Manhattan condominium prices continue to rise – Industry Overview
Prices continued to rise during 1998 for both pre- and post-war units in Manhattan’s condominium market, fueling optimism that the market’s ascent will continue well into 1999. So says the Real Estate Board of New York (REBNY) in its annual Condominium and Townhouse Sales Report.
REBNY Executive Vice President Deborah Beck noted that sales volume in the pre-war condominium market posted a stunning 40 percent increase over 1997’s figure, while sales in the post-war market soared 86 percent during the same period. Pre-war sales jumped from 883 transactions during 1997 to 1,232 in 1998, and post-war condominium sales climbed from 2,213 to 4,123 during the same period. Many 1997 transfers – not recorded until well into 1998 – are reflected in these spectacular gains.
Median price per square foot spiraled up as well. In the pre-war market, that figure rose 14 percent to $357 during 1998, up from $312 one year ago. The post-war market witnessed a 13 percent climb during the same period, up from $327 to $369.
Beck emphasized that the median price increase occurred despite an overall decline in the median size of apartments sold. “Typically, an increase in the proportion of smaller apartments sold brings down overall prices, because .smaller units tend to have lower prices per square foot,” she said. “But the 1998 market was so strong that prices rose anyway.”
Transactions involving smaller units shaped much of the market during 1998. In the pre-war sector, for example, the average size of apartments sold dropped from 988 to 877 square feet. Meanwhile, units of 650 square feet or less accounted for 28 percent of all sales activity in the post-war market, while registering a 19 percent average price increase.
Only one submarket felt a downward pricing effect of numerous studio sales. In the East Side pre-war market, the median price per square foot declined from $374 to $365 during the last year, thanks largely to the surge in sales of units of 650 square feet or less. In 1997, nine percent of all sales involved these units; in 1998, they accounted for 21 percent of total transfers.
In the East Side’s post-war submarket, smaller units accounted for a larger share of market sales, while posting the most significant pricing increases. Condos with 650 or less square feet jumped 22 percent in median price per square foot, while units with between 651 and 850 square feet rose 17 percent over 1997’s figure.
The West Side fared particularly well during 1998, according to Hall Wilkie, executive vice president of Brown Harris Stevens and chairman of REBNY’s Residential Research Committee. “The West Side’s pre-war and post-war condominium submarkets posted strong gains in pricing, thanks largely to significant sales traffic in premier buildings on Central Park West and Central Park South,” he said.
Commanding a sizable share of the West Side’s pre-war activity, he added, were the Essex House at 160 Central Park South, which fetched a median price of $697 per square foot for 37 sales, and the Century at 25 Central Park West, which commanded a median price per square foot of $517 for 43 sales.
Overall, pre-war market median price rose 17 percent during the year from $309 to $362 per square foot.
One Central Park West, meanwhile, with 64 sales and a median price of $893 per square foot, and One Lincoln Square, with 57 sales and a median price of $557 per square foot, helped the post-war West Side market reach the $400 per square foot mark in 1998, a 13 percent increase from 1997.
Smaller units propelled much of the activity in the Downtown market, which saw appreciable gains in both median prices and sales volume during 1998. Prices in both the pre- and post-war submarkets rose 16 percent during this period, up to $356 and $335 per square foot for pre- and post-war units respectively. Condos of between 1,001 and 1,500 square feet dominated the pre-war unit sales activity, as their median price per square foot climbed 22 percent from $318 a year ago to $387. In the post-war market, the median price for units of between 651 and 850 square feet rose 19 percent, up from $285 in 1997 to $339 per square foot during 1998.
Beck pointed out that much of the post-war condominium sales activity occurred at the Horizon at 415 East 37th Street, which had 92 sales and a median price of $359 per square foot, and the Zeckendorf Towers, where 65 units were sold for a median price of $409 per square foot.
In terms of geographic distribution, sales activity shifted only marginally. In 1997, the Downtown submarket accounted for 36 percent of the total sales volume; last year, 34 percent of the total sales activity occurred there. Similarly, the distribution of sales in the West Side submarket changed marginally, edging up from 32 percent in 1997 to 33 percent one year later. The East Side accounted for slightly more sales, up from 30 percent to 32 percent, while Northern Manhattan, where 2 percent of the sales occurred in 1997, dropped to 1 percent last year.
The Real Estate Board Annual Condominium and Townhouse Sales Report analyzes open market data and is distributed on a quarterly basis exclusively to firms participating in the Board’s Cooperative Sales Report.
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