MANHATTAN — House hunters should brace themselves for sticker shock — Manhattan real estate prices have hit a jaw-dropping average of $1,363 per square foot, according to a Douglas Elliman report released Tuesday.
With buyers competing for slim pickings in the first quarter of the year, sellers had the upper hand, pushing prices upward and often forcing speedy sales.
The average sales price of Manhattan apartments spiked more than 30 percent over the past year to $1.774 million, the report said.
Median sales prices — which represent the midpoint of the market — set records for both co-ops (up 17 percent from the year before to $760,000) and condos (up 13 percent to $1.355 million), the Elliman report found.
“This is the highest price per foot in the 25 years I’ve been tracking the market,” said real estate expert Jonathan Miller, who authored the report.
“A big part of that is because we’ve had three years of declining inventory,” and though he said inventory is now “leveling off," the “chronic shortage is impacting pricing.”
Another factor pushing up prices was the rise of new developments, which represented roughly 16 percent of all sales in the first quarter, Miller explained.
The price for them reached $1,843 price per square foot, up nearly 38 percent from the year before, the Elliman report found.
“New development is skewing the overall metrics higher,” Miller said.
Sales in new high-end buildings like 737 Park Ave., for instance, helped boost the average apartment prices on the Upper East Side, according to a market report from Brown Harris Stevens, which found large East Side apartments — three-bedroom and up — averaged $6.23 million, up 57 percent from the previous year.
Still, across the board, Manhattan buyers are facing a challenging market in terms of their options and how long they can take to make decisions.
Though Miller’s report shows inventory remained flat from the year before, a report from the real estate search site Streeteasy found that inventory in the first quarter fell 13 percent from a year ago, marking its lowest level since the fourth quarter of 2007.
Homes remained on the market for an average of 89 days, the report found, which was the lowest average recorded since the site began tracking the data nearly 10 years ago.
“What we’re seeing is a discouraging trifecta for Manhattan buyers: higher prices, drastically lower inventory and higher interest rates, which is keeping some potential buyers out of the market,” StreetEasy data scientist Alan Lightfeldt said in a statement.
“We don’t expect these double-digit price increases to last much longer before sellers are unable to find willing and able buyers."
But he cautioned buyers, who will be looking in the busy spring season, to be prepared for a challenging road.
“You’ll need to act fast,” he said.
Miller also said the big price hikes were not “sustainable,” but he didn’t expect the market to dip as inventory will continue to remain tight.
“I think this was more of a jump to a plateau,” Miller said. “We’ve reset the bar in terms of pricing.”