Since Manhattan’s apartment sales broke records in 2012, it’s only fitting that the year ended with more records breaking. The fourth quarter saw not one, but two records fall, according to real estate guru Jonathan Miller. It had the most fourth quarter sales in at least 25 years, and it had the lowest level of inventory for any quarter since 2000. The Elliman report found that sales totalled 2,598, with the “fiscal cliff” spurring many of these sales. “People already on the fence on whether to buy or sell may have moved forward their plans before 12/31 since whatever form they take in 2013, taxes were assumed to be higher,” explained Miller. Overall, prices were mixed but stable, with a median price of $837,500, but with low inventory and solid sales, prices may go up in the coming year. “Nothing boom-like,” notes Miller, “but still upward pressure.”
In the last month of 2012, there was a huge push for buyers and sellers of luxury apartments to get deals done before the cliff, and it shows in the quarterly reports. Brown Harris Stevens found that there were 23 sales recorded over $10 million, while in the fourth quarter of 2011, there were only 16. StreetEasy had the number of $10M+ closings even higher, at 37. And it’s no surprise why that number is so high—2012 saw 644 properties priced over $10M, the highest number in the last five years, according to StreetEasy.
As for the low inventory, this has caused apartments to sit on the market longer, with older inventory being sold off. Miller found the average length on the market was 177 days, up more than 36 percent from the same period last year. StreetEasy’s report showed that studios and one-bedrooms saw the largest decline in inventory, with both categories dropping 17.2 percent since 2011, and over 20 percent down since 2010.
So what does this mean for 2013? “More of the same,” says Miller. “Strong international demand, slowly improving economy, low mortgage rates, tight credit and tight inventory, but since inventory is so low with no real relief in site we may see a price gain.” But don’t think this means the market is better. “It just means that supply is tight because credit remains tight; artificial versus fundamentals based housing recovery.”