The price of a Manhattan apartment just hit a new record.
The average sales price for apartments in New York City jumped 15 percent in the first quarter to $1,773,523, according to a report from Douglas Elliman Real Estate and Miller Samuel. The average price per square foot jumped 16 percent to $1,363.
The report shows the continued strength of the high-end real estate market—especially among global buyers in the world’s top wealth centers. But it also shows that the building boom in trophy penthouses and ultraluxe condos may be overheating.
Inventory jumped 19 percent in the quarter for all apartments and listing inventory for condos soared 28 percent. As parts of Manhattan have become enormous building zones for giant glass condo towers, even more apartments are expected to come on later this year and next. The supply of new-development apartments rocketed 55 percent in the quarter.
Jonathan Miller, president and CEO of appraisal firm Miller Samuel, said there is now about a two-year inventory of apartments priced at $10 million or more. These levels are “fairly typical” for the high end, he said. But he cautioned that most of the apartments being built in Manhattan today are luxury units priced at $3 million or more, so the supply is likely to grow.
“What’s different about this building boom is that they’re building larger, more expensive units,” Miller said. “The concern is: are we building too much? Is the demand there?”
So far, the demand is strong, Miller said. Wealthy buyers continue to pour in from Europe, China and Brazil looking for value and a safe place to store their wealth. Even if the Russians pull back amid the Crimean crisis, demand from other buyers will more than make up the difference, brokers said.
“Demand isn’t changing,” Miller said. “In fact, the more uncertainty in the rest of the world, the greater probability you’d see more interest in New York.”
In Manhattan, downtown is the new uptown. Two of the top three sales by price in the quarter were downtown—a $51 million penthouse at Walker Tower on 18th Street and Rupert Murdoch’s $43 million penthouse purchase at One Madison.
According to data from Brown Harris Stevens, prices for apartments that are three bedrooms or larger downtown surged 64 percent in the quarter compared with a year ago. The average price for those downtown spreads? $5.4 million.