In a quarter that saw a rout in global stocks, commodities and major currencies, at least one investment stayed hot: Manhattan apartments.
Sales of condominiums and co-ops in the borough jumped 9.8% in the third quarter, the first annual increase in a year, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman. The average price per square foot hit a record $1,497, while the median price paid climbed 9.9% from the same time in 2014, to $998,000.
Manhattan real estate buyers are facing a shortage of inventory, particularly for homes priced at less than $1 million. That’s propping up prices, fueling competition and increasing the number of commitments made entirely in cash. Apartments that sold in the third quarter spent an average of 73 days on the market, the shortest time in Miller Samuel data dating to 1996.
"When you have inventory unable to keep up with demand, you're going to have more bidding wars," Jonathan Miller, president of Miller Samuel, said in an interview. "We have a tight housing market and it should be no surprise that we're going to see prices at or near records each quarter."
At the highest end of the market, which includes trophy co-ops on the Upper East Side and the luxury condos that have been the hallmark of almost all new developments, prices increased 10% to a median of $5.5 million.
Market Turmoil
The data are based on completed sales, which means that prices and terms of those deals were largely agreed to in June and July, before China's currency devaluation in August roiled global markets and accelerated stock selling. The Standard & Poor's 500 Index fell 6.9% in the quarter, the worst decline in four years, and traders are scaling back forecasts for a Federal Reserve interest-rate increase by year-end.
Whether broader turmoil dims overseas interest in Manhattan real estate can't yet be measured, and it may ultimately bolster demand as buyers seek safe-haven investments. On New York property-listing website StreetEasy, page views originating from China more than doubled in July from a year earlier, according to Alan Lightfeldt, a data scientist with the site. That was the same month that China's security regulator banned major shareholders from selling stakes in listed companies for half a year.
Manhattan real estate "isn't a stock market, where China and the Federal Reserve spook investors and you see this big rapid decline," said Gregory Heym, chief economist for Terra Holdings, which owns brokerages Halstead Property and Brown Harris Stevens.
"Until supply changes I don't see much of a change in the market," Heym said. "I can't imagine the average buyer would see an effect."
More Records
A Brown Harris and Halstead report Thursday showed that Manhattan’s median price jumped 11% from a year earlier to $995,000, a record in the companies' data. Other brokerages also reported rising values fueled by unmet buyer demand.
Compass, an online real estate startup, reported a record Manhattan median price of $1.04 million, with downtown homes reaching a new high of $1.4 million. The borough-wide inventory of apartments for sale fell to the lowest level recorded since 2006, after declining 20% to 6,366 units, Compass said.
Corcoran Group said sales in new developments surged 69% to 558, while the median price of those deals climbed 27% to $2.03 million. The price of co-ops on the resale market jumped 11% to a median of $780,000.
In Upper Manhattan neighborhoods including Harlem, which traditionally have the borough's least-expensive listings, the median sale price jumped 15% from a year earlier to $531,000, according to Corcoran.
The median price in the Financial District and Battery Park City climbed 36% to $1.46 million, a rise that corresponded with a surge of completed deals in new developments, the brokerage said.
Stretched Limits
The tight supply has forced buyers to stretch the limits of what they’re willing to pay. Fifty-four percent of all sales in the quarter were at or above their list price, the highest in seven years of record-keeping, Miller Samuel and Douglas Elliman said. The average premium paid was 8.2%.
For Emily Weiss, bidding above the asking price helped her secure a one-bedroom co-op in the Gramercy neighborhood after several months of looking. With a budget of about $700,000, Weiss began her search in April and almost gave up in frustration.
New listings she found online and sent to her broker, Paul Zweben of Douglas Elliman, were snapped up within days. She attended open houses where the sellers never bothered to make the bed or pick up dirty laundry from the floor. One property she saw listed at the mid-$700,000 level sparked a bidding war that pushed it well above her budget before she could make an offer.
"I learned not to get attached to an apartment because in my eyes it really is a seller's market," said Weiss, 31, a physical therapist.
Her last attempt was for a 750-square-foot co-op off Second Avenue listed in August for $665,000. After initially offering the asking price, Weiss raised her bid the next day to beat out several other would-be buyers. She and her mother co-signed a contract weeks later. The deal, subject to co-op board approval, is likely to be completed this month.
"I personally don't see New York City real estate going down anytime soon," Weiss said. "Now, I do hope it goes up. Because I want to be on the other end."
