By Sarah Trefethen
Summer is hot, but not as hot as the New York City housing market, as pent-up demand continues to drive up the price of new condos in Manhattan and Brooklyn.
“There’s not enough on the market, coming to market, being planned to meet with the demand that’s out there,” said Andrew Barrocas of MNS.
New development inventory in Manhattan increased 148 percent between the first and second quarters of 2013, according to MNS, but sales volume went up even more — 161 percent. And the average price per square foot jumped by 6.5 percent, to $1,223.
In Brooklyn, total sales volume went from $82.7 million in the first quarter to $147.5 million, an increase of 78 percent. Inventory increased 85 percent, and there was a six percent increase in price per square foot across the borough.
Williamsburg ran against the trend of increasing price per square foot and saw a 19 percent drop, a change attributed to more construction in the less desirable areas of East and South Williamsburg.
In Manhattan, SoHo, the Lower East Side and TriBeCa were the neighborhoods that saw the greatest increase in sales.
It takes time for builders to respond to a recovering market. “The condo cycle is longer than the leasing cycle, so there’s a little more uncertainty for developers and lenders,” Barrocas said.
And what new development there is is concentrated at the luxury end of the market. “Anything less than $2,000 per month is affordable housing these days,” Barrocas said.
Lots of people are looking for a chance to buy in more modest sections of the market before interest rates increase, he said, but there’s very little out there.
Developers are responding to the demand for larger apartments in Manhattan, which can also command a higher price per square foot, and building more two and three bedroom apartments.
Between local New Yorkers and international investors, demand for luxury housing doesn’t seem likely to dry up soon, Barrocas said, noting that sales at 150 Charles Street were driven by New York buyers, not the international money he might have expected.
Prices at the new West Village development range from over $1 million for a studio to a penthouse currently in contract for $35 million.
The building was designed by Cook+Fox and developed by the Witkoff Group.