Real estate sales cooled in Manhattan in the fourth quarter while average sales prices continued to escalate, though with signs of moderation, according to a market report prepared by Miller Samuel for Prudential Douglas Elliman.
All price indicators showed double-digit gains in excess of 20 percent over the prior year quarter but with single-digit gains over the prior quarter, showing evidence that the market has “shifted gears” to more modest appreciation levels, according to the report released Wednesday.
The number of Manhattan real estate sales dropped 27.2 percent to 1,574 units from the prior year quarter total of 2,161 units and dropped 21.2 percent from the prior quarter total of 1,997 units.
Over the past 15 years, the average drop in the number of sales from third to fourth quarter has been 6.7 percent, according to the report, so the double-digit decline was significant.
Though real estate sales historically have slowed at year-end, Miller Samuel CEO Jonathan Miller believes the figures show more of a trend toward a normalizing market than just the typical end-of-year lull — with a few caveats.
“I think that the drop in number of sales was an anomaly caused by a rough fall – rising gas prices and mortgage rates, change in the Fed chairman and two hurricanes. While I think that the number of sales will be lower than recent years, it will likely be well above the levels seen in the current quarter,” he said.
Fourth-quarter data would suggest that real estate price appreciation in Manhattan will remain modest over the year, Miller said, though mortgage rates are the wild card and they would appear to be unlikely to spike and more likely to remain flat or trend upward slightly. “This will ease demand, causing inventory to remain at higher levels than we have seen in recent levels,” he said.
The fourth-quarter average sales price increased 20.3 percent to $1.19 million from the prior year quarter average of $987,257, and was up 3.3 percent from the third-quarter average of $1.15 million.
The median sales price increased 25.6 percent to $760,000 in the fourth quarter over the prior year, and was up 1.3 percent from the prior quarter median sales price of $750,000.
The average price per square foot exceeded $1,000 this quarter for the first time, reaching $1,002 per square foot.
Listing inventory expanded 52.1 percent to 5,964 units from the prior year quarter total of 3,922 units and was 3.5 percent above the prior quarter total of 5,764 units. And the number of days it takes to sell an apartment increased by four days to 137 days as compared to the prior quarter average of 133 days. In the prior year quarter, it took 41 fewer days or 96 days on average to sell a property, according to the report.
In Manhattan’s co-op market, the market share of studio and one-bedroom (entry-level) apartments was 57 percent, down from 59 percent in the prior quarter as the two- and four-bedroom apartments gained market share.
The average price per square foot of a co-op apartment exceeded $900 for the first time this quarter reaching $908 per square foot, up 25.4 percent over the prior year quarter for $724 per square foot and 2.4 percent over the prior quarter average price per square foot of $887.
In the condo market, the market share of entry-level units crept up to 52 percent, with two-bedrooms losing about 3 percent market share.
The average price per square foot of a condo apartment set a record of $1,112 per square foot, up 30.2 percent over the prior year quarter for $854 per square foot and 0.6 percent over the prior quarter average price per square foot of $1,105.
Meanwhile, the average sales price of a luxury apartment saw an 8.2 percent increase to return above the $4 million threshold to $4.1 million from the prior quarter average sales price of $3.8 million, and increased 12.8 percent above the $3.7 million average sales price seen in the prior year quarter.
In the loft market, all price indicators showed gains over the prior year quarter but results were mixed as compared to the prior quarter. The average sales price and median sales price showed increases over both the prior year and prior year quarter while price per square foot showed a decline from the prior quarter. The average price per square foot of a loft apartment was $941, up 11.2 percent over the prior year quarter price per square foot of $846 but was down 4.8 percent from the prior quarter average price per square foot of $988.
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