Both employing data from ValuExchange, Brown Harris Stevens and Halstead Property reported that the average apartment price in Manhattan was up 36% from Q2 2007 to $1,663,533, while the median price rose 23% year-over-year to $979,000, a new record. Diane Ramirez, president of Halstead, says in a news release that the average price would be up 21% to $1,485,784 if sales at 15 Central Park West and the newly reopened Plaza were taken out of the equation.
Using different sources for its data, the Second Quarter 2008 Prudential Douglas Elliman Manhattan Market Overview puts the average sales price for all Manhattan apartments at $1,669,729, up 25.2% from Q2 '07. For cooperatives, the average sales price is $1,280,201, up 11.2% year over year; for condominiums, it's up 21.8% to $1,267,000. Representing the upper 10% of both condo and co-op sales, the average price for luxury apartments in Q2 '08 is $6,364,000, up 38.4% from the same quarter last year.
At the same time, Prudential Douglas Elliman's report found that the number of sales dropped 21.8% in Q2 '08 to 3,081 units, compared to the 3,939 units sold in Q1 '07. Listing inventory increased 31.2% to 6,869 units, up from 5,237 units in the same quarter last year. Also up was the average number of days each property spent on the market: 135, as against 117 days in '07's first quarter.
"The turmoil of the credit markets has reduced buyer purchasing power, served to reduce employment in the financial services sector and is generally believed to result in reduced individual compensation next year," says Jonathan Miller, president/CEO of Miller Samuel, which prepared the report, in a release. "Nevertheless, the number of sales to date in 2008 is at a higher level, and inventory is at a lower level, than seen in the same period two years ago. Rising prices are largely a product of a skew in the mix of recent closings toward higher end properties."
Dottie Herman, president and CEO of Prudential Douglas Elliman, says in a prepared release that "we should kiss the ground that we live on in New York City, because the market continues to hold its own compared to the rest of the country. Credit is less available to the consumer, so sales have been slower this past quarter, but overall, New York City is a healthy market."
In the borough's rental market, two brokerages' newly issued reports suggest some stagnation. The Real Estate Group's June Manhattan Rental Market Report says that rental prices have remained level from the beginning of the year, while a Q2/mid-year report from Citi Habitats found that rents in all four apartment classes rose from Q1 2008 but are generally flat or off compared to Q2 2007.
"There are many places in which prices are still holding steady; however, inventories are not being absorbed as quickly as in prior years and the general tone of the market seems to be a bit skeptical," says Daniel Baum, COO of the Real Estate Group, in a news release. "Many building owners are offering owner-paid fees, a move generally reserved for down markets. The OPs are a good move by landlords to increase demand, which should help keep the market steady as we head deeper into the busy season."
The Real Estate Group report says that rents for non-doorman studio apartments went up 2.1% year-over-year to an average of $2,190, while non-doorman one-bedrooms declined 4% to $2,859 and non-doorman two-bedrooms slipped 1.8% to $4,069. For doorman apartments, studio rents dipped by 0.2% to $2,642; one-bedroom rents were up 1% to $3,786; and two-bedroom units saw a 1.1% decline to $5,700. Prices are on the rise in Harlem, while Midtown West has seen an increase in non-doorman inventory and price declines in all classes except doorman one-bedrooms.
Citi Habitats' report found that the overall vacancy rate for Manhattan, while well down in the 1% range, had crept up slightly on a year-over-year basis to 1.21%. At the mid-year point in '07, the vacancy rate stood at 0.94%. The West Village's vacancy rate of 0.89% is the lowest of any Manhattan neighborhood; the highest is in Murray Hill at 1.5%.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
