Manhattan condo prices rose to their highest level on record in the final quarter of 2014, ending a year in which inventory failed to rebound from a five and a half year slide from the market’s 2009 peak. The median sale price across all property types jumped to $942,000, a 6.4 percent jump from the previous quarter and nearly 11 percent above last year’s level.
Condo prices inched up nearly 1 percent from November, according to the StreetEasy Condo Price Index, and were 8.4 percent above year-ago levels. December marked the 24th consecutive month of price growth among condos – the second longest rally on record behind the 31-month growth streak between May 2003 and November 2005 during which prices surged 48 percent. Manhattan condo prices have grown 26 percent since January 2013 (the beginning of this rally).
Price growth is fueled by historically low inventory across Manhattan. Overall, there were 10,129 units available in the fourth quarter, a steep 11.7 percent decline from the third quarter. In a sign of the market’s anemic inventory, the total number of units available in the fourth quarter was a staggering 39 percent below Manhattan’s peak inventory total set in the second quarter of 2009.
A steep drop-off in co-op listings sent total Manhattan inventory nearly 1 percent below last year’s level. Co-op listings fell 6.5 percent from last year while condo and townhouse listings increased 4.7 percent and 18.0 percent, respectively.
For sidelined buyers wondering how much longer the market will continue to be constrained, relief may be on the horizon. A small increase in the median time on market, a slight uptick in discounts, and slowing price growth point to a slackening market ahead. Manhattan homes took a median time of 54 days to sell in the fourth quarter, unchanged from the third quarter and two days longer than last year. In another sign of waning buyer demand, the share of all available units that saw a price cut in the fourth quarter edged up slightly from last year, rising from 21.3 percent to 22.2 percent.
While prices remain high, growth is anticipated to decelerate. Condo prices are expected to grow by 4.9 percent in 2015 (December to December), according to the StreetEasy Condo Price Forecast, down from 8.4 percent in 2014.
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