High-end NY Real Estate Market Surges
Posted by — March 19, 2006
After cooling off from a peak in 2004, the real estate market for luxury residential properties in Manhattan again surged at the end of 2005 -- and that surge has continued into February 2006, according to Stribling & Associates, a New York real estate firm that specializes in the sale and rental of luxury apartments, townhouses, co-ops, condos and lofts.
Kirk Henckels, executive vice president and director of private brokerage at Stribling & Associates, said in a statement, "Surprisingly, the luxury real estate market managed to add yet another record-breaking year to its upward and seemingly unending spiral. The pleasant surprise has been the surge in activity of the $20 million-plus market, which is not dependent upon salary or bonuses."
Stribling released a Manhattan luxury market report today. Among the findings:The lack of "trophy" quality inventory since last spring's peak resulted in fewer high-end sales in the third and fourth quarters of 2005. Due to new trophy inventory at the end of 2005, there have been at least five co-operative deals with asking prices at or above $20 million. Three contracts were signed since mid-December 2005 on trophy townhouses with prices ranging from $20 million to $40 million. These three deals plus the two previously signed $20 million-plus townhouses show that there will be five townhouse sales over $20 million in 2006, already tying those in 2005. The total sales of $5 million or more cooperatives came close to the $1 billion mark, increasing 19.8 percent to the $980.4 million in 2005 from $818.6 million in 2004. A total of 31 cooperative sales over $10 million in 2005 compared to 24 comparative sales in 2004. Stribling reported the $25 million sale of a 9,800-square-foot loft on Prince Street, "demonstrating the growing parody in prices of trophy properties uptown and downtown," the company reported. Of the 13 cooperatives priced over $10 million and signed by the end of January 2006, four were over $20 million, one of which was over $30 million, compared to the 16 signed by the end of January 2005, which also had four over $20 million. The volume of townhouse sales increased to 21.7 percent in 2005, totaling $775.6 million, compared to $637.1 million in 2004. Residential townhouse sales over $10 million increased to 22 in 2005 from 16 in 2004. A total of 35.6 percent of all townhouses sold for over $5 million in 2005 were downtown. Condominiums also had a strong sales year in 2005, according to the Stribling report, with a condominium trend of partial or total conversion of hotels into partly or fully residential buildings, including The Plaza, the Stanhope, The St. Regis and the Intercontinental. The Mark and The Drake are also rumored to be planning a similar strategy. The Plaza and 15 Central Park West are selling quickly with one contract at 15 Central Park West signed for $45 million, or $4,200 per square foot. The 165 Charles penthouse and two adjacent floors, facing the Hudson, sold for $35.1 million to a buyer from uptown. Downtown's highest townhouse sale totaled $11.27 million for a 12,000-square-foot, 44-foot-wide house on Bank Street, at just below $1,000 per square foot.
"The depth and breadth of this rally is uncertain, as it always is. There is a lot of cash in the market, an improved level of inventory so people have something to choose from, and a reasonably healthy economy. Given this scenario, the overall luxury real estate market should continue to follow the economy with modest, if any, price increases, except at the very top of the market where prices seem to be increasing rapidly," Henckels stated.