Studios and one-bedroom apartments in Manhattan made a comeback during the first three months of this year, according to quarterly residential market reports released Tuesday morning, as rising rents forced more people to look at buying a place.
These starter- or entry-level apartments represented 56.2% of all sales transactions that closed during the first quarter, according to a report by Prudential Douglas Elliman and Miller Samuel Inc. That was the largest share of the action the segment has accounted for since the fourth quarter of 2009, when the first-time-buyer tax credit touched off a surge in that segment.
In this year’s first quarter, there were a total of 2,311 closings, down 3.5% from the first quarter of 2011. Similarly, in a separate report, the Corcoran Group said studios and one-bedrooms accounted for 52.4% of all sales in the first quarter.
“Rents are extremely high, and it is driving more first-time homebuyers into the sale market,” said Pam Liebman, CEO of the Corcoran Group. Additionally, “we saw a big rush in the studio and one-bedroom market because the mortgage interest rates are low,” added Dottie Herman, CEO of Elliman.
Although the average price was lifted by the record-breaking sale of Sanford Weill’s 15 Central Park West penthouse to a Russian billionaire for $88 million, the median sale price eased slightly. In the first quarter, the median stood at $775,000, down 0.9% from year-earlier levels, according to the Elliman/Miller report.
“Prices are moving sideways,” said Jonathan Miller, CEO of Miller Samuel, adding that prices have remained stable for more than two and a half years.
Separately, brokerages Halstead Property and Brown Harris Stevens painted a significantly more bullish picture of Manhattan sale prices. Both reported that the median sale price rose 4% to $821,500 in the first quarter from the same period a year earlier. “The market overall is doing very well,” said Diane Ramirez, president of Halstead. “Everything looks healthy.”
The super-luxury end of the market also turned in a solid performance in the period. Brown Harris Stevens, which represented both the buyer and seller in the 15 Central Park West deal, reported that there were 16 other $10 million-plus transactions that closed during the quarter, compared with a total of 12 a year ago.
According to the Corcoran Group, activity on the high end will continue to be strong. Ms. Liebman said there are 30 properties, 22 apartments and 8 townhouses, which went into contract for more than $10 million during the first three months of the year. Closing figures for those deals are expected to be reflected in the second-quarter reports.
And it’s not just the high end that is hot. Apartments at all price ranges sold well in the first quarter. Streeteasy.com, which tracks contract signings across Manhattan in its quarterly market report, said 2,621 listings entered into contract during the quarter, up 23.5% from the same period in 2011. All the activity bodes well for the spring results which will track deal closings. “I anticipate a robust housing market in the spring,” said Mr. Miller.