The Manhattan condo market saw healthy price growth last month as stubbornly low inventory kept prices at record highs. The number of condos available for sale in January was only slightly more than last year, growing 3.7 percent to 3,880 units. Condo inventory has been stuck at near record low levels for much of the last two years, with January’s total 18.2 percent lower than Manhattan’s 5-year historical average.
As a result of constricted supply, condo prices continued to climb in January albeit at a slightly lower rate. Prices grew by 8.8 percent from last year, according to the StreetEasy Condo Price Index (SECPI), closing the month 13.6 percent above previous peak prices set in September 2007. Annual growth rates had declined in 12 consecutive months prior to rising slightly in January, signaling that the condo market is returning to a more sustainable pace after the robust appreciation seen in 2013.
According to the StreetEasy Condo Price Forecast, condo prices are expected to grow by 4.9 percent in 2015, nearly half the 2014 growth rate of 8.3 percent and roughly a third of the 2013 growth rate of 16.6 percent.
High prices and low inventory pulled pending sales volume down 6.6 percent from last year as would-be buyers were either priced out or shut out of the market. Contracts were signed on just 310 condo units in January, a 6.3 percent dip from December and the lowest monthly total in 36 months (January 2012). Pending sales activity is expected to remain low until March, when the warmer weather and spring selling season typically boost new sales volume.
Buyers seemed to be in no rush to close on properties in January. Despite winter putting its typical chill on sales activity, those condos that did sell lingered on the market for a median time of 82 days, a full 19 days longer than December and 5 days longer than last year. This was the longest time on market since February 2013.
Everything seems to slow down in the dead of winter in Manhattan – it’s real estate market included. The Manhattan condo market showed about as much activity in January as you would expect from a snow pile. Luckily, Staten Island Chuck predicted an early spring, which may send an anticipated boost in inventory and sales volume a bit earlier this year.
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