Manhattan home prices surged to a record in the fourth quarter, propelled by closings of luxury deals in new developments that were agreed to years ago, when construction was just starting on many of the buildings.
The median price of all completed co-op and condominium purchases in the borough jumped 17 percent from a year earlier to $1.15 million, the highest in 27 years of record-keeping, according to a report Tuesday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. That tops the previous peak of $1.03 million, set in the second quarter of 2008, before the collapse of Lehman Brothers Holdings Inc. triggered a plunge in property prices and a near standstill in sales.
The final three months of 2015 saw the recording of deals that were signed based on construction plans going as far back as three years ago, when developers focused on building large and lavish units in an appeal to wealthy investors who weren’t reliant on credit. Now, with those projects completed, buyers have been taking ownership of their apartments.
“This represents just how robust and, for lack of a better word, insane the sales market was circa 2013 and 2014,” Jonathan Miller, president of Miller Samuel, said in an interview. “That strong demand was somewhat off the books -- it wasn’t yet recorded.”
The number of newly built units that changed hands in the fourth quarter more than doubled from a year earlier, to 552, according to the report.
Witkoff, Rudin
Completed deals included purchases at Witkoff Group’s 150 Charles St. in Greenwich Village, where buyers committed to all 91 apartments in just 12 weeks in 2013, and Rudin Management Co.’s Greenwich Lane, which started sales later that year. At Greenwich Lane, the deals that closed at the end of 2015 ranged from $3.85 million for a 1,092-square-foot (101-square-meter) condo, to $25.5 million for a penthouse, according to listings website StreetEasy.com.
“What’s driving the overall price trend is not a handful of $100 million sales that are skewing everything,” Miller said. “It’s really more about a fairly heavy transaction volume at the upper end of the market.”
Three other reports issued Tuesday on Manhattan home sales all cited record median prices and a heavy volume of closings at new ultra-luxury developments. Corcoran Group said prices climbed 16 percent to a median of $1.1 million. That was the highest in more than two decades of record-keeping by the brokerage, Chief Executive Officer Pamela Liebman said in an interview.
New Developments
A joint report by Brown Harris Stevens and Halstead Property showed that new-development sales accounted for 26 percent of all transactions in the quarter. Startup brokerage Compass reported price records for the Upper West Side, Downtown and in both the east and west sections of Midtown, as well as a Manhattan-wide high-water mark of $1.24 million.
Properties priced at more than $3 million accounted for 24 percent of all available listings in the quarter, Compass said. Homes priced higher than $10 million took longer to sell than a year earlier, suggesting the market has become “top-heavy,” according to the brokerage.
An analysis by StreetEasy last month showed resale prices for Manhattan’s most expensive homes have been declining since February as high-end inventory piles up. While StreetEasy’s price index doesn’t include new developments, the firm cited an 8.9 percent jump in the number of all types of homes for sale at the top fifth of the market. For the other four levels combined, listings declined more than 3 percent.
With all the new high-end development, luxury buyers now have more options so there’s “less urgency to buy this very minute,” said Liebman of Corcoran.
‘Being Selective’
“We’re seeing them taking their time and really being selective as to where they’re willing to put this enormous amount of money,” she said. “There’s a lot of competition and it will be harder to push prices this year than it has for the past several years.”
Buyers seeking previously owned apartments in the fourth quarter found a limited supply of choices, helping to push the resale median to $960,000, according to Miller Samuel and Douglas Elliman. While that’s up 8.1 percent from a year earlier, it still hasn’t topped the $975,000 record for resales, set in 2008.
On the Upper West Side, where the number of sales increased 31 percent from a year earlier, the median price of a previously owned condo jumped 24 percent to $1.63 million, according to Corcoran Group. Co-ops resold for a median of $852,000, or 4 percent more than a year ago.
Downtown, the area below 34th Street excluding the Financial District and Battery Park City, the resale median for condos climbed 12 percent to $2 million, Corcoran Group said. For co-op resales, the median was $810,000, up 8 percent.