How are we looking this spring, readers?
In short, very tough hunting for buyers, and very lucrative poaching for sellers.
The latest Annual Market Report came in, for 2013, which dovetails nicely with our discussion of the Spring Market.
I had a short meeting with Gregory Heym,
head of our
in-house economic team, which compiles and puts out these reports.
Let’s cover the highlights and then the commentary:
The highlights of 2013:
- New development accounted for fewer closings in 2013 than in
2012, down to 14% from 18%.
- The flurry of closings before new taxes kicked in was a factor in fewer luxury closings in 2013.
- Co-op closings accounted for 57% of all apartment sales,
a 10-year high.
- Condo prices averaged over $1,900,000 in 2013,
a new record!
- During all of 2013, there was only one sale over $40mm.
- 2013 on Wall Street bonuses appear to be $27 billion – the cash portion only.
The record is $34 billion.
Let’s combine the above with 1st Quarter 2014 highlights:
- Studio prices still appear flat.
- Already, there have been 3 closings this year above $40mm.
- The average apartment price is up 30% year over year.
- The average time on market is at 80 days to contract.
- The new development average sales price is $3mm, up from $1.9mm in 2013.
- Unemployment is down, as well, with greater diversity of the job market than in the past.
- Upper Manhattan overtook the UWS as the leanest inventory…
What are the takeaways from looking at these reports
1) End of year 2012 impacts the conversation still.
1st quarter numbers a year ago were down because so many closings occurred just before end of 2012.
The 30% rise for this recent quarter must take that into account.
This year over year change will likely be the highest for a while.
2) A quick side thought: not every single apartment is up 30% year over year, just
as not every stock in the S&P 500 is up when the market is up.
Pricing should continue to reflect a fine balance between psychology and reality, and a very granular discussion, really, based on neighborhood and apartment size.
3) New development
hit its stride in 2013, but all of the closings are starting to take place now.
We should see pretty crazy new highs during the course of 2014 for condominiums, and for 2-3-bedroom cooperatives, as well.
4) With high pricing in mind, we are seeing very aggressive prices on condominiums and co-ops across the spectrum, and we are seeing
already a bit of a glut in the $8-20mm range, which
take longer to sell due to a
limited buyer pool and strict co-op requirements.
There is some concern
about increases in inventory, especially in that submarket.
5) New construction: expect to see very little Manhattan condominium construction
not catering to the high end, which will
continue to contribute to high co-op pricing.
building permits rose from 2,328 in 2012 to 4,856 in 2013 – a big jump – there still are
not nearly enough (and lots of rental properties are included in that number).
We’re keeping a very close lookout for how all of
out in submarkets across NYC!
It’s quite the hot mess right now.