By Al Barbarino
A “major inventory shift” in Manhattan sent median prices and total sales volume plummeting in new development apartments last quarter, according to the latest data from MNS Realty.
Price per square foot values held steady, but a heap of new inventory made up of smaller units led to a 38 percent decline in year-over-year sales prices and a 33 percent decline from last quarter among new developments.
That pushed new development sales volume down 44 percent, from $670 million to $375 million. The decrease in pricing among new developments — defined by MNS as “arms-length first offering transactions where the seller is considered a sponsor,” and compiled using the Automated City Register Information System, a.k.a. ACRIS — is due to a shortage of larger units and greater numbers of studio and one-bedroom sales, said Andrew Barrocas, CEO at MNS.
“Larger inventory is in high demand, especially in established neighborhoods and up-and-coming family neighborhoods, where larger units have been snapped up rather quickly,” he said. “We’re starting to see that it’s certainly easier to find a smaller apartment.”
New development sales in Q4 of last year were given a boost by $3 to $4 million large apartment sales on the Upper West Side.
But last quarter, condos at the Gramercy development One48, with a median price of $750,000, accounted for 20 percent of sales; combining with lower-end Harlem apartments which accounted for 15 percent of sales to drive median pricing down.In all, studios and one-bedrooms accounted for 50 percent of first quarter inventory, compared with 37 percent in Q4, as median prices dipped from $1.5 million to below $1 million.
Only 1,000 to 1,500 new units are expected to come to market in the next year or so, said Steve Rutter of Stribling Marketing & Associates, speaking at Real Estate Board of New York’s Residential Downtown Committee Roundtable event.
Buyers need to be prepared to pay full price and should expect that developers will not be offering incentives like closing cost credits, he said.
Ppsf was down only one percent from last year and six percent since last quarter, according to the data from MNS, suggesting that value has been retained.
The lack of larger inventory has created a supply and demand crunch, as families look to move into the city – a safer and more dynamic place than it once was for children – and foreign buyers, looking for a safe haven to invest, compete for similar properties.
“People are raising families more in New York than ever before,” Barrocas said. “There’s certainly a shortage of inventory and big demand.”