High End and Mid Priced Condos Doing Exceptional So Far in 2012

The early winter m15 Central Park West in Manhattanonths always come with a string of market analysis meant to gauge how Manhattan real estate trends will play out over the next year. We wrote earlier about overall trends experts predict will dominate headlines in 2012. Now the Real Deal has compiled the market trends that have been playing out since January, with commentary from industry players on how we can expect those trends to advance. Over the past month, ultra-luxury Manhattan condos have been doing as well as they did in 2011, while mid-priced condos in the $3 to $5 million range have shown marked improvement. Condos priced lower than that have been sluggish, suggesting that most people who want to buy prefer the extensive room and building amenities high-end apartments provide.

Buyers have spoken of a lack of quality inventory in condos priced in the $1 to $2 million range, leading realtors to emphasize condos that are priced slightly cheaper, in the $800,000 to $1 million range. These condos, while less enhanced than their more expensive counterparts, are likely priced at slightly less than their actual value. If a buyer is interested in investing in quality but affordable real estate, these apartments high in the hundred thousands are likely a smart investment. New condos in Carnegie Hill or the East Village, where development is rampant but prices are lower, are likely to offer these kinds of buildings in spades.

Buyers have also begun purchasing condos that offer more flexibility for lifetime shifts. Realtors have cited an increase in one-bedroom condo purchases, as buyers who would otherwise take studio apartments are opting for the larger space, in case they decide to start families later on. Realtors say this suggests that these buyers are planning more for the long term, rather than looking for investments.

Finally, industry experts say some buyers are holding off because of lingering concerns about the economy. Some buyers believe that economic uncertainty will force sellers to meet them at lower prices.

We can draw a few conclusions from these trends. Foreign investors will continue to play a growing role in Manhattan real estate, as will the ultra-rich who are investing in places like One57 or 15 Central Park West. For those looking for something cheaper, the best return on investment will come from houses priced slightly below $1 million. We’ve as late seen evidence that the economy as whole is beginning to improve. As it does, and buyers become more secure in their assets, the lower priced condos will likely increase in value.