluxury apartment are outpacing those of the most expensive properties.
The average price of a nonluxury Manhattan apartment climbed 7.8 percent in the second quarter from a year earlier to $1 million, according to Miller Samuel. The average price for a unit in the top 10 percent of the market declined 8.4 percent to $5.25 million.
“Relatively speaking, it’s gotten more expensive to buy a nonluxury property,” Miller said.
The pool of available homes at the lower end of the market is shrinking as owners who bought during the boom and then saw values plummet wait to list their properties until their equity climbs high enough to justify a sale, according to Miller. New supply isn’t growing fast enough because developers who have revived projects after the credit crisis are almost exclusively building luxury units, he said…