Shortage of 'Unaffordable Housing' in NYC
Market reports released last week for the first quarter of 2013 in New York were nothing short of impressive. There is record low inventory and high demand. There are buyers out there looking for that perfect New York home and fewer sellers. This has held true for all market segments, from the trophy properties to the more modest ones.
Not long ago I could not have imagined that it would be a challenge to find qualified buyers their New York dream pad. But in these past couple of months, it certainly has been. We have what my esteemed colleague Kirk Henckels calls "a shortage of unaffordable housing."
Once again we have a resurgence of competitive bidding for intelligently-priced quality properties, as buyers who qualify for a home mortgage want to take advantage of the record-low interest rates. Inventory is down 16.9 percent from a year ago and quality homes are selling rapidly and for compelling prices.
Let us focus on the luxury market--properties in the $5 million-plus range. According to the recently released Stribling Private Brokerage report, the 2012 numbers for $5 million and over New York townhouses and cooperatives broke all records. Indeed, they seem to have slightly surpassed the peak of 2008. Condominium sales have been similarly impressive. The number of signed contracts for condominiums in the first two months of 2013 was far higher than the same period in 2012. Condo resale price rose 3.8 percent from the prior year while new development median price increased by 27.9 percent.
A few sales have grabbed headlines. An amusing story which broke last week was about the Chinese mother who bought a $6.5 million apartment for her 2-year-old toddler, convinced that she would end up at either Columbia or NYU -- maybe Harvard. Other headline grabbing sales including two penthouse units at Extell Development's ultra-luxury condominium high rise on West 57th Street. They are rumored to be in contract for above $90 million, or just about $10,000 per square foot. At the peak of the market in 2008, top prices for trophy properties were in the $6,000 per square foot range.
Even at these stratospheric levels, the uber-wealthy around the world have been descending upon Manhattan in search of trophy properties to buy.
All this bodes for an exciting year ahead for me and the New York real estate market.Editor's Note: This is the first edition of New York Report, a column by Bahar Tavakolian, senior vice president of Stribling & Associates, a luxury property specialist in New York City.