Lack of Condominium Inventory Sends Prices and Sales Soaring
As covered extensively by New Construction Manhattan, the Manhattan real estate market has been booming from the number of condominium sales in the past month despite the struggles of the national and global economy. Enthusiastic buyers, spurred by a 3% decrease in market-wide inventory since last year, have diligently pursued apartments for sale in Manhattan, and this trend has greatly benefited brokers, many of whom now find themselves selling condominiums above their asking prices.
With condominium availability slumping to significantly lower levels this May than in last month, prospective buyers have frantically scrambled to sign contracts with their brokers. According to the Corcoran Group, the price per square foot in three-bedroom condominiums has noticeably risen since last May from $1,320 to $1,667, in large part by the restricted selection of condominiums available. This has put consequently put pressure on apartment hunters, causing a 15% drop in the average number of days Manhattan condominiums stay on the market. Additional circumstances that have attracted New Yorkers to purchasing condominiums in the past month are the soaring rent prices in New York City, encouraging buyers to outbid each other for scarce living space.
Negotiations between buyers and sellers have steadily shifted since the economy has stabilized itself enough to allow real estate prices to amplify. Sellers have witnessed an increase in contracts that were signed above asking price. Not only have these numbers improved in the past month, but also within the past three years, as well. In March 2009, for instance, 95% of condominiums were sold below asking price. Since then in recent months, that percentage has substantially decreased to 75%, continuously proving that New York City’s real estate market has benefited tremendously from smaller inventory.