Diane M. Ramirez
Gregory J. Heym
Executive Vice President, Chief Economist
By Phyllis Furman
Wealthy buyers are helping Manhattan's residential real estate market continue to hum, despite the faltering economy.
The average price of a Manhattan apartment during the summer months was $1,437,302, in line with the second quarter and up 1% from the same period in 2010, according to a quarterly report from real estate brokerage firm Brown Harris Stevens.
But the market appears less rosy when looking at the median price, which measures the middle of the market and is less impacted by high-end sales.
The median price of a Manhattan apartment during the third quarter was $850,000, a 4% drop compared with last year and even with the previous quarter.
"Prices are kind of flat," said Hall Willkie, president of Brown Harris Stevens Residential Sales.
During the summer months, there were 25 apartment sales priced at $10 million and above, the second-highest total since the second quarter of 2008, according to Jonathan Miller, CEO of appraisal firm Miller Samuel, which compiles quarterly reports for the Prudential Douglas Elliman brokerage.
Buildings where trophy properties changed hands included 15 Central Park West, Time Warner Center and 834 Fifth Ave. Foreign buyers are swooping in, capitalizing on the weak dollar, Miller said.
"You are seeing more strength at the higher end," he said. "Manhattan's reputation is the high end and that reputation continues to hold true."
Overall, the number of sales jumped in the quarter, reaching 3,106, up 16.7% compared with the previous year and up 17.2% compared with the previous quarter, according to the Prudential Douglas Elliman report.
Diane Ramirez, president of Halstead Property, noted that the inventory of available apartments is a seven-month supply, typically a sign of a stable market. Nearly 96% of apartments sold at their asking price, the same amount as last year.
"Sellers are pricing their apartments correctly," Ramirez said.
Manhattan apartment prices are now about 15% below the peak reached in 2008. Looking ahead, real estate experts said they expect prices to remain flat for the foreseeable future.
Sofia Song, vice president of research at StreetEasy, said a continuing challenge for buyers is strict lending requirements, which make it tough to get a mortgage.
Securing a mortgage just got even harder for some because the limit on mortgages that are eligible for Fannie Mae and Freddie Mac backing was recently reduced to $625,500 from $729,750, she said.
"This means that there's less buying power for New Yorkers. If you need a loan over the cap, it means higher down payments and higher interest rates," Song said. "This will definitely put additional stress on the market."
Tuesday, October 04, 2011