Oct 1, 2014

Manhattan Market Report |Third Quarter 2014


Manhattan registered a solid Third Quarter 2014 performance as strong sales and persistently low inventory continued to drive prices ever-higher. But while price per square foot continues to rise across the market, other market dynamics are starting to shift.

The number of closed sales was the second highest figure seen in over five years. Because only Third Quarter 2013 was higher, Third Quarter 2014 registered a 10% year-over-year drop in sales. The number of sales is highly affected by two trends: limited inventory at low price points and the strength of the new development pre-sale market. Only 6% of closed sales this quarter were new development sponsor sales, a remarkably low market share, as most new developments today are still under construction.

Inventory is rising. Third Quarter 2014 was the third consecutive quarter to see a gain in active listings, the firstsustained, non-seasonal upward trend in inventory since 2008. With 10% more listings available now versus the same time last year, buyers are finally seeing more options on the market. However, the shift in inventory is not consistent, as co-op listings are actually still down 2% year-over-year. It’s condo inventory that’s growing—up 22% year-over-year—driven by new developments entering the market. A rule to remember: a market in equilibrium  has two times the number of available listings as quarterly sales.

Average price per square foot continued to climb, up 12% annually to $1,305 market-wide (condo and co-op, new and resale combined). Average price per square foot has now risen year-over-year for eleven consecutive quarters. Resale price per square foot performed strongly year-over-year with co-ops increasing 12% and resale condos increasing 7%. But new development far outpaced the rest of the market, with a 30% rise year-over year in price per square foot. The new developments closing this quarter tended to be larger residences, in more luxurious buildings and in prime locations.


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