The Illusion of rising prices in Manhattan
The overall average Manhattan apartment price seemingly appears to have hit a new record in the fourth quarter. A closer look, coupled with upward ticking interest rates, may tell a different story.
- At $2,110,556, the average price was 9% higher than a year ago and just above the previous record set in the first quarter of 2016.
- New development closings that were signed over one year ago played a role in the overall numbers.
- Nine of the top 10 sales in the fourth quarter were new development and sold for an average of $4,709,602.
- This was a new record, and was 51% higher than the fourth quarter of 2015.
- When we drill down to the rest of the market, the number of sales was 13% lower than a year ago, with 39% fewer new development closings and 4% fewer resales.
- The resale average price of $1,512,074 was 1% lower than a year ago, while the median price rose 2% to $920,000.
- Looking at just resales, we see a market where the average price has been drifting lower for the past few quarters.
- Resale listings spent 10% longer on the market than in the fourth quarter of 2015, and apartments are selling at the lowest selling-to-asking price ratio in more than three years.
Buyer hesitancy and seller overpricing have led to sharp rises in inventory, particularly for larger apartments, which increases the need for price adjustments for many listings.
Sellers need to pay attention to the rising inventory and interest rates when pricing.