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Manhattan is unlike any place else and that goes for its real estate.
Prices for condos and co-ops continued to climb in 2007, ending the year with a bang. Three reports released Jan. 3 show that Manhattan apartment prices increased in the fourth quarter compared to the same period a year earlier.
The fourth quarter median sales price jumped 15% to $915,000, according to The Corcoran Group’s report. It increased 14% to a new record of $828,000, according to according to data provided by Brown Harris Stevens and Halstead Property. Prudential Douglas Elliman’s quarterly report showed a more modest 6.4% increase and a median sales price of $850,000.
All the reports indicated that the most dramatic increases were in the luxury segment. New York has bucked the national trend thanks to its limited supply of homes, wealthy buyers who are less reliant on mortgages and growing demand from foreigners who are looking for opportunities to take advantage of the weak dollar.
“The fact that price appreciation is as strong as it is is surprising,” said Gregory Heym, chief economist for Terra Holdings, the parent company of Brown Harris Stevens and Halstead Property. “We haven’t been affected by so many of problems that have affected other markets.”
Apartment sales dipped 1% to 2,531 in the fourth quarter compared to the fourth quarter 2006, Heym said.
Jonathan Miller whose appraisal firm does the analysis for the Prudential Douglas Elliman said the market could see a slowdown this year if Wall Street bonuses are off. Layoffs at financial firms could also hurt demand for Manhattan’s pricey real estate. Brooklyn is a relative bargain, but prices there have also been on the rise. The median sales price for a Brooklyn apartment rose 7 percent in the fourth quarter from a year earlier to $590,000, according to Corcoran.
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.