The recovery of New York City’s luxury condominium and co-op market has been extensively examined by New Construction Manhattan, and as we have noted, its gradual comeback is now making headway. As 2011 wrapped up, 6,400 units were on the market in Manhattan, equating to a 9-month supply at current absorption rates.
At the same time, apartments in the center of the city are still struggling to find buyers, as it will take 15 months for the market between 34th and 59th Streets to absorb the 1,320 units. Despite housing some of the city’s greatest places of interest, demand for Midtown property is lacking, as the neighborhood is rarely a first choice for residential property buyers.
This is not the case on the Upper West Side, where there is hardly anything up for grabs. Being the neighborhood with the tightest market, only 1,016 units were listed at the end of 2011. Buyers who were once priced out of this prestigious neighborhood took advantage of the lower prices brought on by the 2008 crash, and with an increased demand for larger homes also lingering, property prices on the UWS continue to rise.
In other Manhattan neighborhoods, end-of-the-year numbers show a 10-month supply to absorb inventory on the Upper East Side, and also in Upper Manhattan, above 110th Street on the West Side, and above 96th street on the East side. Downtown, below 34th Street, there is an 8-month absorption rate.
Appraisal firms began tracking the absorption rates of property after the fall 2008 crash, a time when it would have taken 20 months for Manhattan to absorb all of the units on the market. Neighborhoods with more than a 9-month supply at current absorption rates will see lower prices, a 6-9-month supply indicate stable prices, and prices go up in neighborhoods with a 1-6 month supply. The current market's progression to a 9-month supply indicates overall stability, which is expected to last throughout the year. With the lack of new development and demand for high-end property preventing prices from falling, the Manhattan real estate market is surely back on track.