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$10M Apartments Linger on the Market in 'Bipolar' Manhattan

By Amy Zimmer | October 1, 2014 7:35am | Updated on October 3, 2014 5:41pm
 Real estate market reports show that pricey apartments are taking longer to sell than smaller units.
Manhattan Market Reports for Third Quarter 2014
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MANHATTAN — Looking for an apartment in Manhattan priced under $1 million?

Good luck.

Though inventory saw a 5 percent upswing, the pickings for the lower end of the market — where the bulk of the buyers are looking — just got slimmer, according to a report released Wednesday by tech-focused real estate firm Urban Compass.

There was a 24 percent dip in the number of listings priced under $500,000 and a 14 percent dip in those priced between $1 million and $500,000 in the third quarter of 2014 compared to the year before, Urban Compass found.

On the flip side, apartments costing $10 million or more — while still a small fraction of the overall market — jumped 41 percent, and units ranging from $5 million to $10 million increased 21 percent.

"The market is definitely bipolar," said Sofia Song of realty firm Urban Compass.

More than 60 percent of homes priced between $1 million and $500,000, and more than 60 percent of one-bedrooms were on the market for fewer than 60 days.

Meanwhile, more than 70 percent of homes priced above $10 million and 65 percent of four-bedrooms were on the market for more than 60 days, Urban Compass found.

"The more expensive the property, and the bigger the property, the longer it will stay on the market," Song said. "The entry-level buyer just has fewer choices. You can see that studios and one-bedrooms are getting snapped up."

The overall number of sales in this year's third quarter dropped from last year, but the market saw a total of $6 billion worth of co-op and condo sales — the highest value since the 2008 peak — indicating that pricier sales dominated the market, Song noted. 

Median prices for condos rose 11 percent over the past year to $1.325 million; co-op median prices dipped slightly by 1 percent to $707,000, the report found.

With fewer "starter" apartments in the mix and more closings of high-end projects, it was the fourth consecutive quarter where median prices were higher from the year before, said Jonathan Miller, a real estate expert who authored Douglas Elliman's market report, also released Wednesday.

Miller was not surprised to see the high-end apartments staying on the market longer. Buyers in this segment now have more options.

On "Billionaire's Row," Extell's One57 on West 57th Street has more recently been joined by several other ultra-high-end developments.

"There's still interest," Miller said. "Now the investors are saying, 'I'm going to buy, but I want to see how the other buildings look.' The sense of urgency isn't there."

Developers have little choice but to charge north of $2,000 a square foot, real estate experts said, because land costs are so high in Manhattan.

"New development can't be cheap because acquisition costs are too expensive," Douglas Elliman president Dottie Herman said.

The entry-level buyer meanwhile is left in a jam, needing to pounce immediately if something good comes on the market.

"You really have to be on it.  You have to be prepared with all your paperwork in order and jump on it when something comes up," Herman said.

"You have to know what you can afford and you have to have gone to open houses, done your research on your computer at night to see what's sold in the area, to know if you've overpaid."

Oftentimes, apartments priced well in the competitive part of the "lower end" of the market will get offers after the first open house.

"To make a quick decision you have to be an educated consumer," Herman said.