…As we march on into the third quarter, it’s time to analyze some trends—the good, the bad, and the ugly—from the one we just wrapped up. In a continuing saga from the first quarter of the year, the number of Manhattan apartments for sale continued to fall… and fall… so far, in fact, to the lowest second-quarter figure on record, and the second-lowest figure for any quarter at that, at least in the 13 years that real estate guru Jonathan Miller has been keeping track. Speaking of JMillz, here’s his executive summary of this Q2’s Elliman Report, a.k.a. what happened, why it happened, and what we can expect down the line. “Sales were expected to be low in the first half of the year, given the huge year-end volume seen [in late 2012] as people rushed to beat the fiscal cliff. 4Q12 was the most sales for a fourth quarters ever seen and that was expected to poach from 2013. It probably did, but we had a rise in sales anyway despite low inventory,” he says. “Two causes: the threat of rising mortgage rates and the release of pent-up demand from the past few years.” Low inventory coupled with high demand is leading to lots and lotsa sales (the most active spring since 2007!) and, bummer, pushing prices higher—the median sales price for Manhattan (Miller’s metric of choice) increased 4.3 percent year-over-year to $865.000.
Much of the new development activity—think 432 Park, One57, 56 Leonard, and the rest of ’em—is aimed at the top 10 percent of the luxury market, and so, Miller says, “the remaining 90 percent don’t have a lot of hope for new supply in the near term, because developers can’t build much other than high-end due to cost of land and construction.” He concludes: “It will continue to be frustrating with limited choices and upward price pressure.” Well darn. It is without a doubt a seller’s market out there for the near future, but there is one bright spot for buyers: rising mortgage rates will help take some of the edge of rising prices….