Big price tags suit the Big Apple. Real estate investors, take note! Manhattan apartment prices have climbed steadily every year since 2011. In the past decade the average price of residential real estate has increased by over 90 percent. Just a year ago, during the first quarter of 2016, Manhattan co-op or condo average prices climbed by 18 percent from 2015; and before 2017 real estate prices hit a record high, going past the $2 million mark. Prices were pushed upward by an uptick of sales of condos mostly valued over $10 million each, due to the opening of a new 96-story residential skyscraper–one of the tallest in the US–at 432 Park Avenue, overlooking Central Park. On top of this, there was also an increase in the number of new developments. Existing units with appreciating prices also served to lift the market.
Yes, the median sale prices for Big Apple apartments dropped over three percent during the first quarter of 2017; but this only served to make way for a surge in good acquisition prospects. With the prospect of rising mortgage rates and new listings soon to be added due to new developments underway–in fact, average sale price of new condos in new developments gained ground in January 2017, while overall sales prices remained flat–sellers started relaxing more, pricing more realistically, and as such resales eventually went for slightly lower. The number of interested parties willing to pay over asking price remained understandably at record lows; though balanced by pent-up buyer demand left over from those that held off real estate purchases in 2016. The average discount offered versus asking price went up an average of almost two percent considering for every type of available residential property in Manhattan: co-ops, condos, MFUs, new developments, luxury homes.
By the time the second quarter of 2017 rolled around, Manhattan real estate prices showed a solidness and resilience–which surprised many experts that expected a slowdown or a more modest growth this year–and again reached a new all-time high. Total number of sales in the borough trended up 15 percent compared the market the same time the year before. Manhattan apartments did sit on the market for longer, but sales continue to be brisk, and inventory is not rising as fast as many feared. Despite indicators that pointed to a more lukewarm market, Manhattan apartment prices continue to climb and break previous records. Acquisitions of prudently priced Manhattan co-ops, condos and townhouses–$1 to $3 million–make up the bulk of residential real estate sales in the area, at almost 50 percent. This is good news for investors looking for MFUs in the borough. If anything, cooling off is happening at the higher end of the market–luxury apartments, upper class condos and the like–as aspirational asking prices continue to drop. It is in this corner of the market that discounts seem to be growing the most.
Overall, Manhattan residential real estate is on the up and up. Manhattan apartments are reaching record prices, bidding is healthy, sales are high, and resale inventory is thinning. Those looking to expand their radius can also cross the bridge and check out Brooklyn, as its new development residential sales rival the strength of the markets in Manhattan’s Harlem and Downtown areas.
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