Home prices in the Manhattan condo market reached an all-time high in August, and are now nearly 7 percent higher than their previous peak in September 2007. Lack of inventory remains a key driver in condo price gains, according to the August StreetEasy® Manhattan Condo Market Report.
The total number of condos listed on the market in August fell by 4.6 percent from July, an expected slowdown that occurs during the summer months. Inventory remains 18.9 percent below the five-year average for Manhattan. In an encouraging sign for buyers, August inventory was 5.8 percent higher than a year ago, marking the third consecutive month inventory exceeded 2013 levels (see Figure 1).
According to the StreetEasy Condo Price Index (SECPI), Manhattan condo prices increased by 0.4 percent since July, surpassing the previous record high set last month. August represents the highest price reported since StreetEasy began tracking the market in 1995. Condo prices remain 8.4 percent higher than prices in August 2013 and are 6.7 percent higher than the previous market peak in September 2007. Prices are predicted to see little movement in September (0.1 percent), according to the StreetEasy Condo Price Forecast.
“Buyers hoping that the Manhattan condo market would cool by the fall may be in for disappointment as August data points to more of the same from spring and summer 2014: less inventory and higher prices,” said StreetEasy Data Scientist Alan Lightfeldt. “Without a substantial reversal of Manhattan’s two-year long inventory drought, sellers will continue to have the upper hand and buyers should not expect to see much relief in either prices or heated competition for the limited supply on the market.”
Among the four submarkets within the borough, condo prices were the highest in Downtown, which has outperformed Manhattan every month since October 2005 as measured by the SECPI. The Upper East Side saw the highest month-over-month increase in prices (2.6 percent). There was a similar monthly rise in prices on the Upper West Side, where prices grew 1.8 percent. Midtown was the only submarket to see prices ease in August (-1.3 percent) as inventory growth there significantly outpaced the rest of the borough.
Condos that went into contract in August spent a median of 63 days on the market, unchanged from July and 7 days longer than this time last year. At the previous market peak (September 2007), condos spent nearly double the amount of time on the market (112 days) before they entered into contract.
The full report, including a neighborhood breakdown of StreetEasy Manhattan Condo Market Report data and additional analysis, can be viewed at streeteasy.com/market/reports.