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Manhattan Home Prices Reach Record $1.87M Average

By Amy Zimmer | July 1, 2015 7:22am | Updated on July 3, 2015 9:43pm
 This 1,131-square-foot two-bedroom, two-bath condo at 353 E. 104th St. in East Harlem is listed by Compass for $899,000. Prices in Upper Manhattan, which have historically been lower than the rest of the island, hit record highs in the second quarter of 2015, as prices across the board have jumped.
This 1,131-square-foot two-bedroom, two-bath condo at 353 E. 104th St. in East Harlem is listed by Compass for $899,000. Prices in Upper Manhattan, which have historically been lower than the rest of the island, hit record highs in the second quarter of 2015, as prices across the board have jumped.
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Compass

MANHATTAN — Just when you thought Manhattan home prices couldn't climb any higher, think again.

The second quarter of 2015 was full of new records, real estate firms found.

The average sales price set a new high of $1.872 million, up more than 11 percent from the year before, according to a Douglas Elliman report released Wednesday.

Average sales for condos ($2.415 million) and co-ops ($1.538 million) hit records, rising 20 percent and 5.8 percent respectively, the report found.

And it's not because the $50 million sale prices on new developments, where rates also hit a record high at $2,011 a square foot, are skewing prices, said real estate expert Jonathan Miller, who authored the Elliman report.

"If you look across the market, especially at the co-op market which is not chock full of new development, there were new records set," Miller said.

The median price — or midpoint of the market — for co-ops jumped nearly 10 percent over the past year to a record $795,000, according to the report.

Inventory levels remain low while the economy is improving and because of the competition — especially at the lower end of the market — many are willing to pay more than the asking price.

More than half of the listings in the second quarter went for at or above the asking price, which is the highest share since the financial crisis, Miller said.

The "micro-segmentation" of the market has never been starker, said Wendy Maitland, TOWN Residential's president of sales, noting that trends are "emerging by price point, building design and type, new development/resale, and even within slices of neighborhoods and on specific blocks."

The Upper East Side, for example, regained the lead of the three-plus bedroom market with a median price of $4.725 million, while Downtown continued to command the highest median for studios through two-bedrooms, from $650,000 to $1.824 million, TOWN's report found.

The rising prices pushed up the median price in Upper Manhattan, which reached a new high of $583,000, up 8 percent from the previous year, according to a report from Compass.

Homes priced under $3 million will continue to fuel a seller's market, while the pricier homes "could become a buyers' market for the first time in years," said Mike Bennie, head of data for Compass.

The firm found the number of listings below $500,000 fell to their lowest share ever, comprising just 11 percent of the market (down 4 percent from the year before). Homes in the $500,000 to $1 million range, which comprised 25 percent of the market, fell 2.6 percent from the year before.

Meanwhile, the market is growing more "top heavy" with the number of pricey three- and four-bedrooms on the market, increasing nearly 19 and 22 percent, respectively.

These larger units, Bennie noted, are staying on the market longer than the lower priced units.

Homes costing between $500,000 to $1 million, for instance, tend to be snatched up within 35 days, while homes priced between $5 million to $10 million linger for nearly 90 days.

With demand driving up prices at the market's lower end, it's no surprise that the city is making affordable housing a main focus, Miller said.

"You have three or four or five people competing for one unit" said Miller, who believes a coming exodus to the suburbs is not out of the question.

"Everybody wrote off the suburbs years ago," he said. "Yes, lifestyle is certainly a factor [in families wanting to remain in the city]. But I think the bigger factor is your wallet."