MANHATTAN RESIDENTIAL MARKET FINISHES 2016 STRONGER THAN LAST YEAR, ALLAYING FEARS OF DOWNTURN
December 28, 2016
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Despite record sales in the luxury market, properties like 432 Park Ave. have had to offer price reductions to lure tenants.
There are signs Manhattan’s residential market is finishing 2016 stronger than last year, according to The New York Times, allaying fears that the city’s luxury-apartment market is headed for a tumble amid a glut of multimillion-dollar apartments.
The average sale price for co-ops and condos sold in Manhattan during the year rose to a record $2.2 million, a price that equates to $1,886 per square foot. Last year’s average was $1.9 million at $1,735 per square foot.
In newly built apartment buildings, where the glut was feared to be worse, about 1,800 sales are expected to close this year, according to CityRealty, a data firm cited by The Times, up from last year’s tally of 1,464 sales. The average unit price at these developments was a record $4.9 million, slightly higher than the previous record of $4.8 million set in 2014.
“This is the one place in the world that continues to be a safe place to put your dollars,” said developer Ben Shaoul, the principal of the Magnum Real Estate Group, a builder of several luxury-apartment projects. “People need to move and they’re buying larger apartments.”
There are still signs of some headwinds. High-priced apartments are taking longer to sell, with properties priced at $9.5 million or higher spending a median of 187 days on the market as of November. That’s 37 days longer than last year and 100 more days than the average apartment in Manhattan.
Sellers of luxury apartments have also had to discount them to find buyers. At 432 Park Ave., buyers received price reductions averaging 10% this year, and in one recent closing, a penthouse on the 88th floor sold for $60.9 million to money manager Lewis Sanders and his wife—a 20% markdown from the original ask. The penthouse on the ultraluxury tower’s top floor also closed in September for $87.66 million to the Saudi retail magnate Fawaz Alhokair. That deal also appeared to reflect a price cut. When the unit went into contract three years ago, its price was reportedly $95 million.
“We are negotiating—we want to sell apartments,” said Richard Wallgren, the executive vice president for sales and marketing at Macklowe Properties, 432 Park Ave.’s developer, along with the CIM Group. “We’ve already had significant price increases over two to three years, so there’s plenty of room to be negotiating.”
By Daniel Geiger NYT
