New York City’s real estate market has reached blistering temperatures, with record sale prices reported at the end of 2015. In the fourth quarter alone, the average sale price for a Manhattan apartment hit a lofty $1.95 million, representing a 12% jump year-over-year, according to the latest Elliman Report.
Over the same period, the median sale price topped $1.15 million while the price per square foot climbed to a jaw-dropping $1,645. In the rental market, Manhattan rental prices have increased by 3.9% over the last year, with the average rental price hitting $4,071 as of November 2015.
Demand from global buyers who are looking to escape the fallout from the market slowdown in China is what’s leading the push in the condo market, where new construction sale prices are averaging just shy of $3.3 million. Newly developed properties represented an 18.6% share of the overall sales market through the fourth quarter.
On the co-op side, pricing is still moving up but it’s been slower to peak, with the average sale price hovering around $1.28 million. The number of active listings declined by 6.2% from the fourth quarter of 2014, while sales are down 4% over the same time frame. Despite these dips, 2015 was still a record-setting year and the big question is, what’s next for the New York real estate market?
China’s slide will help to maintain the momentum
From an investor standpoint, real estate remains a hot ticket for 2016 and New York is set to remain on solid ground, despite foreign market upsets. China’s shaky economic outlook has triggered a fight-or-flight response among foreign investors and the result is a substantial shift in assets to less volatile U.S. holdings, including real estate.
According to Collier’s 2016 Global Investor Outlook, New York continues to be a prime destination for wealthy investors in need of a safe haven. Manhattan took the lead in terms of global capital in the third quarter of 2015, raking in more than $4 billion. That trend looks set to continue, with 24% of overseas investors planning to invest in New York real estate over the next 12 months.