New Yorkers love to complain about their city’s absurdly pricey housing market, and then keep paying the price. But there’s a point at which wildly expensive starts to feel downright outrageous—and it may have finally arrived.
A handful of brokerage firms are reporting today (Oct. 1) that the median sales price for an apartment in Manhattan in the third quarter of 2015 (July to September) climbed to roughly $999,000 (paywall), up almost 10% from the same quarter of last year. The last time the median sales price surpassed that was in 2008 (paywall), before the financial crisis hit. Douglas Elliman Real Estate also reports that the average price of a single square foot in the city has risen to $1,497—an 18% hike from the third quarter of last year, and the highest in decades.
Dottie Harman, the chief executive of Douglas Elliman, told the New York Times (paywall) that buyers of million-dollar apartments are not even getting “a lot of space” for that price.
In fact, a $1 million pad is somewhat of a budget buy compared to the city’s average. The mean (not the median) sales price of a Manhattan apartment is reported to exceed exceed $1,700,000, with many of the borough’s newer developments charging more than $3,000 per square foot.
Sky-high price points are partly thanks to the low supply of homes in Manhattan, which is dominated by renters. Rather than scrambling to sell their homes as prices rise, homeowners are holding onto their properties, fearing they won’t be able to upgrade to a better home for the same price. Building more apartments has only served to raise housing prices, with developers catering more to the influx of foreign luxury buyers as land values rise.
All this means that properties are flying off the market at breakneck speed—lingering unoccupied for only 40 to 70 days, on average. Potential buyers need not only to reach deep into their pockets, but to do it fast.
For a concrete sense of the wealth flooding the city, the most expensive apartment sold this quarter was a penthouse on the Upper East Side, which went for for $37.9 million (paywall).