Median, Average Condo Prices in Manhattan Go Up Further

Median, Average Condo Prices in Manhattan Go Up Further
Published: July 02, 2008

By Anuradha Kher, Online News Editor

New York--Despite dismal national trends, the real estate market in Manhattan remains strong, with the average condo price rising 36 percent from a year ago to $1,663,533, according to a second quarter market report recently released by Halstead Property. Even the median price, which is not impacted by the high-end sales, hit a new record of $979,000 during the second quarter of this year, reflecting an increase of 23 percent from a year ago.

“The tightening of credit markets does not affect the luxury market much, and that is what most of the New York condo market comprises of,” John Wollberg, director of sales, Eastside at Halstead Property, tells MHN.

While the sales figures of two high-end developments, The Plaza and 15 Central Park West, pushed up the average condo prices for Manhattan, even without, the average condo price would be $1,656,210, a figure that is 16 percent higher than a year ago.

Despite all that has happened on Wall Street, the New York real estate market remains healthy and the reasons for this are many, says Wollberg. “Children of baby boomers are now coming into New York’s luxury condo market. At the lower end, many parents are assisting children in buying homes in the city, given that the rents keep going up. In addition, there are many foreign buyers coming in as well. Apart from the British, Irish and Israelis, there is now an influx of Italian and Brazilian buyers. Of course, for global businesses, New York will always be an attractive investment destination.”

Having said that, Wollberg notes that the volume of sales is down from last year. Closings in new developments accounted for one-third of all closings in the second quarter and the average price per square foot was $1,421, a 17 percent increase from last year.

Wollberg adds, “New York has not suffered as much because of the bad credit decisions made in the last few years because we have always had rules and regulations that have not allowed for it.”

He says that across the U.S., the situation will get worse before it gets better. As for New York, Wollberg believes it will ultimately experience some issues with regards to property prices. “This is a historical look and that the third-quarter findings will be different. There will be some pressure against increases in condo prices or volume of sales or both. Whether it will be one of those or all of those, we can’t predict,” concludes Wollberg.

Other highlights from the report:

•    The Eastside boasted average sale price increases for all size categories, led by a 29 percent increase in three-bedroom units. Four-bedroom and larger units followed closely with a 26 percent increase.
•    On the Westside, all size categories posted double-digit increases in the average sale price. The most significant increase was the four-bedroom and larger units with a 69 percent increase, most likely reflecting closings at 15 Central Park West.
•    In the Downtown market, the average sale price rose 10 percent for both studios and two-bedroom residences. The only size category to decline was the three-bedroom and larger units, which dropped 5 percent to $2,920,798.
•    The median price for lofts in the Village area increased by 63 percent from the same time last year.
•    Every size category in northern Manhattan posted increases in average sale price with three-bedroom and larger units posting the largest gain, with an 86 percent increase to $1,298,446.

(Photo caption: 940 Park Avenue, a Halstead property in Manhattan)