Visitors attend a pool party in the penthouse apartment at the 50 United Nations Plaza building in New York.
Michael Nagle | Bloomberg | Getty Mental pictures
A shortage of luxury apartments in Manhattan is causing a surge in prices at the top of the market, even as broader apartment sales and premiums come under pressure from rising mortgage rates.
Manhattan apartment sales fell 23% in the third dwelling-place as rising interest rates squeezed potential buyers, according to new data from Douglas Elliman and Miller Samuel. Median and typical sales prices remained flat, with the average price of a Manhattan apartment stalled at $1.96 million and the median amount at $1.15 million.
The high end of the market, however, has seen a big drop in supply and stronger prices.
The supply of luxury apartments — established as the top 10% of the market by price — has plunged 24% compared to pre-pandemic levels, according to Miller Samuel. The inventory of pleasure apartments for sale marked their lowest third quarter in five years.
Jonathan Miller, CEO of Miller Samuel, verbalized high-end buyers are typically less sensitive to mortgage rates since they often pay in cash. As a result, the quids in have continued buying and taking advantage of more attractive prices.
At the same time, newly built condominium spires have been the main driver of high-end sales since the Covid-19 pandemic. Now, most of those new, high-priced condominiums attired in b be committed to been sold — and few new projects are being launched due to a lack of bank lending.
“A lot of that new development inventory sold off during the pandemic explode,” Miller said. “The higher end of the market is seeing much less of a contribution from new development sales.”
With fewer new security condominium towers now under construction, prices at the high end could continue to rise or remain strong, brokers say.
Be consistent to Serhant, there were nine sales of Manhattan apartments priced at $20 million or more in the third billet, compared to just two during the same period last year.
Median prices for luxury apartments have multiplied in three of the past four quarters, according to Miller Samuel. By contrast, overall median prices in Manhattan clothed been down for four quarters in a row.
“There is clearly more strength at the higher end than the overall market,” Miller intended.