According to recent market reports, Manhattan sales volume for the apartment market was consistent with long-term averages while the resale market saw an influx of inventor that helped to set the pace at more sustainable levels. Meanwhile, the entry and middle markets remain the fastest moving and are likely to remain this way over the next year.
Examining Resale Activity and Rental Rates in Manhattan
With resale activity representing 81.5 percent of the Manhattan market, examining this area of the market gives a good idea of its overall health. For the second quarter of 2016, the median sale price for resales was unchanged from the same time last year at $945,000. The average price per square foot, however, set a new record at $1,453. This represents a 13.8 percent increase. Meanwhile, the average sales price of resales fell by 10.6 percent to $1,496,233 as the number of resales fell by 9.4 percent to 2,231. During this same time period, the number of new development closings increased by 138.2 percent to 505.
During this same quarter, apartment prices in Manhattan continued to set records. This was mostly due to the heavy volume of new development closings that went to contract 12 to 18 months ago. In August, rents remained stable and saw a decrease of only 0.4 percent when compared to the previous month. When compared to the same time last year, rents increased by 1.4 percent. Meanwhile, inventory increased by 7.3 percent from 10,203 units to 10,943 units. The largest increase in rents was seen in the price of studio non doorman apartments in the Financial District, which saw a 17.8 percent increase. At the same time, the Financial District saw the largest decrease with one bedroom non doorman apartment rents falling by 7.8 percent.
New Developments on the Rise
At the national level, new home sales are on the rise. When comparing August to July 2016 figures, new home sales fell by 8 percent. When comparing August 2016 to August 2015, however, new homes saw an increase of 21 percent. While the overall distribution of home building is concentrated mostly in the West and the South of the country, recent reports have found that home builder confidence has increased to pre-recession levels this month. In fact, the confidence index increased by six points to 65 out of 100 between August and September, with any rating over 50 indicating that homebuilders feel the market is healthy.
In Manhattan, second quarter figures reflected consumer interest in new developments. In fact, new development median sales price increased by 44.1 percent to $2,693,271 when comparing figures to the same quarter last year.
Luxury Market Gets a Boost
During the second quarter, the luxury market in Manhattan saw its average sales price increase by 5.4 percent to a record $8,622,734. Representing the top 10 percent of the market, the luxury threshold began at $4,325,000, representing a 12.3 percent increase when compared to the same time last year.