< All Press

Moving on up! NYC apartment prices keep rising

It wasn’t a dazzler, but Manhattan’s residential real estate market held steady during the second quarter of the year.

Prices and transactions rose modestly and inventory declined compared with the same period last year, according to several real estate reports.

The average price of a Manhattan apartment was $1.45 million, up 1% compared with the second quarter in 2011, according to Halstead Property. The number of closings rose 5%.

“It was steady, measured growth,” Jim Gricar, Halstead’s general sales manager, told the Daily News.

Inventory was notably lower in the quarter, down 13%, according to Halstead. Declining listings could slow down the Manhattan apartment market, prompting buyers to sit it out until something better comes along.

“A common theme you hear is, there is nothing to look at,” said Jonathan Miller, CEO of appraisal firm Miller Samuel, which compiles reports for Prudential Douglas Elliman.

One reason fewer apartments were available: Some potential sellers are holding on to their properties because they don’t believe they have the necessary finances to trade up.

The Manhattan apartment market was strong both on the low end and in the ultra luxury segment. But the middle range was weaker.

“It’s the donut housing market,” Miller said. “The markets below and above are outperforming.”

Sales of entry-level apartments – studios and one-bedrooms – accounted for nearly 53% of all Manhattan sales, up from 49.4% last year. But two bedrooms accounted for 31.9% of the market, compared with 37.8% last year.

While entry-level buyers have the benefit of government-backed mortgages, those looking to buy apartments in the middle range are on their own. Some are finding they can’t qualify for financing.

“You have a lot of programs for people who have no money,” said Prudential Douglas Elliman CEO Dottie Herman. “What gets hurt is the middle. You need a bigger down payment than six or seven years ago. Your credit has to be impeccable.”

The super high-end continued to sizzle as foreign buyers saw Manhattan real estate as a safer investment.

The biggest closed sale in the quarter was a $70 million penthouse condo at 50 Central Park South.

Coming in second was a 20-room co-op at 740 Park Avenue that went for $52.5 million. It was the highest price ever paid for a co-op in New York City history, according to Corcoran Group.

Even so, buyers are carefully considering price before making a purchase at both the high end and the low end.

“If they think the price is justified, people are buying,” said Hall Willkie, president of Brown Harris Stevens.

Get Weekly Insights and Research

Housing Notes by Jonathan Miller

Receive Jonathan Miller's 'Housing Notes' and get regular market insights, the market report series for Douglas Elliman Real Estate as well as interviews, columns, blog posts and other content.

Follow Jonathan on Twitter

#Housing analyst, #realestate, #appraiser, podcaster/blogger, non-economist, Miller Samuel CEO, family man, maker of snow and lobster fisherman (order varies)
NYC CT Hamptons DC Miami LA Aspen
Joined October 2007