The average sales price for a Manhattan condo has grown by nearly $800,000 this decade, marching to $1,750,634 by the end of 2007, according to a report from brokerage Prudential Douglas Elliman and research firm Radar Logic. That’s an 89 percent increase from the year-end average in 2000, and is 17.8 percent above the fourth-quarter average in 2006.
Significantly, this upward march of condo prices included September 11. After the terrorist attacks, much of Manhattan’s residential real estate market softened amid a cascade of pessimism about the city’s ability to fully recover.
It has, of course. And one of the biggest signifiers of this recovery has been the dozens of sleek, shiny, amenity-laden condos, with thousands of units within, that have sprouted throughout the borough, from the northern reaches of Inwood to the tip of the Financial District, in the last few years. Condos remain literally monuments to confidence in New York, whether it be the confidence of developers and their financiers or, perhaps more importantly, the confidence of buyers, many of them foreign newcomers and many more still New Yorkers.
Condos account for about 25 percent of the for-sale housing stock in Manhattan, but they now account for half of the borough’s home sales. In the fourth quarter of 2007, condos accounted for nearly 49 percent of Manhattan’s home sales; in the third quarter, they accounted for 48 percent.
And some of these sales have been titanic, even for Manhattan, the island unto itself amid the national housing market downturn. Two of the three biggest apartment sales in New York City history have involved condos, and both sales closed in 2007. (The third was Rupert Murdoch’s $44 million co-op purchase in 834 Fifth Avenue in 2005.)
In July, one still-unknown buyer closed on six apartments in The Plaza for $51,539,180, according to city records. In September, the family of former Citigroup CEO Sandy Weill closed on the purchase of a $42,405,000 penthouse at Fifteen Central Park West, according to city records. (A co-op at 1060 Fifth Avenue was sold in late 2007 for $46 million, but that deal has yet to close.)
It’s such demand at such higher prices (condos, as usual, were much more expensive in the fourth quarter than co-ops, on average) has driven developers to build, build, build this decade. At the same time, the number of new Manhattan co-ops has dwindled to basically zero after peaks in the late 1980’s and in parts of the 1990’s.
The number of condo and co-op plans submitted to the state Attorney General’s office, which must approve them before sales can start, increased 300 percent from 2002 through 2006. Most of these plans involved condos.
Of course, the Manhattan condo market has cooled a bit. The median sales price was down slightly from the third to the fourth quarter, and sales dropped 27 percent. Also, the inventory of unsold condos on the market increased quarterly over 5 percent; and the time it takes to sell a condo rose 12.5 percent, on average, to 135 days.
For now, however–and one only need take a walk around virtually any Manhattan neighborhood and note the scaffolding and the billboard-like ads–condos continue as the residential choice du jour, as symbolic of Manhattan this decade as they are increasingly expensive.