Despite fewer home sales, the average price of a New York City apartment has been pushed up by very wealthy buyers.
Sales like the $92 million apartment at 220 Central Park South last December have skewed the numbers, according to the latest data.
“New luxury development has a significant impact on the market,” said Laura Tomana, senior economist at the Real Estate Board of New York. “You have to take that into account when you’re looking at average numbers.”
According to the REBNY Residential Sales report for Q4 2019 released today, the average price of a city apartment was $985,000.
While the price went above $1 million throughout much of 2019, that’s still a five percent increase year over year from Q4 2018 when it was $938,000. The five-year average is $949,000 and five years ago (Q4 2014) the average citywide home was $841,000.
At 220 Central Park South alone, where units go for $35,000-$10,000 psf, there were 22 closings last quarter. The quarter before, there was one closing for $122 million. Earlier last year, hedge funder Ken Griffin paid a record breaking $238 million for a penthouse there.
If 220 CPS were removed from the equation, the average price of a home in New York City last quarter would have been $910,000 ($75,000 less).
At the same time, the total amount of money paid for home sales has declined to $9.9 billion – its lowest since Q4 2014. This is a 4.5 percent decrease year-over-year.
However, Tomana said REBNY is optimistic about the sales market based on a recent report it issued on broker confidence.
“We’re seeing renewed confidence from brokers about the year ahead,” she said.
Additionally, recent reports compiled by brokerages have indicated home sales are inching their way back up.
In terms of unit types, condos did better last quarter than co-ops and one-to-three family homes and the reason for this, REBNY found, is a supply issue.
There are simply more new condos and not many new co-ops and one-to-three family homes. Money paid for condos went up by nine percent year-over-year to $3.5B and average price went up by 10 percent.
Co-op sales declined in terms of the amount paid by 25 percent year-over-year to $1.8B. The average sales price of such units citywide decreased 10 percent to $688K. Staten Island is the only borough that experienced an increase in total sales consideration (20 percent), while transactions declined 17 percent year-over-year citywide.
The total amount paid for one-to-three family dwellings declined 15 percent year-over-year to $4.5B. The average sales price of such units decreased one percent to $833K. Manhattan was the borough with the greatest decline in average sales price, falling by 29 percent over the period while Brooklyn experienced a decline of eight percent. The average sales price remained relatively flat in the other three boroughs.
The REBNY report also shows that the amount of money for all the sales last quarter declined in every borough except the Bronx where it remained flat. Manhattan declined by two percent, Brooklyn by five percent, Queens by six percent, and Staten Island by 19 percent.
Citywide residential transactions decreased year-over-year by nine percent with a total 10,057 transactions – the lowest since Q1 2013. The total number of transactions also declined in each of the five boroughs.
Overall, transactions declined for homes valued at every price level. The volume of transactions for units under $1M declined by 10 percent. For units ranged $1M-$3M, the number of transactions decreased by four percent, while transactions in the $3M-$5M range decreased by 14 percent. Units over $5M decreased by 36 percent.
“New York’s residential market continues to adjust to a changing landscape,” said Paimaan Lodhi, Senior Vice President at REBNY. “Although citywide residential sales fell nine percent last quarter from the previous year, New York’s economy remains strong and we expect the market to stabilize.”