The Manhattan real estate market continued a yearlong trend, ending the final quarter of 2013 with a scarcity of listings and surging sales, while prices remained relatively flat.
Despite the flurry of sales activity at the end of the year, the median sales price of $855,000 was up just slightly from the same quarter of 2012, according to a report by the Douglas Elliman brokerage firm that will be released on Friday.
That number is still far from the market’s peak in 2008, when the median was close to $1 million, but it is up from the market’s bottom in 2009, when the median hovered around $800,000.
“I think we’re going in a very good direction,” Diane M. Ramirez, the chief executive of Halstead Property, said. “The prices are going up but at a very sustainable rate.”
A strong local economy, stock market gains and steady foreign interest helped bolster demand for Manhattan apartments as supply continued to shrink, brokers said. The year ended with the fewest available fourth-quarter listings in 14 years, according to the Elliman report. Despite the low inventory of apartments, the number of sales rose 26.8 percent to 3,297 — the highest fourth-quarter total recorded, outpacing the sales surge at the end of last year when wealthy buyers rushed to close deals before new tax laws kicked in with the new year.
This uptick in sales at the end of 2013 was driven in part by closings in expensive condominiums aimed at the upper echelon that had been in contract for many months. Those deals helped push the median sales price for Manhattan condos, including resales, up 14.3 percent to a record $1,320,000, according to the Elliman report.
“The smart developers realized there was an underserved need for large apartments in New York City and this quarter in particular saw a lot of large apartments closing, which helped to drive up the price,” Pamela Liebman, the chief executive of the Corcoran Group, said.
New development had a robust 32 percent increase in median price, as closings skewed toward the high end, according to a report by the Corcoran Group.
It is a trend that is expected to continue in 2014 as a number of new luxury developments currently in contract at record-breaking prices are poised to close, Ms. Liebman added, noting that highly anticipated closings in Extell Development’s luxury tower, One57, have just begun. More than 10 condos there priced above $45 million were under contract at the end of 2013, two for more than $90 million.
The luxury category, which represents the top 10 percent, “continues to grab headlines” with double-digit year-over-year increases, said Andrew Heiberger, the chief executive of Town Residential, which found in its report that the median sales price of the top 10 percent of the market increased $4,604,019 in the fourth quarter, up 15.1 percent from the same period in 2012. The rest of the market, he said, “remained status quo.”
Co-ops, which account for the majority of sales, sold at a median price of $660,000 in the fourth quarter, down 2.4 percent from the fourth quarter of 2012, according to Town Residential. But at any category, said Hall F. Willkie, president of Brown Harris Stevens Residential Sales, buyers do not want to feel like they have overpaid. “They’re wanting the price they pay to be very justifiable,” he said, adding that price sensitivity continues to help keep the market “very healthy.”
In 2014, brokers expect supply to begin to loosen up. “I think you’ll see a little rise in inventory,” said Dottie Herman, the chief executive of Douglas Elliman, adding that as sales prices increase and sellers gain equity and confidence that they can find something to buy, they are more willing to list. “When you have no equity, you’re kind of stuck,” she said.
Jonathan J. Miller, the author of Elliman’s report and the president of the appraisal firm Miller Samuel, agreed. But he said that rising mortgage rates could slow the pace of sales and that “in 2014 we expect inventory to edge higher, but it’s not going to be enough to meet demand.”