Manhattan Real-Estate Market As Insane As Ever

By
Photo: Shutterstock

Buyers hoping the real-estate industry got served a dose of hardscrabble reality this summer — for being the untenably competitive, frothy market that it has become — will be disappointed. Manhattan's market is hotter than ever, according to third-quarter reports for the borough released today by the city's biggest real-estate firms. In fact, it's the briskest it has ever been, with 3,837 done deals, a 30 percent climb from this time last year and the most sales transactions since the pre–Lehman Brothers days of 2007 and the second highest in the last 24 years, per the Douglas Elliman survey.

Inventory continued its decline, with 4,567 active listings — almost 22 percent less than the same period a year ago. This despite sellers starting to jump into the market, lured by all the activity; there were 312 average new listings per week, real-estate analytics firm Streeteasy.com found, compared to 288 last year. "Inventory is not being replenished fast enough," says appraiser Jonathan Miller, who compiled the Elliman report. And, according to Jim Gricar, president of Halstead Property, buyers are scarcely able to negotiate the price, with sellers realizing 98.6 percent of their asking price. "This is not some blip," he says. "It's the culmination of the path out of the real-estate recession."

There are very few signs of an imminent slowdown. The Corcoran Group's survey shows the numbers of contracts signed this quarter, which will likely close toward the end of this year, up by 12 percent from last year. Still, Miller says many of this quarter's sales are attributable to buyers who'd been sitting out but were pulled into the market by threats of rising interest rates. (Most of them were shopping for one-bedrooms.) And some relief could come from inventory problems easing a bit as more developers rush to capitalize on renewed zest among buyers. The Furman Center for Real Estate and Urban Policy found developers getting construction permits for more than 4,000 new units from April to June 2013 — 1,000 units more than they asked to build in the same period in 2012. Most of them, though, are in Brooklyn and the Bronx.

For the record, the average price of a Manhattan apartment is now $1,451,621, per Brown Harris Stevens. The median price is $870,000. In other words, you probably can't afford it.