The Manhattan market continues to heat up as the spring home buying season nears, with overall median sale prices up 6.5% to $900,000 in the first quarter of this year and up 16.9% from this same time last year, according to the Q1'14 market report from StreetEasy, a New York City real estate marketplace owned by Zillow.
StreetEasy says this is the largest annual increase since the height of the market in the first quarter of 2008, and paired with a six-year inventory low, this could signal a tough spring ahead for buyers.
The report shows that new developments and re-sales both reported double-digit annual price increases in the first quarter of this year. Among re-sales, condo sale prices surged to $1.25 million, a 21.9% year-over-year increase. Co-op prices rose 14.3% to $680,000. Sale prices for new developments rose 50% year over year but represented only 11% of closings in the quarter.
The significant rise in prices was fueled by the continued downward trend in inventory, notes StreetEasy, and at the core of tight inventory are extremely fast-paced sales, even for Manhattan standards.
Average days on market for listed inventory was only 89 days – the lowest average recorded since StreetEasy began tracking this data in January 1995. This is a 35.2% decrease from this same time last year, when homes were listed for 137 days on average. Overall Manhattan inventory fell 13% in the first quarter compared to Q1'13 to its lowest level since Q4'07. Co-ops showed the largest annual inventory decrease (-18.6%), followed by condos (-7.3%) and single-family homes (-2.5%).
Additionally, the total number of contracts signed in the first quarter of this year fell 9.3% from Q4'13 and 15.2% year over year – which StreetEasy says is an important indicator of interest in current price and supply of homes on the market.
Upper Manhattan recorded the lowest median sale price for the quarter, with $375,000, with Downtown and the Upper East Side recording the highest, both at $1,175,000.
Upper Manhattan also had the lowest year-over-year change in median sale price, with a 3.6% decrease, while the Upper West Side had the highest: a 37.6% year-over-year increase.
The Upper West Side, however, recorded the fewest number of days on market in for-sale inventory, at 74, while Upper Manhattan led that category with 104.
The StreetEasy Condo Market Index, which tracks Manhattan condo price movements over the past 15 years, rose to 2331 in February and is up 16.3% since February 2013.Â
‘What we're seeing is a discouraging trifecta for Manhattan buyers: higher prices, drastically lower inventory and higher interest rates, which is keeping some potential buyers out of the market,’ comments Alan Lightfeldt, data scientist at StreetEasy.
‘We don't expect these double-digit price increases to last much longer before sellers are unable to find willing and able buyers. For buyers, be prepared for a challenging spring. You'll need to act fast,’ he concludes.
The full StreetEasy Manhattan Market Report can be downloaded here.