Friday, January 4, 2013

Manhattan 4Q 2012 Property Report

This morning, I had the pleasure of speaking to Jennifer Harrison of Property Life whose writing I found to be very real, entertaining and a lot of fun.  

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, a numbers-driven article but I'll try to remove the dryness a little...

As almost always, the Manhattan property market ended 2012 with strength.  To us brokers who see property every day, the data is as expected.  Here are the key  points:

1.  According to Miller Samuel, Manhattan's market data authority, 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.

2.  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.

3.  The average price of a condominium was $1.87 million, up 5.4 percent from last year, with an average price per square foot of $1,301.  The median price was $1.15 million.  The average number is higher because this metric is skewed by the large transactions ($10 million +).

For readers in Asia, 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 is relatively less investors and speculation.  Global high net worth investors buy in Manhattan because Manhattan is a trophy brand and a safe form of diversification with strong international demand.

Wei Min Tan is a Manhattan, New York property broker and Managing Director of Castle Avenue Partners.  He was recently featured in AM New York's real estate cover story, What International Buyers Want.

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