Gregory J. Heym
Executive Vice President, Chief Economist
Diane M. Ramirez
Average price of a condo soars to $1.2 million as property experts downplay bubble fears
BY JAMES FANELLI amNewYork staff writer
Manhattan apartment prices continue to balloon, bucking warnings of a pending bubble burst, a report released yesterday shows. The Real Estate Board of New York’s report said the price of Manhattan condominiums soared in the third quarter, with median sales surging 22% from a year earlier to a whopping $814,000 while average sales swelled 29% to $1,285,218.
The report did show that cooperative prices dipped slightly in the third quarter, with median sales dropping 2% to $650,000 and average sales declining 5% to $1,006,952.
“Clearly condominiums led the quarter in terms of price gains,” REBNY president Steven Spinola said. “However, the dip cooperatives can be slightly misleading as it is likely the result of a softening luxury market, not necessarily the market overall.” He added that sales of smaller cooperatives like studios and one-bedrooms rose 20%.
Overall, REBNY’s third quarter report showed that the median sales price of Manhattan apartments climbed 9% compared to a year earlier while average sales rose 11.6%. Dispelling worry of future bubble trouble, REBNY, the largest real estate trade association in the city, also offered a cheery outlook for the remainder of the year.
“With the still strong economy, comparatively low interest rates, a growing population, and the creation of new jobs, we think the residential market will continue to be strong in the fourth quarter of 2005 into 2006,” Spinola said.
Real estate experts from around the city said that REBNY’s third quarter report was another validation against critics who have warned of a real estate bubble.
“It’s the same people who say the Yankees are not going to win the division each year,” Greg Heym, chief economist of Brown Harris Stevens, whose real estate firm puts out the largest quarterly sales report. Heym said REBNY’s report matched his firm’s figures, though Brown Harris’ third-quarter report showed a 9% gain in cooperative sales prices compared to a year earlier.
Diane Ramirez, president of Halstead Property, also agreed, saying the city’s real estate market continued to be robust because of a small supply, low interest rates and a thriving economy.
“I think the bubble is just people looking for a negative story,” she said. “We’ve been a positive marketplace for a very long run.” Manhattan’s skyline remains a draw in the city’s housing market.
Thursday, November 03, 2005