Despite a mixed economic climate, the Manhattan co-op market has been characterized by rising prices over the past year. We can thank mortgage rates at historical lows and tight supply of apartments available for sale for the bigger bite out of our wallets. From 5th floor studio walk-ups in Greenwich Village to rambling pre-war Fifth Avenue apartments overlooking Central Park, all segments of the market have been affected.
According to the Manhattan Market Overview that I author, there were significant increases in the average sales prices in all co-op size categories over the past year: studios averaged $285,766, up 18.1%; 1-bedrooms averaged $478,245, up 15.3%; 2-bedrooms averaged $1,092,358, up 20.9%; 3-bedrooms averaged $2,668,386, up 18.7%; 4 or more bedrooms averaged $6,870,603, up 38.8%. There were more than 1.2 billion dollars worth of Manhattan co-op apartments to trade hands in the third quarter.
An interesting recent phenomenon has been the renewed interest by first-time buyers and buyers of pied-a-terre, namely studio and 1-bedroom apartments. Their share of the co-op market increase from 50% last year, to 58% in the most recent quarter. Buyers in the entry-level market are more sensitive to the coming changes in mortgage rates that were predicted to rise gradually over the next year. They are attempting to â??lock inâ?? now to take advantage of low rates. However, the jury is still out on the economy right now, as evidenced by falling mortgage rates despite a series of interest rate increases by the Federal Reserve.
p>Perhaps one of the most compelling reasons for the recent spate of price increases has been the lack of inventory. As compared to the 1980â?