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Three Cents Worth: Luxury Speaks Volumes About Condos

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[Our graph guru Jonathan Miller is done making report cards, and he's back to his real job: blowing the minds of the Curbed readership. The topic this time around: the condo/luxury market connection.]

[Click to expand.]

Over the past five years, it's no secret that condos steadily gained in market share over co-ops in Manhattan. It's not that fewer co-ops were being sold over the same period, but that more condos were sold. The rising impact of new development clearly favored condos (all things being equal, they are worth almost 10% more for developers to maximize their project).

One of the bright spots in the shifting Manhattan market during this U.S. housing downtown has been the strength of the luxury market. The luxury market here is defined as the highest 10% of all sales, whether it be co-ops or condos. The low end of the top 10% this quarter was $3M.

The chart shows how the luxury volume has mushroomed over the past two years as condo market share has increased. The correlation is striking.

I would think the credit crunch and the 421a tax abatement expiration will limit the scope of new development (i.e. condos) over the next two years, perhaps bringing more parity to co-ops in terms of market share.
· Manhattan Luxury Volume v. Co-op/Condo Market Share [Miller Samuel]