Surging from a rebounding economy, market stablility, and the trophy brand that is Manhattan, the property market closed 2012 with record sales.
This morning, I had the pleasure of speaking to Jennifer Harrison of Property Life magazine whose writing I find to be very real, entertaining and a lot of fun. As a Manhattan-based property expert, I gladly accepted her invitation to be a contributor for Property Life and, as timing would have it, this first article is on Manhattan’s fourth quarter property market report. Alas, it is a numbers-driven article, but I’ve tried to remove the dryness a little…
As almost always, the Manhattan property market ended the year with strength. To us brokers who see property every day, the data is as expected.
Q4 2012 summary:
- According to Miller Samuel, Manhattan’s market data authority, the number of transactions was up 30 percent compared to a year ago. Fourth quarter 2012 had 2,598 transactions representing the highest number of fourth quarter sales in 25 years! This was driven by sellers wanting to close before 2013 because of the (then) uncertain tax impacts of 2013, a stronger economy and historically low interest rates.
- Overall property inventory for both condominiums and co-ops declined 34 percent compared to a year ago. As brokers, we have been seeing this lack of inventory situation the whole year. The market data just put a number to it. Lack of inventory is particularly prominent in the condominium segment where inventory declined 37 percent. The practical implication is that, for good quality condominiums, bidding wars become more common.
- The average price of a condominium was US$1.87 million, up 5.4 percent from last year, with an average price per square foot of US$1,301. The median price was US$1.15 million. The average number is higher because this metric is skewed by the large transactions (US$10 million +).
Manhattan investment – it’s a trophy brand
For Asian investors, the key difference between buying an investment property in Manhattan vs in Singapore or Hong Kong is that Manhattan is more stable. It won’t appreciate dramatically and there is no quick money to be made because there are relatively fewer investors and speculation. Global high-net worth investors nevertheless buy in Manhattan because Manhattan is a trophy brand and a safe form of diversification with strong international demand.
Wei Min Tan was recently featured in AM New York’s real estate cover story, What International Buyers Want. Sources for this article include Miller Samuel.