The StreetEasy Market Reports include extensive data and analysis for Manhattan and Brooklyn. Below are Manhattan highlights. If you would like to read about the Brooklyn market, click here.
Manhattan Report Highlights:
- Record-High Prices in Manhattan: Manhattan sales prices, as tracked by the Manhattan Price Index, grew by 5.8 percent from last year to a new record of $936,683.
- But, Price Growth is Slowing: Despite sales prices reaching record highs in the second quarter, the pace of growth has slowed compared to 2014. Last year, prices increased 7.7 percent.
- Sluggish Inventory Growth is Bad News for Buyers: Low inventory, along with resilient demand, meant that buyers were in fierce competition and had to pay nearly full asking prices to secure a home.
- Manhattan Sellers are Getting Price-Savvy: Manhattan homes sold for only 1.1 percent less than initial asking price and there was a significant drop in the number of homes with a discount, indicating sellers were adjusting pricing strategies more accurately this spring.
- Manhattan Studios See Largest Rent Hike: The median asking rent in the second quarter increased by 1.5 percent from last year to $3,300, a new record-high according to StreetEasy data. Studios saw the greatest increase in price, with median asking rent increasing by 5.1 percent to $2,495.
Manhattan Prices Reach Record High, Low Inventory to Blame
Manhattan home prices reached a record-high of $936,683 in June, according to StreetEasy’s Manhattan Price Index (MPI). However, price growth across the borough has slowed for 17 consecutive months and prices grew at a rate of 5.8 percent, down from a 7.7 percent rate in 2014.
The key market force driving high prices in Manhattan is constrained inventory. Although the number of for-sale listings available throughout the quarter rose by 14.1 percent from the previous quarter, inventory was just 0.1 percent above last year’s total. The lack of significant inventory growth was due in large part to a 3.1 percent decline in co-op listings. Listings for condos and townhouses in Manhattan managed to grow by 3.0 percent and 11.0 percent from last year, respectively.
Sellers Get Smart with Pricing Strategies
Key price indicators in the second quarter show that many Manhattan sellers are effective with their pricing strategies. The share of all listings that saw a price cut during the second quarter declined to 25.9 percent from 32.0 percent last year and the size of the median discount fell slightly to 6.25 percent from 6.5 percent in the second quarter of 2014. In Manhattan, homes sold for just 1.1 percent below the initial asking price in the second quarter.
Contract Activity Strong in Q2
As is typical for second quarters, the total number of pending sales saw healthy growth from the previous quarter, increasing by 25.3 percent to 3,338, which was 0.8 percent greater than last year. The fact that pending sales volume increased since last year despite price growth and short supply is a testament to the strength of domestic and international demand for Manhattan real estate. Homes that went into contract in the second quarter spent a median time of just 44 days on the market, one day longer than last year, which itself was a record low according to StreetEasy data. Eagerness to lock in a low mortgage interest rate and fierce competition among other buyers are the key drivers behind the resiliency of contract activity and near-historic short time on market.
Low Vacancy Fuels Higher Rent Prices
According to government figures, Manhattan’s rental vacancy rate was just 4.1 percent in 2014. The result is fierce competition among renters, higher rents, and a growing affordability problem for many Manhattan residents as rent price growth outpaces income growth. The median asking rent in the second quarter increased by 1.5 percent from last year to $3,300, a new record-high according to StreetEasy data. Studios saw the greatest increase in price, with median asking rent increasing by 5.1 percent to $2,495, while the median asking price for one-bedroom units was unchanged at $3,200. The most expensive submarket was Downtown, with a median asking rent of $3,500, followed by Midtown ($3,500), Upper West Side ($3,350), Upper East Side ($2,850) and Upper Manhattan ($2,150).
To read highlights from the Brooklyn Market Report, click here.
For additional data and graphics for both boroughs, download the full report as a PDF here.