Gregory J. Heym
Executive Vice President, Chief Economist
by Julie Satow
The price of Manhattan apartments is at nearly the same level as June 2005, suggesting the residential market may not be in a bubble, according to a report released Wednesday.
At the end of March, the average price for apartments rose 4% to $1.327 million, almost flat with the average price last June of $1.332, according to a monthly report by Halstead Property.
"We have seen growth in virtually all sectors of the market because interest rates have not risen as fast as was anticipated and the economy remains strong," said Gregory Heym, the chief economist for Halstead.
In March, the median price for city apartments was $752,000, or 5% higher than a year ago. The biggest change in price was on the east side, where the cost of studios jumped 19% to $375,000. On the west side, both studios and one-bedrooms saw price increases of 26% to $413,000 and $692,000, respectively. Studios downtown posted the biggest gain, increasing 41% to $454,000 this year.
Inventory dropped on the east side, helping to spur the price increases. The number of studio units fell 16% in the past year, while the number of three-bedroom units decreased by 23%. The only inventory growth was among two-bedroom units, which increased by 21%. On the west side, studios dropped by 117% to 52. Three bedrooms also saw a major decline of 51% to 18. Downtown, inventory was up across the board. The most new units were studios, which jumped 80% to 72 this year.
©2006 Crain Communications Inc.
Wednesday, April 12, 2006