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Low Inventory, High Sales Define Manhattan Market In 2013

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Market reports throughout 2013 highlighted record low inventory and a high volume of sales, so it comes as no surprise that Manhattan saw the second highest sales total in 25 years and the lowest inventory in 14 years. The Elliman report found that condo and co-op sales jumped 21.2 percent from 2012 levels to reach 12,735, coming in second only to peak 2007 levels. Report preparer and appraiser Jonathan Miller notes that in the four years prior, the number of sales hovered around 10,000. "Looking back, 2013 will probably turn out to be an anomaly as sales surged last year from a release in pent-up demand over the preceding three years. Mortgage rates were sliding as the economy remained weak," explains Miller. "But after the expiration of the fiscal cliff, there was concern that mortgage rates would rise as the economy improved, and so would prices. So many fence sitters that accumulated over the past several years entered the market."

[Charts via Elliman]

Inventory dropped to its lowest levels in 14 years, but Miller notes that if sales had not been so strong, inventory would have trended higher. "I think we are bottoming in inventory and may see a modest rise in supply in 2014, in addition to more new development," says Miller. "Think a little more dull and boring for 2014." As for prices, the median rose just over 2 percent from 2012 levels to $855,000. Average prices rose slightly less than 2 percent to $1,443,753.

The townhouse market kept on trend with co-ops and condos, but townhouses also sold at the fastest pace in 17 years. This resulted from a high number of sales—326, up 17.7 percent from 2012 levels—and declining inventory, which fell 16.5 percent. On average, Manhattan townhouses sit on the market for 103 days before finding buyers. Miller predicts that the market will continue at a brisk pace throughout 2014.

The median townhouse price rose just 2.6 percent to $3,591,250, but an increase in sales uptown pulled the overall numbers lower. "The tepid overall numbers for the townhouse market was largely due to a surge in market share of 3-5 family sales and sales in northern Manhattan," says Miller. Average prices dropped more than 8 percent to $4,828,445. Prices for luxury townhouses remained pretty consistent (median is $15.5M), but looking at the numbers for the past decade show that prices for luxury homes have risen nearly 70 percent, more than twice 33 percent rise for the overall townhouse market.
· 2004 - 2013 Manhattan Decade Report [Elliman]
· 2004 - 2013 Manhattan Townhouse Report [Elliman]
· All Market Reports coverage [Curbed]