It’s an interesting time for the Manhattan real estate market: Sure, inventory levels are low, but price stability, active buyers and a fast absorption rate are keeping the market remarkably healthy. With the latest reports issued at the beginning of the month, it is apparent that there is a deficiency in newly constructed properties, but steadiness in numbers is providing strength where it is appropriately needed.
Looking closer at market activity compared to last year, the number of Manhattan apartments available for sale fell by double digits during the second quarter of 2012. Inventory of Manhattan co-ops and condominiums went from 8,070 to 6,891 units, a dive that equates to 13.5 percent year-over-year. Falling even steeper, listings of new developments in Manhattan went from 1,626 to 1,300 units, a 20 percent fall. In terms of luxury residences, numbers are at 1,204 units, which is down 8.2 percent. Further proving that inventory continues to lack, only 5,084 new listings were brought into the market. This number is 15 percent less than the previous quarter, and in comparison to the peak of the first quarter in 2009, is down by 35 percent.
However, rates of current sales indicate it would take nearly eight months to sell off available inventory. Likened to the previous quarter, sales of Manhattan condos and co-ops increased by 14.5 percent with 2,647 units sold. Additionally, the prices of condos and co-ops in New York City remained fairly consistent. In comparison to the prior year’s second quarter, median sale prices dropped from $850,000 to $829,000, an overall 2.5 percent dip. The average price declined as well, coming out to $1.41 million, which is a 3.2 percent drop.
Under most circumstances, steady sales volume and lower inventory equate prices jumping upwards, but during this second quarter, the large quantities of less expensive studios and one-bedroom apartments prevented any price increases. It’s also worth noting that for the third straight quarter, these types of starter units have made up for more than half of all apartment sales in Manhattan. At the end of the day, this comes back to the current sky-high rents in New York City, which is prompting many entry-level buyers to make the plunge and purchase Manhattan real estate.