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As Manhattan Prices Keep Climbing, Inventory Plummets

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If you're thinking about buying in Manhattan, it might be time to think again—or at least time to put on your war paint. The Elliman Report for Q3 Sales in Manhattan has arrived, and it paints a bleak portrait of what to expect ahead. Of course, expense is a given. According to the report, median sales prices have reached a new high since the recession, coming in just shy of a million dollars at $998,000—a whole ten percent higher than in Q3 last year. While rising prices are pesky, they're a sign of a New York City economy on the mend: people are moving to the city to fill the growing number of jobs becoming available, which is putting pressure on housing inventory. It doesn't help, either, that new housing stock has flatlined since the beginning of the year. Don't call the Manhattan house hunt the Hunger Games just yet, but because of the lack of inventory, people are getting a little more aggressive with their tactics for sinking new pads.

One of the tactics people are using to get ahead is buying with all cash (read: without financing.) Slightly more than half—51 percent, up from 43 percent last year—of Manhattan buyers are nabbing apartments this way. On top of that, a record 53.9-percent of properties were nabbed at or above their listing price at time of contract. Apartments are flying off the market at record speeds, too. Manhattan listings were scooped up after an average of just 73 days, which is 19 days less than this time last year.

Despite all the hubbub, the turnover in the market isn't setting records, but according to Elliman reports compiler and Curbed contributor Jonathan Miller, it's "unusually fast." To borrow an analogy from the data wiz himself, Manhattan's housing inventory is like a grocery store, and these days it only takes 4.6 months for the store to completely refresh its inventory—even, for instance, the not entirely palatable turkey jerky. For the past decade, it's taken nearly twice as long. Business is good.

Reports released by other firms corroborate the housing crunch. According to data compiled by Compass, available inventory hit the lowest record level in 10 years. Just 6,366 properties were up for grabs in Q3 compared with 9,381 in Q2 and 7,959 this time last year. As prices rose and inventory dropped, Compass saw new records set in two neighborhoods: Downtown (a given) at the median price of $1.4 million, and the Upper West Side (not a given) at $1.2 million.

Corcoran also noted the downturn in inventory, and singled out co-ops as the main driver of the decrease. According to Corcoran, resale co-op listings were down a whopping 26-percent from this time last year. Resale condos—Miller says that resale makes up about 86.5 percent of all sales—were down five percent.

Here's the TL;DR version: the median price of Manhattan properties is teetering around the $1 million threshold, the highest since 2008. More jobs in the city means more people, more people means less properties up for grabs, less properties up for grabs means more aggressive maneuvers to purchase said properties like paying without financing and paying at or above list price. Does this show any signs of slowing down? Nope.
· Elliman Report [official]
· Compass Report [official]
· Corcoran Report [official]
· Market Reports archives [Curbed]