Both the average and median apartment price reached record levels in the fourth quarter. At $1,944,744, the average price for all apartments was 10% higher than a year ago and 5% more than the prior record set in 2015’s first quarter. The median price crossed the $1 million mark for the first time, climbing 18% over the past year to $1,150,000. The total number of closings was 12% higher than the fourth quarter of 2014, fueled by a sharp rise in new development closings.
Two key events led to these record prices. First was a rise in new development closings, which accounted for 26% of all transactions, compared to 17% a year ago. Remember that the average new development price is double the average resale price. It’s also important to remember that contracts for these apartments could have been signed months or even years ago, so they are not necessarily reflective of current market conditions.
The second was that the increase in new development closings, which are almost exclusively condos, also brought the condo share of the overall market to 50%, its highest level since the first quarter of 2009. In the fourth quarter of 2014, condos were 44% of total market activity. Condos typically sell for more than co-ops, and therefore can push the overall average price higher if they comprise a larger percentage of sales.
While the average and median resale apartment price did not set new records, both improved compared to a year ago. The average resale price rose 8% over the past year to $1,528,732, while the median price was 7% higher at $917,075.
For all of 2015, apartment prices averaged a record $1,814,927 in Manhattan, up 7% from 2014. The median sales price also set a new high, rising 9% from 2014 to $999,000. Pricing gains during the year were helped by a 44% jump in the number of new development closings. The total number of sales was just 1% higher in 2015, with 13,025 closings reported at the time of our report.
Shaking off a flat year for stocks, China’s economic slowdown, a rise in terrorism and concerns about rate hikes, Manhattan real estate prices reached new highs in 2015. Low inventory was fought over by both local buyers benefiting from the strong NYC economy, and foreign buyers seeking a safe haven for their money. While the pace of price growth has slowed, the small number of available apartments will continue to keep prices stable into 2016.
The full version of the report can be found HERE