Manhattan apartment sales slowed in the first quarter, but prices once again rose, thanks to Wall Street bonus money being put to work.
Sales of co-op and condo apartments in Manhattan fell 1.1% from a year ago to 2,005 units, while the average sales price rose 7% to $1.3 million, according to a Prudential Douglas Elliman report Tuesday. The average price per square foot of an apartment hit a record, increasing 10% to $1,004. The median sales price of a Manhattan apartment rose 17% from a year ago to $825,000.
Much of the price jump stemmed from larger apartments representing a bigger piece of the total sales volume than in previous quarters. These high-end sales are greatly influenced by Wall Street bonus money, which typically gets spent on real estate in the first and second quarters.
At the same time, however, inventories continue to pile up in the city. Active listings totaled 6,904 units in the first quarter, up 60% from a year ago (which was a historically low quarter for listings).
"There's a disconnect between buyers and sellers. Sellers tend to be about at least six months behind the curve," says Jonathan Miller, president and CEO of Miller Samuel, the independent Manhattan appraisal company that prepares the market report for Prudential Douglas Elliman.
"A lot of the new listings that come on the market are overpriced," Miller says. "Buyers are looking for a deal, and sellers aren't budging for the most part. If sellers don't come to terms with the new market, then I would think in the third quarter there would be a sharp drop-off in new transactions."
So does this mean buyers should wait it out? Pamela Liebman, CEO of the Corcoran Group, admits lookers are getting more choices now. But she says waiting on the sidelines under the belief that prices will drop might not be a good move.
"History has proven waiting to be a dangerous game in real estate, because over the past six or seven years you've always been forced to pay more," she says.
Liebman says most of the increased inventory consists of new condos. She estimates that 50% of the overall inventory for sale right now is new and resale condos, with the remainder being co-ops. Manhattan's housing stock is roughly split into 75% co-ops and 25% condos.
The most popular real estate area in the city continues to be anything along Central Park, Liebman says. Second to that is the downtown area below 34th Street, which is seeing a lot of loft conversions.
Across the bridge in Brooklyn, apartment sales fell 7% in the first quarter. Townhome sales remain hot, with the median price rising 24% in the past year, according to the latest Corcoran Group report. Overall, the areas of Park Slope and Brooklyn Heights are seeing the biggest price increases, with Williamsburg and Fort Greene also exhibiting much strength, Liebman says.