After flirting with records for more than a year, the average sales price of a Manhattan apartment hit a new high in the second quarter, according to at least two reports to be released on Wednesday by major real estate brokerage firms.
A strong local economy, combined with high demand and not enough listings, pushed the average sales price up 11 percent, to $1.87 million, compared with the same period in 2014, surpassing the previous peak of $1.77 million reached in the first quarter of last year, according to Jonathan J. Miller, the president of the appraisal firm Miller Samuel and the author of a report for Douglas Elliman Real Estate.
The median sales price, which measures the middle of the market and is less affected by high-end sales, was $980,000, just behind the record of $1.025 million set in the second quarter of 2008, before the financial crisis hit, according to Miller Samuel.
“It’s like everyone revved up their engines again,” said Pamela Liebman, the chief executive of the Corcoran Group, which put the record average sales price at $1.81 million and the median at $960,000. “We saw continuous demand across all price points, buoyed by some exciting new developments that have come on the market and a continued influx of buyers from China.”
“In all my years of doing this,” she added, “I have never seen such a hunger for New York City real estate.”
Other market reports using different numbers and methodologies put the overall average price just shy of previous records, but a number of reports posted records in a variety of categories. The average price of new development and resale condos reached a new high of $2.41 million in the second quarter, according to Douglas Elliman. Reports by Halstead Property and Brown Harris Stevens noted that prices of resale apartments broke new barriers for the same period, and put the average price of resale apartments at $1.57 million and the median price at $920,700.
The higher prices were driven by two key factors. Inventory growth has begun to stall, especially in the resale market, where potential sellers are reluctant to list their properties as they are often outbid, turned down for loans or simply cannot find what they are looking for. The number of available listings barely budged, up 1.3 percent in the second quarter to 5,730, compared with a year ago, according to Douglas Elliman.
At the same time, most of the fresh listings making their way onto the market are coming from new developments, which have primarily offered larger residences at higher prices. “Many of the developers were very smart in the type of product they brought to the market,” Ms. Leibman said. “Developers helped to create and fuel the demand by offering these high-end luxury condos with views and amenities, and foreign buyers in particular have really responded. Everybody keeps raising the bar.”
The rising prices have also contributed to a drop in sales, said Diane M. Ramirez, chief executive of Halstead Property, which found that the number of reported closings declined 10 percent to 2,430 in the second quarter from the same period last year. “Sellers are holding firm in their price, and buyers are only going forward if the price makes sense to them,” Ms. Ramirez said. “So you are seeing fewer closings.”
Ms. Ramirez said if buyers can’t find what they are looking for or sellers refuse to price appropriately, the lack of inventory is exacerbated. “It is a vicious cycle, and buyers are continuing to be frustrated,” she added.
Mr. Miller, who authored the Douglas Elliman report, pointed out that the number of sales fell year-over-year for the fourth consecutive quarter, but noted that those decreases were coming off a flurry of sales activity in 2013. “It’s a reset from the record sales we had in 2013 and early 2014 that were a result of pent-up demand,” he said.
Value, however, is a relative term when it comes to Manhattan real estate. “We look at the prices and we don’t even blink, because we’re so used to them,” said Dottie Herman, the chief executive of Douglas Elliman. “But anyplace else, they’re outrageous.”