Manhattan property prices hit new record with buying frenzy

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Guests attend a pool party at the 50 United Nations Plaza in New York City.

Michael Nagle | Bloomberg | Getty Images

Manhattan property prices hit an all-time high in the second quarter as buyers returned to the city and increased demand for the largest, most expensive condos, new reports said.

The median resale price of apartments in Manhattan in the second quarter was $ 999,000, the highest ever, according to a report by Douglas Elliman and Miller Samuel. The average selling price for the quarter increased 12% to over $ 1.9 million.

Spikes in prices and dwindling inventories suggest that Manhattan’s real estate recovery continues to pick up steam as more families seek larger condos and buyers seek to take advantage of lower prices and lower mortgage rates.

“This is a sign of the insanity and activity of the market,” said Jonathan Miller, CEO of real estate appraisal company Miller Samuel. “It is recovering much faster than most participants expected.”

In the second quarter, 3,417 people were sold, which is 150% more than last year. when many New Yorkers left the city during the pandemic, and Covid restrictions prevented the display of apartments for most of the block. However, the rate was also high compared to pre-pandemic levels. It was the strongest second quarter since 2007, according to Miller Samuel. The trade wars were the fastest in two and a half years.

The popularity of buyers has led to the fact that there are fewer apartments on the market. Inventories on the stock exchange are down 27% from last year, and the supply of homes for sale in 6.9 months is now below the historical average of about eight to nine months, Miller said.

The strongest growth is seen at the top of the market – literally. More than 220 penthouses have been sold in Manhattan this year, a record number in history, according to Corcoran Market Research. That’s a 35% increase compared to 164 penthouse contracts signed in the same period in 2019, before the pandemic.

“As the city continues to open up, penthouses have proven their ideal formula: large square footage and private outdoor space, plus all of the luxurious amenities that can only be found in a full-service building,” said Pamela Liebman, President and General director of Corcoran. “For wealthy people, the prospect of making their home in a ‘mansion in the sky’ has never been more compelling.”

The strength of the luxury goods market – over $ 5 million – marks a dramatic turnaround from the pre-pandemic period. An overabundance of luxury condos and sellers’ reluctance to cut prices led to a slowdown in the price range until 2020, while the low end of $ 1 million to $ 2 million was strong. Brokers now say the market is driving growth as the rich got even richer during the pandemic due to rising stock markets and loose monetary policy.

The average selling price of three- and four-bedroom apartments in the second quarter increased by double digits compared to the first quarter.

However, the number of luxury apartments remains high – 13 months, according to Miller Samuel. Because many new developments do not officially list all of their empty homes, Miller said the real number is much higher due to fears of market glut.

“You have to consider inventory management,” he said.

The strength of the penthouse market has also changed the economy of new construction. Historically, developers have sold the penthouse after most or all of the other apartments in the building have been sold. Penthouses finally made them special and created a sense of scarcity to make buyers pay more. Now that the wealthy are willing to pay for extra space and outdoor features, developers are selling penthouses earlier – sometimes even as first-time sales.

“Developers are getting what they think is fair value for penthouses, so they no longer own them,” Miller said.

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