NEW YORK (Reuters) - A boom in newly built luxury apartments in Manhattan has skewed prices for the overall residential real estate market in the borough and masked a sharp drop in transaction volume over the past five years, a property report on Wednesday showed.
The number of apartment sales priced above $10 million has doubled since 2013 when the post-crisis recovery was fully in swing, CityRealty’s 2017 Year-End Manhattan Market Report said.
The number of units that sold for less than $1 million plunged by 35 percent over that period, the report said.
The super wealthy have tilted condo prices in Manhattan, marking a dramatic change from the pre-crisis building boom, said Gabby Warshawer, director of research at the CityRealty real estate listings and data website.
During the mid-2000s, developers constructed a record number of new condo units in Manhattan but prices were generally not higher than the average for existing condos, she said.
In the past five years, however, Manhattan has seen a different kind of development boom. Prices for these units are higher than they ever were before but the number of units built and sold is way off levels achieved a decade ago, Warshawer said.
“As prices have risen, less of the market share is comprised of cheaper units,” she said.
In 2013, 7,787 units were sold for under $1 million for a total $4.7 billion in sales. This year is projected to end with 5,040 units sold at under $1 million for $3.4 billion in sales.
Units sold at 432 Park Avenue, a 96-story tower marketed by developers as the tallest residential building in the Americas, garnered the most number of sales in a listing of the 25 highest-priced condos, CityRealty said.
The two highest priced sales were also at 432 Park Avenue for $65.7 million and $65.2 million, respectively.
The median sales price of high-end apartments edged higher in 2017, but the closely watched average square-foot price slid a bit for condos as prices leveled off after years of heady growth, the report said.
While the average and median sales price for all residential units has jumped since 2007 by 61 percent to $2.2 million and 44 percent to $1.2 million, respectively, transaction volume is off 30 percent from peak activity a decade ago, CityRealty said.
CityRealty examined sales registrations from the city’s Department of Finance. Much of Harlem and nearby areas were excluded because its market size.
Reporting by Herbert Lash; Editing by Sandra Maler