Manhattan Real Estate Values Climb as Inventory Falls
Sales figures for July show that median prices on New York City apartments are up and inventory is down. And with the median sale price at $900,000, there doesn't seem to be a lack of money to spend on real estate. That contrasts with the national numbers for July, which show existing home sales fell 27 percent and new home sales fell 12.4 percent in July.
No one would argue that Manhattan's real estate market is not like the rest of the nation's. But experts are still asking: Can Manhattanites sustain this uptick in sales?
While no one expects too many sales in the $44 million range -- that was the selling price for a townhouse at 1009 Fifth Avenue purchased by Mexican billionaire Carlos Slim -- some question whether people will be willing to plunk down a mere $1 million for a two bedroom-one bath in Manhattan.
Wall Street may be in recovery mode, and hefty bonuses are again a reality, but not everyone is ready to party like it is 2007.
Manhattan real estate agent Dolly Lenz, a broker at Prudential Douglas Elliman, told The Wall Street Journal that she has noticed a little more hesitation among buyers whom she works with. "There is a lack of confidence and a lack of direction," she said. "There is no rush to buy, and people are gambling that prices are going down."
While the unemployment rate in New York City, at 9.4 percent, is a little below the national average of 9.5 percent, the same economic uncertainly that plagues people across the country also lurks in the back of the minds of New Yorkers.
But the numbers are pointing in the right direction.
A study by the Vanderbuilt Appraisal Co. contrasts Manhattan apartment inventory a year ago to today. Last summer, it would have taken 20 months to sell the available properties. Now, that number is down to 9.9 months. Nationally, housing inventory is at 12.5 months. And a study by real estate firm Brown Harris Stevens reports that Manhattan co-op and condominium closings rose 81 percent in the second quarter of 2010, compared to a year ago, the highest level since the third quarter of 2008.
apartments are selling for much less. Sharon Baum, a broker with Corcoran Realty, told the Journalthat a one-bedroom apartment on Park Avenue South was put on the market for just under $1 million and had 14 offers within a week.
"When apartments are priced right at all price points they will sell in a week," she said.
Ask Mike Love, one of the founding members of the Beach Boys. His Upper East Side three-bedroom condominium was on the market at the end of 2009 for $2.35 million. It finally sold earlier this summer -- fully furnished -- for $1.6 million.
Another factor that keeps Manhattan real estate on a more even keel than the rest of the nation is its ties to foreign markets, points out Jonathan Miller, CEO of the real estate appraisal firm Miller Samuels. "That sets us apart from the rest of the country," he told the New York Daily News.
One more indication that Manhattan real estate remains in demand: rental prices continue to go up, as well. The Real Estate Group NY's August Manhattan Rental Market Report says that rental prices are up 4.64 percent over August 2009. Inventories are tight, and vacancies are almost flat.
As long as New York City's unemployment rate continues to go down, Manhattan real estate will continue to rise in value.
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