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News bulletin: The island of Manhattan—never firmly moored to Planet Earth—became fully detached in the second quarter of 2005 and is on its way toward the asteroid belt.
That, at least, is the impression one gets from a survey of Manhattan apartment prices that was released Friday. (Read farther to see why I’m not giving you a link.) The average price of Manhattan coops and condos was $1.3 million in the second quarter.
That's according to the Prudential Douglas Elliman Manhattan Market Overview. It was prepared by Miller Samuel Inc., an independent Manhattan residential appraisal company. Check that link around July 6, when it will be posted on the website. A rough cut was made available to reporters starting today.
It was just one year ago--the second quarter of '04--that the average price of a Manhattan apartment broke the million-dollar mark. Celebration ensued in certain parts of town. Now that prices are 30% higher, $1 million for an apartment sounds ... so ... 2004.
It's true that the average price is dragged upward by mega-deals, such as Rupert Murdoch's purchase of a Fifth Avenue penthouse once owned by the late Laurance Rockefeller for $44 million. But the median price (the one where half the sales were for more and half were for less) was a still-steep $775,000. (And has been rising about as fast.)
Remember, too, that these numbers include sales in less-expensive neighborhoods like Harlem, Washington Heights, and Chinatown.
If you have lots of children, think twice before selling your house in Casper, Wyo., and moving to Manhattan. The average price of a four-bedroom apartment in Manhattan in the second quarter was $10.6 million. (I suspect Rupert Murdoch's purchase temporarily inflated that number, since the first-quarter average was a comparative bargain at $6.7 million.)
So, is the island of Manhattan floating on a great, big soap bubble? Your faithful blogger at Hot Property asked Jonathan Miller (photo), president and CEO of Miller Samuel Inc., the appraiser. He said no. Not yet, anyway. The inventory of apartments for sale is down a bit, and mortgage rates remain low, he notes.
On the other hand, he does say that affordability could start to become an issue. Says Miller: "I'd say we have a couple more quarters before it's a concern."
Dear readers: Does this blog entry make any of you want to pull up stakes and move to Manhattan? (The pastrami is great here.)
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.