In Manhattan, average sale prices for all apartments increased 29% to $1,548,000. The increase in Manhattan apartment prices, particularly for condominiums, is driving the citywide rise in housing prices, according to REBNY. Citywide condominium sales prices increased 29% to an average of $1,316,000, while in Manhattan, average sales prices for condos increased 33% to $1,834,000. The figure for Manhattan tapers off to a 9% increase when sales at ultra-high end properties such as the Plaza and 15 Central Park West are factored out.
"In the midst of falling property values nationwide, prices are still rising throughout New York City, particularly for apartments, despite some declines among single-family homes," says Steven Spinola, REBNY president, in a news release. "Manhattan average sales prices experienced substantial gains in the quarter and led to the citywide increases, but Brooklyn and Queens apartment average sales prices also saw increases, and are clearly retaining their value." Brooklyn and Queens apartment prices rose 3% to $500,000 and 7% to $286,000, respectively, while condo prices for the respective boroughs increased 1% to $596,000 and 10% to $445,000 over 12 months.
Spinola adds, "Many industry watchers like to point out that, despite rising average condo sale prices in Manhattan and Brooklyn, the number of sales are down compared to 2007, which was a banner year. However, based on the condo sales in the first two quarters of 2008 in Manhattan and Brooklyn, we will easily surpass the number of condo sales recorded in these two boroughs in 2006, a year in which the housing market was robust."
In its latest monthly report analyzing housing sales in 25 US metro areas, locally based Radar Logic Inc. ranked the New York City area—including suburbs to the east, west and north—in fifth place for year-over-year percentage changes in values. Its decline of 5.8% between May 2007 and May '08 put it behind Milwaukee, which saw a 1.1% increase in 12 months; Columbus, OH, where values remained essentially flat; and Charlotte, NC and Seattle, which recorded smaller percentage declines than New York. The New York metro area's price per sf of $283 ranked fourth behind San Jose, San Francisco and Los Angeles. Within the New York market, Manhattan condo prices rose 2.8% to $1,178 per sf during the 12-month period, according to Radar Logic.
A measure of the New York housing market's health is in the number of "motivated" sales: liquidity-driven transactions initiated by financial institutions or foreclosure service firms. Although on a percentage basis the number of motivated transactions increased 59.2% between May '07 and May '08, that compares with increases of 474.1% for Los Angeles, 587.7% for Miami and 1077.5% for Phoenix. In Los Angeles, nearly 30% of all housing transactions during May '08 were motivated, compared to 2.7% in the New York area.
On the eve of expiration of 421a tax abatement benefits for many parts of the city, building permits saw a 325% spike to more than 17,000 for June '08 compared to 12 months earlier, according to REBNY. Manhattan in particular saw 5,751 permits issued, up from 585 in June '07. The new 421a provisions took effect on July 1 and now exclude all of Manhattan and expanded areas of other boroughs.
In a news release, Spinola says the numbers are "astronomical and show an enormous surge in construction activity in New York City, likely attributable, at least in part, to developers moving forward with projects prior to the expiration of the 421a benefits. In the near term, New Yorkers should look forward to the economic benefits generated by the spike in activity."
For the first six months of '08, a total of 26,851 permits were issued citywide, compared to 16,650 issued in the same time period of '07. The number of permits, up 61% from a year ago, equals the number of residential units under construction.
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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.
