Posted on: Friday, July 16, 2004
Manhattan apartment price averages $1 million
By Kathleen M. Howley
Bloomberg News Service
Manhattan apartments are selling for more than $1 million on average for the first time, higher than in any other U.S. city, as New York's economic growth outpaced the nation's and the number of apartments for sale declined.
The average price for a condominium or a cooperatively owned apartment last quarter rose 4.9 percent from the first three months of the year to $1.05 million, according to a report by residential appraiser Miller Samuel Inc. and Douglas Elliman, a Manhattan real estate brokerage.
New Yorkers are bidding up prices after the city's economy grew at the fastest pace in four years during the first quarter and Wall Street bonuses followed 2003's rally in stocks and bonds.
Even as interest rates rise, there's been no slowdown in July, usually one of real estate's quietest months of the year, said Donald Trump Jr., vice president of development for the Trump Organization.
"We're selling to people who are traditionally in the Hamptons or in Europe for the summer," Trump, 26, said. "They're still here, and they're still buying."
At Trump Park Avenue, 11 apartments sold in June, four more than in May, Trump said. This month, the former Delmonico Hotel in midtown Manhattan that Trump's father, Donald Trump, turned into luxury condominiums with white marble baths and oak floors, sold five units. Apartments in the building range from $800,000 to $30 million, Trump said.
Manhattan apartments' second-quarter average price per square foot rose 7.6 percent to a record $786, and the average size fell 2.5 percent to 1,332 square feet from the previous quarter.
Higher demand reduced buyers' ability to negotiate, Miller said. The so-called discount, the difference between asking and listing prices, fell to 2.3 percent from 2.6 percent. Listing inventory, the number of homes available for sale, shrank 14 percent from the year-ago period to 5,211 units.
New York City's economy grew by a 7 percent annual pace in the first quarter, faster than the nation's 4.4 percent rate, according to the most recent data available.
Last quarter, the median Manhattan apartment price, the selling price at which half sold for more and half for less, was $674,000, Miller Samuel President Jonathan Miller said. Average prices are affected by luxury sales, he said.
Manhattan's median is almost four times the national level.
The U.S. median price was $173,300 in the first quarter, according to the latest data from the National Association of Realtors. In Manhattan, it was $625,000, Miller said.
The increase in apartment prices has caused speculation that the market may be in a bubble. Prices may drop if economic growth declines or a terrorist attack occurs, Paul Purcell, co-owner of brokerage Braddock + Purcell, said.
A three-bedroom apartment at a so-called "pre-war" — built before World War II — building on 139 East 79th Street sold for $4.6 million in January, Purcell said. Two months later, an apartment one floor above, with the same layout and similar features sold for $5.6 million, a gain of 22 percent.
The average Manhattan price for a studio condominium was $427,311 in the second quarter, the report showed. A one-bedroom unit was $659,018, a two-bedroom was $1.64 million, a three-bedroom was $3.58 million, and a unit with four or more bedrooms was $3.77 million.
San Francisco is the second most expensive U.S. condominium market, with a median price of $629,000 in May, according to DataQuick Information Systems, a real estate information service based in San Diego. In the metropolitan Los Angeles area, the median price was $321,000 in May.
In Boston, the median sale price for a condominium in May was $432,500, according to the Warren Group, a real estate consulting company. In metropolitan Chicago, the median price was $179,000, according to the Illinois Association of Realtors.
