Many prices have rebounded or have well exceeded their 2008 highs.
And without the crystal ball with so much action in the marketplace, it may make more sense to take a break from this crazy market and look back over the last ten years.
Our chief economist has processed over 145,000 sales to zoom out and get a broader perspective.
I hope you will take the time to look at the report in depth.
The highlights:
Maurice Sendak's Manhattan Live/Work - On the Market
- Manhattan apartment sales rose 12% in 2012 to their highest level since the collapse of Lehman Brothers.
- The average price rose 6% in 2012 to $1,455,797, fueled by a surge in high-end closings at the end of the year. This figure is now just 5% shy of the record level of 2008.
- Co-ops (+7%) and condos (+6%) saw similar gains in average price during 2012.
- Over the past ten years, the average price of a Manhattan apartment rose 111%, while the median was 92% higher.
- Condos posted a higher increase in average price during the past 10 years than co-ops.
- Downtown (+135%) posted the largest increase in the average price for all apartments over past ten years, followed by Midtown West (+116%) and the East Side (+113%).
- Co-ops accounted for 56% of apartment sales last year, their highest percentage of sales since 2005.
The surge of closings at the high end in January put a dent in closing volume for Q1 2013 (see the report here), which makes these numbers even more remarkable.
Year over year the average sale price is down due to one $88mm sale 1st quarter of last year- which makes this massive amount of information that much more useful- when one huge sale can skew numbers so much!
Before we go any further, keep in mind that over the last 10 years, many areas outside of NYC are selling at lower prices than they were 10 years ago!
And these other highlights are quite amazing:
- Number of jobs is up 10% from 10 years ago.
- Housing starts in NYC are about 20% of what they were at the top of the market in 2007
- The average price of a one-bedroom (across the entire city including coops and condos) is up from $412,000 to $712,000 (!!!)
- The two-bedroom average is even more stark: $875,000 to $1.4mm!!
- Three bedroom averages went from $2.2mm to $3.9mm.
My takeaways are the following:
- Brooklyn has changed the complexion of the marketplace and it has become it’s own market almost entirely, independent of Manhattan’s pricing- people want to live there and pay according to demand.
Currently, there are ZERO two-bedroom apartments in Brooklyn Heights on the market under $800,000 currently.
Almost no inventory in Williamsburg!
Demand is soaring and nothing to sell.
- Mortgage Rates are playing an outsized role in the appetite for real estate right now.
There are some scary things being written about the longer-term outcomes of this low-rate environment (click here for but one), but worth reading all perspectives!
- Larger apartment rebounded quickly and will continue to outpace smaller apartment gains- but there are still opportunities with smaller apartments to pick up units before they return to pre-2008 pricing.
- The lack of properties right now, continued low rates, and lack of housing starts should keep this frenzied low inventory / high demand going for some time.