Manhattan Property Market Heating Up
iNVEZZ.com Wednesday, July 3rd: Manhattan has become a battle zone for apartment buyers fighting over an ever-shrinking supply of properties. According to data released on Tuesday, residential real estate listings during the second quarter — the peak selling season in Manhattan – have reached their second lowest point on record, while property investment demand has remained strong, thus boosting prices in the residential segment. The city’s commercial property market has also been on the up as of late, with office rents rising to a four-year high, a separate report showed today.
**Home Prices Up 4.3% as Listings Dwindle and Demand Picks Up**
New York-based property appraisal and consulting firm Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report on Tuesday that Manhattan apartment prices had risen in the second quarter as buyers competed for a tight supply of properties in the busiest spring selling season since 2007.
The median price of all co-ops and condominiums that changed hands in the April-June period rose 4.3 percent year-on-year to $865,000, nearing the market peak reached in the second quarter of 2008, when the median price of an apartment in Manhattan was $1.025 million. Purchases increased by 19 percent to 3,144, the most for a second quarter in six years, as buyers snapped up apartments faster than new units became available. The number of assets for sale fell 31 percent to 4,795 — the second lowest in
more than 12 years of record keeping.
According to the president of Miller Samuel, Jonathan Miller, prospective buyers have been competing amid shrinking inventory, spurred by rising apartment rents and the fear that they would miss out on historically low mortgage rates, while the supply of newly constructed units has been thin, after builders halted projects following the credit crisis. He expects prices to rise further in the foreseeable future until there is a meaningful relief in inventory.
**Office Rents Rise 5% on Jump in High-End Leases**
In another sign of the current strength of the Manhattan property market, a report by US-based real estate services firm Cushman & Wakefield has shown that office rents in the city have risen to the highest in more than four years, supported by small financial firms signing pricier leases.
!m[Apartment Prices and Office Rents Rising ](/uploads/story/3617/thumbs/pic1_inline.jpg)
Asking rents averaged $61.81 a square foot at the end of June, marking a five percent increase from a year earlier and the first time since May 2009 that the average rate exceeded $60. There have been 36 deals for more than $100 a square foot this year, compared with 35 for all of 2012, Cushman said.
According to Melissa Bazar, an executive director at the brokerage, smaller financial companies and foreign banks were behind the recorded surge.
Manhattan’s office market is returning to health almost five years after the credit crisis caused leasing to stall and rents to fall over 26 percent between mid-2008 and late 2010. Demand has been growing among technology and media companies along with smaller securities firms, while the European debt crisis and concerns about regulatory changes have caused larger financial firms “to basically go on hold,” said Kenneth McCarthy, chief economist at Cushman