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Manhattan’s Luxury Prices Hit New Record Despite Slowdown

Most expensive sale during the second quarter of 2016 was a condo at 432 Park Ave.

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View of 432 Park Ave., the tallest residential building in the world

Roberto Machado Noa / Getty Images
View of 432 Park Ave., the tallest residential building in the world
Roberto Machado Noa / Getty Images

Manhattan’s luxury sales prices hit a fresh record in the second quarter of the year despite recent evidence of a slowdown at the top end of the housing market.

New research by appraisal firm Miller Samuel on behalf of Douglas Elliman Real Estate found that the average sales price in Manhattan’s luxury market, defined as the top 10% of all co-op and condo sales, jumped more than 5% over the past year to $8.3 million.

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Much of the boost was due to luxury sales that had been in contract the last 12 to 18 months in some of Manhattan’s most expensive new buildings, such as 432 Park Ave., the tallest residential building in the western hemisphere. These pending sales closed in the second quarter, pushing average prices to a new high.

As a result, Jonathan Miller, chief executive of Miller Samuel, told Mansion Global that “new development closings more than doubled from a year ago and are nearly 60% of the luxury market,” while resales made up the rest.

More recently, there has been anecdotal evidence of a slowdown in the luxury condo market against a backdrop of an oversupply on the market and waning demand from nervous investors amid global economic uncertainty and the U.S. presidential election.

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However, there could be a brief period of respite on the horizon for desperate sellers whose properties have been languishing on the market as international investors could look to Manhattan for a safe haven in the wake of the Brexit vote.

“There is some benefit to the super luxury segment since London as a competitor is probably off the table for many global investors,” Mr. Miller said recently, although he stressed that this won't be a panacea. “New York super luxury remains challenged by over supply – with more supply coming – but it’s still a better outlook for the market, if only a nominal amount.”

This latest report came as a separate report by Compass, a real estate brokerage, said that it expects to continue to see record-breaking median closing prices in the coming quarters due to the volume of existing in-contract inventory, and despite domestic and global uncertainty around interest rates and the U.S. presidential election.

Average luxury sales price Average luxury price per square foot Number of days on the market Average luxury listing discount
$8.6 million $2,973 169 2.20%