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Residential: Residential Market Slows, But Keeps Growing

Numbers rise for both prices and unit sales.

By Paul Bubny | Updated on March 21, 2008

Cap rates on per-unit sales of apartment buildings in the New York metro area remain lower than the national average, while per-unit prices YTD are higher, according to data from Real Capital Analytics.

The region’s weighted average cap rate on apartment properties reported closed or under contract is 4.6%, compared with a national average of 5.88%, according to RCA. The median cap rate for the region is 5.29%, compared to 6.23% nationally. The per-unit price for New York metro apartment building sales YTD averages $22,221, while nationally the average figure is $94,607.

Looking at the numbers on individual sales both regionally and locally suggests that growth is continuing, albeit modestly. In its monthly housing market report for December 2007, released earlier this month, Radar Logic Inc. found that the New York metro area’s price per sf on residential space grew by 1.4% compared to a year earlier. That puts the region’s price per-sf growth in fourth place behind Milwaukee at 4.9%, Washington, DC at 2.4% and Charlotte, NC at 2.1%. The New York metro area’s average per-sf price of $286.26 is also the fourth highest in the nation, according to Radar Logic. However, unlike the prices in the three priciest metro areas—San Jose, San Francisco and Los Angeles—it went up rather than down compared to December 2006.

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