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Asking Prices for New Apartments Jump 12.4 Percent, Report Says

By Amy Zimmer | April 17, 2012 7:15am
An image of a four-bedroom apartment at the Azure.
An image of a four-bedroom apartment at the Azure.
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MANHATTAN — Asking prices for new Manhattan apartments jumped 12.4 percent to an average $1.46 million in the past year, according to StreetEasy's monthly report released Monday.

The demand is growing for new buildings like the Village's 130 W. 12th St., Harlem's 88 Morningside and the Upper West Side's Aldyn.  The amount of contracts signed shot up nearly 25 percent compared to a year ago, according to Streeteasy. 

Meanwhile, supply is shrinking. Overall inventory fell by 8 percent over the past year.

"Asking prices are climbing," said Streeteasy's Vice President of Research Sofia Song. "That's definitely an indication of the confidence of developers. Their confidence has grown."

There are fewer price cuts, too. The report, which tracked the market from March 2011 to March 2012, showed that the number of price cuts declined by nearly 23 percent.

"Starter apartments" continued to see the most action in terms of contracts, Song said. At the beginning of the year, one-bedrooms were hot. In March this year, two-bedrooms were all the rage, she said, which was a contrast to the spree of sprawling apartments over the last two years.

"This year, it's all about starter apartments," Song said, noting how high rents have been pushing many New Yorkers into buying. For those who will be staying put for the next five years, they're seizing on the low mortgage rates, she noted.

The Upper East Side's luxury 34-story Azure, at 333 East 91st St., saw its smallest line of two bedrooms that had sat idle in 2011 suddenly get "touched by a magic wand," this year, said Doug MacLaury, senior vice president of the Mattone Group, the project's co-developer.

The line of these 1,100 square foot units — which cost roughly $1.2 million — sold out to the 20th floor this year, he said, noting that it's mostly "young families, who want new construction and see the value of the Second Avenue Subway coming along," he said of the new line expected to be completed in December 2015.

More than 50 percent of the Azure's 128 units, with their floor to ceiling windows, were sold as of last week, MacLaury noted. The building's three-bedrooms have been selling well, too, he said, as doctors being recruited to nearby hospitals like Mount Sinai and Memorial Sloan-Kettering — who get relocation subsidies from the hospitals — have been moving in with their families.

Like other new developments, the Azure has seen recent price increases. A four-bedroom, for instance, saw its listing price jump nearly $260,000 to $4.795 million five weeks ago, according to StreetEasy. Another unit saw a price hike of $250,000 to $4.645 million two weeks ago, the site showed.

Across the East River, in Brooklyn, contracts increased by 37 percent compared to a year ago and inventory declined by 8 percent, according to StreetEasy. Queens also saw price listings shoot up, by 22 percent. However, the borough's inventory of new developments also increased by nearly 36 percent from a year ago.

"Brooklyn neighborhoods have more cachet than Queens," Song said. "Long Island City and Astoria were coming along, but they weren't able to compete with new developments in Williamsburg and Dumbo."