Manhattan housing prices continued their rise at a decent pace in the 3rd Quarter, as demand outstripped resale inventory supply. While the number of New York properties for sale was up significantly in the quarter, most of the new inventory entering the market has been for new construction projects that won’t be delivered for another year or two. Anyone who is currently in the throes of a property search will know that the number of properties available for immediate occupancy is very low. While the sales pace in the 3rd Quarter relaxed compared to last year, the market is still very competitive, with more than 50% of the properties closing at asking price or higher and over 50% of the condo deals closing in cash.
Sharp gains in NYC employment and low mortgage rates have kept the market quite tight. Now that the Federal Reserve has ended QE3 and the US economy is humming along, with over 2 million jobs having been created over the last 12 months, (topping the pre-recession peak by 927,000 jobs), we expect interest rates to rise in short order. Accordingly, locking in mortgage rates now will go a long way. We also expect continued upward pressure on prices and rents, resulting from increased demand.
While the average price per square foot of New York properties for sale for the quarter was up 7% to $1,487, this average covers all old and new condos throughout Manhattan, including the lower priced areas of Upper and Lower Manhattan. Properties at the better buildings in very prime Manhattan are selling around $2,100 per square foot. For new development, contracts are being signed at close to $2,500 per square foot, given the luxury product focus of developers.
For more detailed analysis, visit the Manhattan Market Report