By Konrad Putzier
Amid the countless reports of record prices in Manhattan’s residential market, one fact has received little attention: most buyers still appear to spend less on new apartments than they did in 2008.
Manhattan’s average apartment prices predictably reached record highs in 2014, according to a new report by appraisal firm Miller Samuel for Douglas Elliman. But that’s only half the story. The median sales price of $940,000 – although up since last year – is still below its 2008 peak of $955,000.
The median reflects the price paid by the greatest number of buyers. As such, it is a better reflection of the typical deal than the average price, which tends to get distorted by high-end sales. (For example, a $100 million sale on 57th street drives up the average price, but may actually have little to no impact on how much someone pays for a two-bedroom in Inwood.)
That is not to say prices haven’t skyrocketed. The median sales price has grown 9.9 percent over the past decade and reached its second-highest level in 26 years of data collection. Moreover, the median price may be lower today than in 2008 because people are buying smaller apartments. And of course looking only at Manhattan ignores the ballooning Brooklyn market, which is now the most unaffordable place to buy a home, according to research firm RealtyTrac.
Still, it is comforting to know that the typical buyer was once even worse off. Most housing experts believe the condo market will start to level off a bit in most of Manhattan and the priciest parts of Brooklyn in 2015 (while peripheral neighborhoods like Crown Heights or Harlem begin catching up). And with plenty of new development hitting the market after years of sluggish construction, the supply squeeze could finally ease up. According to Corcoran Sunshine, 3,845 apartments under $3 million will launch sales in 2015 – the highest number since 2009.
You may not read it in the headlines, but 2014 wasn’t all bad news for apartment hunters.