Manhattan's Residential Market Continues to Break Records

Downtown, Midtown and the Upper West Side markets all sported increases in closing prices. The Downtown overall median closing price increased 27% from last year to $1.7 million.

NEW YORK CITY—The residential real estate market in Manhattan shook off global and domestic concerns as buyers continue to open up their checkbooks and pay record prices to live in the Big Apple. The Manhattan residential real estate market broke records in the second quarter for overall median closing price ($1,195,000) as well as for the median co-op selling price ($790,000). The median sale price for a condominium of $1.65 million was the second highest on record, according to a report released by brokerage firm Compass. While residential sales prices climbed considerably in the second quarter as compared to a year earlier, contract sales activity slowed in the second quarter and was down for the first half of 2016 compared to the same periods in 2015. Bennett Rosnick, senior research analyst for Compass and the author of the second quarter report, states, “Despite domestic and global uncertainty around interest rates, the U.S. Presidential election, and the long-term results of the United Kingdom’s decision to leave the European Union, we expect to continue to see record-breaking median closing prices in the coming quarters due to the volume of existing in-contract inventory.” However, the drop in contract sales activity so far in 2016, Rosnick warns, could put downward pressure on pricing in the future. The overall median closing price of nearly $1.2 million represented a 20% increase over the closing price of a year ago. Downtown, Midtown and the Upper West Side markets all sported increases in closing prices. The Downtown overall median closing price increased 27% from last year to $1.7 million. There were a total of 3,228 closings during the second quarter of this year in Manhattan, a 6% decline from the same period a year earlier. Condo sales increased by 10%, while co-op closings fell by more than 18%, led by a 22% drop in sales in units priced under $1 million. “Condominium sales in both the $3-million-$5 million and $5 million-$10 million categories increased by over 35% compared to last year, largely due to a surge in closings in a number of new developments, most notably The Greenwich Lane, 10 Madison Square West, and 56 Leonard,” the report notes. Another positive for the Manhattan market is that absorption is brisk in the Downtown market, where the median time on market (68 days) nearly matched that of Manhattan overall (63 days), despite a median closing price that was 41% higher than the entire borough’s. Inventory posted slight gains, while the pace of contract signings slowed. Inventory increased 2% in the second quarter, fueled by a 9% rise in condo units on the market for sale. A total of 3,016 contracts were signed in Manhattan in the second quarter, a decline of 12% from the second quarter of 2015. Rosnick states that there were declines in contract signings in almost all price categories and bedroom types as compared to a year ago.