The unburstable bubble of Manhattan real estate continues to inflate, with the New York Times reporting that the average sale price of a Manhattan apartment hit a new high in the first quarter of 2015. According to new market reports from top real estate brokerage firms, the average price of a Manhattan apartment is over $1.8 million, surpassing the previous record of $1.77 million set in the first quarter of 2014.
A report from Douglas Elliman estimates the average price at $1.87 million, while a report from The Corcoran Group puts it at $1.81 million.
The Times got this telling quote from Corcoran’s CEO:
“It’s like everyone revved up their engines again,” said Pamela Liebman, the chief executive of the Corcoran Group, which put the record average sales price at $1.81 million and the median at $960,000. “We saw continuous demand across all price points, buoyed by some exciting new developments that have come on the market and a continued influx of buyers from China.”
“In all my years of doing this,” she added, “I have never seen such a hunger for New York City real estate.”
The median average of Manhattan prices, “which measures the middle of the market and is less affected by high-end sales,” as the Times puts it, is considerably lower than the mean. Douglas Elliman places the median at $980,000 and Corcoran at $960,000.
The Times credits the rise to two factors: One, a simple supply-and-demand issue of not a lot of available inventory; and two, the high prices of the new developments, which are mostly only affordable to investors.
The very candid Liebman told the Times, “Many of the developers were very smart in the type of product they brought to the market. Developers helped to create and fuel the demand by offering these high-end luxury condos with views and amenities, and foreign buyers in particular have really responded. Everybody keeps raising the bar.”
The incredibly expensive new developments and foreign investment are causing housing prices to rocket, putting home ownership in Manhattan out of reach for almost everyone. The increasing transformation of Manhattan real estate into a financial instrument first and foremost instead of physical spaces where people live has turned Manhattan, in the word’s of ANIMAL’s Prachi Gupta, into a “gated community for the rich.”
(Photo: Chris Goldberg)