The third quarter of 2013 ended with more of the same for Manhattan's residential market: low inventory and increasing sales. Jonathan Miller, appraiser and Elliman Report preparer, says inventory hit the lowest level in the 13-plus years that he's been keeping track, decreasing by nearly 22 percent to 4,567 listings. Corcoran's report echoed these numbers, putting the decrease at 20 percent. Miller notes that "inventory has not recovered yet because sales are rising faster than supply is entering the market." The number of sales reached 3,837, the second highest level in 24 years?the highest since 2007?a 30 percent increase from the same period last year. According to the Corcoran report, the last time a quarter saw more closings, inventory was 73 precent higher, which highlights the intense state of the current market. And to top it off, prices edged ever higher.
Miller notes that the third quarter got a boost from buyers overcoming their fear of the fiscal cliff. "Sales have benefited from a release of pent-up demand after the fiscal cliff didn't signify the end of the word, and more recently as fence sitters, worried about rising [mortgages] rates and prices, moved into the market." But the surge in sales likely won't be sustained for long as inventory will remain low, because, according to Miller, "many [would-be buyers] have low or negative equity and can't trade up or make a lateral move so they won't list." For what little inventory there is, the absorption rate reached a record speed of 3.6 months, meaning that the pace of the market is remarkably fast. This contributed to 44.2 percent of units selling at or above their asking prices?up from 12.8 percent during the same period last year.
Year-to-date, prices inched higher?Miller put the median sale price at $872,000?but overall, he found the average and median prices to decrease because of a shift to more sales of smaller and lower-priced units. The number of one-bedroom sales reached a 15-year high, accounting for more than 40 percent of the market share.
Other reports, however, found prices to rise. Brown Harris Stevens calculate an 8 percent increase in average sale price from Q3 2012 to $1,451,621, plus the brokerage, known for its luxury listings, found sales over $10 million to jump by a whopping 75 percent. Corcoran also found the average sale price to rise, putting the increase slightly higher than BHS at 11 percent, or $1.487 million.
· Elliman Report - Q3, Manhattan Sales [Elliman]
· Market Reports [BHS]
· Q3 Corcoran Manhattan Report [Corcoran]
· All Quarterly Market Report coverage [Curbed]