11/23/08

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Residential sales move briskly

(Source: Miller Samuel)

The Manhattan residential market has plenty of spring in its step.

But as the season moves into summer, sales activity remains strong, especially among the priciest properties.

The number of apartments on the market in Manhattan has also risen, a seasonal increase that reflects the busiest time of the year. Newly developed condos are hitting the market in large numbers, but co-ops are in shorter supply.

The average first-quarter sales price of a Manhattan apartment rose 5.4 percent to $1.29 million, according to Jonathan Miller, president of appraisal firm Miller Samuel. The upward movement appeared to be continuing into late May.

Miller said he is seeing high-level activity across the market, but also "[particular] price pressure targeting upper-end properties."

Pricey properties are now harder to find.

"Listings are very tight in the top 10 percent of the market," said Miller.

Overall, Manhattan apartment inventory grew across the market in spring, but not as quickly as in previous years. Inventory traditionally rises in the spring, as many homeowners choose to place their properties on the market during that season.

There were 6,182 listings on the market in April, according to Miller Samuel. That's a 4.4 rise from the month before, but down 9.1 percent from the same time last year.

"We expect to see inventory rise this time of the year, and what we've seen is consistent with the usual 5 to 10 percent increase in spring inventory," said Miller.

Condo listings are increasing as new developments keep coming onto the market. Condos made up 52 percent of the listings on the market in April. Listings rose 7.7 percent from the month before and 3.9 percent compared to a year earlier, according to Miller Samuel.

Co-ops, meanwhile, are growing scarce. In April, the number of co-op listings was down 20 percent compared to a year earlier, though up 1 percent from March.

While condo inventory is up, units are still moving well, according to Andy Gerringer, managing director of new development marketing at Prudential Douglas Elliman. Gerringer said his company will bring approximately 1,200 new units to the market in the second quarter. Since April 1, Elliman has launched sales at the Chelsea Stratus and the Clement Clarke, both in Chelsea, and at Urban Green and 20 Bayard Street, both in Williamsburg. It plans to launch sales soon at the Power House in Long Island City.

"The spring selling season is off to a very good start. The buyers have definitely come back into the market," Gerringer said last month. "It's a good time to launch. Buyers are out there, pricing is strong, and while we're not raising prices on a daily basis, we're certainly on a level where we're not really negotiating."

Meanwhile, the increasingly tight co-op market is making for competition among buyers.

"The market is extremely busy in all price ranges and there are more bidding wars," said Michele Kleier, president of Gumley Haft Kleier. "Several of our brokers have lost quite a few and clients are getting frustrated."

According to Kleier, in some bidding wars units are selling for as much as 20 percent over the original asking price.

"Clients that win wonder if they paid more than they needed to and if you lose, you feel that if you had added another $50,000 or $100,000 the apartment would be yours." Kleier said. "With best and final bids, you can't use past comparables and you can't use other apartments sold because it's not relevant. Apartments priced for $3.3 million are selling for $4.2 million."

In particularly high demand are convertible three-bedroom apartments priced under $2 million, as well as seven-room apartments in the $3 to $4 million range, said Kleier.

Prudential Douglas Elliman vice president Toni Haber recently sold a seven-room apartment for approximately $500,000 above its $2.795 million asking price. Located at 22 East 88th Street, the 2,000-square-foot co-op had an attendance of 80 people at the open house and nine bids. It sold after only one week on the market.

According to Haber, bids well over asking price are still unusual, but happening more frequently now than they have for a long time.

"Things are moving very briskly," Haber said. "There is not a lot on the market."