The Manhattan sales market for residential apartments is split along price lines like never before. And even though that doesn’t sound like good news, it is. While the middle of the market is still recovering and has little inventory, the low-end of the market is thriving and the high-end is out of control in the best way. Want proof? A penthouse with Central Park views in a great Upper East Side pre-war co-op sold for $21 million last week, and no one noticed. It barely registered as news. This goes to show just how commonplace such sales have become, and how the highest sectors of the market have irreversibly shifted expectations toward the extravagant. $14 million for a townhouse here, $18 million for a 3-bedroom here; no big deal. Show people something north of $50 million and then they might be impressed. And it’s not just perception either; recent stats confirm that these numbers are now par for the course.
Data on high-end sales in Manhattan compiled by Olshan Realty Inc. found that since the start of the summer, normally one of the quieter seasons for selling apartments, 106 co-ops, condos, and townhouses listed for $4 million or more went into contract, a 36% increase from last summer. That doesn’t include the duplex condo in One57 that went into contract for $90 million in May either. So the market is healthy, to say the least, and this robust activity is begetting more of the same. For instance, Crain’s New York reported that in the week between August 12th and August 19th, 14 properties in that price range went into contract, which is double the amount of signings compared to that same week last year.
“We had a really strong selling season that seems to have lasted through the summer,” said Sofia Song, the vice-president of streeteasy.com, to Crain’s. One could argue that the strength of the market lies not only in the strong spring, but that it was fueled by the string of stratospheric sales dating back to the now infamous $88 million sale of a penthouse in 15CPW back in December. This argument is based on the idea that perception, while hard to quantify, is a driving force behind the market, and that sale permanently shifted attitudes toward what the appropriate valuation of a condo in Manhattan should be.
Despite this high rate of activity, other metrics have remained curiously stagnant. Manhattan properties in the high-end price range are taking six weeks longer to sell than they were at this time last year, and median prices are still the same at about $6.3 million, although if some of the new record-breaking listings get sold, that will change in a hurry. Those listings are also further evidence that the market is healthier than ever, because owners would not be fishing for huge numbers if they didn’t have good reason to believe that they might actually get someone to bite. Based on past sales, these gambles are rational ones, even if the numbers are still hard to believe.