According to Greg Heym, Halstead Property's Chief Economist, one year ago, pending tax law changes led to a dramatic rush of high-end closings in 2012’s fourth quarter. This included 14 sales of at least $20 million, 2 of which were at least $50 million. This year’s fourth quarter did not see the same number of high-end closings, resulting in a lower average price. Yet, at $1,553,599 the fourth quarter 2013 average price was just 2% lower than a year ago, while the median price was just 1% lower.
The decrease in high-end activity was specifically prominent in co-ops, which saw their average price fall 18% over the past year. Of the 14 sales for $20 million or more a year ago, 10 were co-ops. This year’s fourth quarter saw no co-op sales cross that threshold, thus accounting for the average price decline. The median co-op price, which looks at the middle of the market, was less than 1% lower than a year ago.
Helped by a strong new development market, condo prices averaged $2,160,272 in the fourth quarter. This was a 15% improvement from 2012’s fourth quarter and a new record. The average price for a condo in a new development also set a new record, reaching $2,885,758.
A strong local economy, booming stock market and steady foreign interest has kept demand for Manhattan apartments strong at a time when supply continues to shrink. Despite inventory levels roughly 20% below 2012, the number of sales was actually higher this year. Prices have been rising all year, but at a much more sustainable rate than in the last rising market.
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