Sales Spike On 4-Bedroom Manhattan Apartments... Or Do They?

4 bedroom Manhattan condos for saleTrue or not, it has the force of conventional wisdom -- "it" being the belief that larger families are better off buying a house in the suburbs than buying a multi-bedroom Manhattan condo. There are obvious enough reasons why this might be true -- larger Manhattan apartments also tend to be higher-priced Manhattan apartments; kids love lawns; there's no such thing as a co-op board in Westchester; some people just really want to live in Connecticut for whatever reason. But sometimes this sort of received wisdom is not actually terribly wise, or terribly true. Is there any reason why larger families shouldn't be shopping for a four-bedroom Manhattan apartment instead of taking their burgeoning families to another area code?

The answer, of course, depends on the burgeoning family in question. But an interesting recent article in the Wall Street Journal suggests that the answer may be different than the conventional wisdom would suggest, and that more families are picking Manhattan apartments for sale over suburban homes. "The number of families living in the city has been rising in recent years as has the number of five-person families, according to U.S. Census estimates and state birth-rate data," the Journal's Melanie Lefkowitz writes. "Those factors, combined with a flood of larger apartments conceived at the height of the real-estate boom, have led to an increase in urban apartments with suburban proportions.

The number of four-bedroom apartments sold in Manhattan has nearly doubled over the past five years, to 270 in 2009 from 136 in 2005, according to the appraisal firm Miller Samuel Inc. Sales of large apartments began rising in the 1990s, only to decline sharply after the economic crash of 2001. But in the past five years they have resumed their upward trend, with sales of apartments with four or more bedrooms rising by 29% in the third quarter from the second quarter." According to Lefkowitz's article, that upward trend has continued into 2010, with new construction condos on the Upper West Side and new Upper East Side apartment listings sharing a lot of the responsibility for the spike. It's dramatic stuff, and certainly contrary to the general perception of Manhattan real estate trends.

But, at the risk of being impolite, it's worth wondering how significant it is. For one thing, while there aren't a great many four-bedroom apartment listings in Manhattan, even a near-doubling of sales might not be all that important, given what a miniscule portion it represents of even a slow year's Manhattan apartment sales. For another thing, the only number in Lefkowitz's piece that represents anything but an incremental increase in sales is this: "According to the U.S. Census's New York City Housing and Vacancy Survey, apartments with four or more bedrooms represented more than 12% of owner-occupied units in New York City in 2008, up from 1% in 2005." Which, admittedly, is eye-popping. But is it true? "Uhh...no," Sandy Mattingly, the estimable NYC real estate blogger known as Manhattan Loft Guy, writes. "The percentage of four-plus-bedroom owner-occupied housing units in New York City (not to be confused with NYC 'apartments', or especially with 'Manhattan apartments') was 12.67% in the 2008 survey (129,120 out of 1,019,345), but it was 12.28% in the 2005 survey (124,090 out of 1,010,370)." Mattingly continues in that vein, submitting Lefkowitz's article to a pretty thorough fact-check that reveals... well, a less-dramatic spike in Manhattan four-bedroom apartment sales than promised by those census figures, certainly. The whole critique is worth reading, and so is Lefkowitz's piece -- there's something there, if probably not quite as much as promised. (Spoiler alert: Lefkowitz's error has much to do with forgetting that there are boroughs other than Manhattan in New York City, and that many of them feature large, multi-bedroom homes) The good news? The numbers showing a recovery in Manhattan two-bedroom apartment sales, as we reported here last month, are a lot more convincing, and New York City is still a much more enjoyable place to live than Connecticut.

NYC Daily Real Estate Blog

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