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Three Cents Worth: Condos Push For Their Share

[This week (in a special Thursday edition!) our market analyst Jonathan Miller plots the price per square foot of Manhattan condos (pink) and coops (green) over the past ten years, with some market share figures on the side. Click on the image to expand.]

This week I present the quarterly average price per square foot of Manhattan co-ops and condos (adjusted for inflation) over the past 10 years. For both the first and last quarters of the time series, I inserted a pie chart illustrating the market share of co-ops and condos that sold in that particular quarter, based on the number of sales.

Not surprisingly, the average price per square foot for both co-ops and condos showed an upward trend over the decade. However, the condo market, after adjusting for inflation, slipped 2.3% since 2Q 2005, arguably the point where the housing boom ended in New York. The inflation-adjusted appreciation rate 2Q 2004 to 2Q 2005 for condos was 18.5%. Co-ops faired better since 2Q 2005, rising 6% after adjusting for inflation. This was less than the 20.6% appreciation pace for co-ops seen in the previous year (2Q 2004 to 2Q 2005). Since these are overall market numbers, they are affected by the mix of what actually sold, but they do illustrate the change we are all seeing.

At the beginning of this time-series, in 1996, 59% of the apartments sold were co-ops compared to 41% condos. By the end of the time series in 2006, condos represented 57% of the number of sales to 43% of the co-ops. In the near term, we don't expect condos to outsell co-ops every quarter, but the pace of new development is changing the housing stock. In 1996, the ratio of co-ops to condos in the housing stock (existing housing units, not number of sales) was approximately 80/20, while the 2006 ratio is about 75/25.
· Manhattan Average Price Per Square Foot [Miller Samuel]