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Prices Remain High, But Do Not Rise In Manhattan

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If the first quarter market reports are any indication, this year will be a lot different than last. The start of 2014 was characterized by record-setting prices (as was the end), but the start of 2015 is seeing the market "reset," as appraiser and Elliman report preparer Jonathan Miller puts it. Prices stabilized, with the median price—Miller's preferred metric because it eliminates outliers that up the average—remaining unchanged from a year ago. It's holding steady at $970,000, which is still the 5th highest it has been in 25 years, so it can be considered a "some sort of high plateau."

Quarterly reports from all of the brokerages showed mixed indicators, but three other reports all put the median in the same ballpark (Compass, $900,000; Corcoran, $955,000; Town, $986,000). The average price and the price per square foot both dipped. Miller put the average at $1,732,989, down 2.3 percent, while the price per square foot dropped more than 7 percent to $1,263. "One of the reasons that average and price per square foot went more negative than median was the lack of super luxury closings," explains Miller. "A year ago, there were 60 closings greater than or equalling $10 million, and this quarter there were 34."

Of those that did close, there several huge records: the $100M sale at One57 became the most expensive apartment to ever sell in New York, and the record for the most expensive co-op was broken yet again.

Even so, the average price in the luxury category fell more than 10 percent, but Miller notes that since so many of these units are in new developments, closings can be "generally random since they rely on the building being completed." Donna Olshan, whose eponymous firm tracks sales over $4 million, told the Journal that the price drop is a "timing issue," and noted that more than 500 new apartments are currently in contract waiting to close.

Inventory still hasn't risen much since bottoming out at the end of 2013—it's still 26 percent below the decade average—and much of the gain was new development, which has a higher price point ($1,857 per square foot for Q1) than resales. The Compass report notes that the bulk of the available inventory (62.5 percent) was listed in previous quarters, so not that many new listings actually came during the start of 2015.

The number of sales fell significantly across all categories, dropping 19.5 percent overall, but Miller says that this is a "more sustainable level." The last two years "were characterized by record setting sales as the market tried to absorb all the pent-up demand from Lehman to the fiscal cliff at the end of 2012," he says. "I believe the excess demand was absorbed by mid-2014, and the market is resetting to a more sustainable pace."
· Manhattan Q1 Market Report [Elliman]
· Market Reports [Compass]
· Manhattan Q1 Report [Corcoran]
· Manhattan's Mixed Residential Market [WSJ]
· 1st Quarter 2015 [Town]
· All Market Reports coverage [Curbed]