In demand: Listings for luxury apartments, the top 10% of all sales by price, didn't decline as sharply as the broader market as owners were inspired to try their luck after record prices paid for co-ops and condos in 2012. - PHOTO: BLOOMBERG
[NEW YORK] Manhattan apartment prices climbed in the first quarter as buyers competed for properties amid the biggest inventory decline in more than a decade.
The median price of all co-ops and condominiums that changed hands in the three months through March 31 rose 5.9 per cent from a year earlier to US$820,555, appraiser Miller Samuel Inc and brokerage Douglas Elliman Real Estate said in a report on Monday.
Purchases rose 6.3 per cent to 2,457, even as the number of properties on the market plunged 34 per cent, the most in more than 12 years of record keeping.
"The defining characteristic of the housing market is a lack of supply and that's why we're seeing upward pressure on prices," Jonathan Miller, president of New York-based Miller Samuel, said in an interview.
Prospective buyers, spurred by record-low interest rates and apartment rents that are poised to surpass their 2006 peak, are finding little to choose from. Owners are in no rush to list their homes in a market where prices have remained relatively flat for three years, according to Mr Miller.
Those who bought during Manhattan's market peak and saw their values drop in the slump may not have built up enough equity to sell, he said. The supply of newly constructed units is also thin, after builders halted projects following the credit crisis. In Q1, 17 per cent of all deals were at or higher than the asking price, Mr Miller said.
Other reports issued on Tuesday on the Manhattan sales market showed a decrease in the median price because of a decline in super- luxury sales, following a frenzy to offload property in Q4 before an expected capital-gains tax increase this year.
Sales for more than US$10 million declined 47 per cent to just nine deals, said Gregory Heym, chief economist at Terra Holdings LLC, owner of brokerage Brown Harris Stevens.
"It's a hangover from the fourth quarter, with the tax law changes that were coming," he said. "It's a mistake to look at this and assume that prices are declining or stagnant, because that's not what's going on in the market right now."
StreetEasy.com, a property-listings website, reported a 27 per cent jump in the number of listings where sellers increased their initial asking price.
Buyers signed more than 3,000 purchase contracts in the first three months of the year, the highest of any Q1 since 2008, when StreetEasy began tracking the data, said Sofia Song, vice-president of research.
This "is the year of the frustrated buyer", Ms Song said. "You have all this pent-up demand, people who have been holding back, watching the market, watching our site, ready to pounce."
A separate report from the Corcoran Group said inventory slid 26 per cent in Q1 from a year earlier to 6,225 homes. It was the eighth straight year-over-year decline.
On the Upper West side, the median price of condo resales climbed 20 per cent to US$1.26 million, while co-op resale prices rose 4 per cent to US$730,000, Corcoran said.
Prices declined on the Upper East Side, with the median for previously owned condos falling 3 per cent from a year earlier to US$975,000, Corcoran said. Co-op prices dropped 17 per cent to US$726,000, as lower- priced studios and one-bedrooms made up more than half of all sales, according to Corcoran.
"Since the East Side is home to so many luxury co-ops, it saw a significant effect from the decline in high- end sales in the first quarter," Brown Harris said in its report.
Listings for luxury apartments, the top 10 per cent of all sales by price, didn't decline as sharply as the broader market as owners were inspired to try their luck after record prices paid for co-ops and condos in 2012, Mr Miller said. Luxury listings fell 15 per cent to 1,025, Miller Samuel and Douglas Elliman said, while the median price of completed deals fell 2.7 per cent to US$4.02 million.
Steven A Cohen, the billionaire founder of SAC Capital Advisors LP, is seeking to sell his 930-square-metre duplex at One Beacon Court for US$115 million, two people familiar with the matter said last week.
A triplex penthouse at the Pierre hotel that belonged to Martin Zweig, who predicted the 1987 stock market crash, is also on the market, for US$125 million, the New York Times reported on March 29.
In new developments, the inventory of apartments fell 42 per cent in Q1 from a year earlier, Miller Samuel and Douglas Elliman said. The median sale price climbed 36 per cent to US$1.33 million.
Dottie Herman, president and chief executive officer of Douglas Elliman, was interested in purchasing a two-bedroom condo at Extell Development Co's Helmsley Carlton House, which began showing units to prospective buyers on March 28. Ms Herman arrived two days later to have a look.
"They were gone," she said of the two-bedroom units, most of which were listed for US$4 million to US$4.5 million and have two full baths and views of Madison Avenue.
"The best time to buy was last year," Ms Herman said of the Manhattan apartment market. "But at this point, if you're seriously looking to buy something, people know it's not going to get cheaper."
- Bloomberg
