New York Luxury Condo Prices Rise, But Transactions Drop in Q1: Report

Luxury DailyMay 22, 2014

A quarterly report from CityRealty found that average square foot prices for the top 100 condominiums in New York rose 19.4 percent from the year-ago period.


There were 169 total sales among the examined buildings in Q1, which represents a 7.6 percent drop from the first quarter in 2013. Part of the decline stems from a lack of inventory, and also from incessantly rising prices.


“I don’t see a lot that’s negative about [the luxury market],” said Pete Culliney, director of research and analytics at CityRealty, New York. “The robustness is stronger than the marketplace overall.


“The tight market is pushing down the number of deals that are closing,” he said. “People don’t want to cut their prices.


“We see waves come through, but it all has to do with a new building, or a new conversion coming to the market.”


The CityRealty 100 Report is a quarterly briefing on the 100 top condo buildings in New York City.


Scouting for land

The top sale during this period occurred at One Madison, where a triplex penthouse unit went for $43 million at $6,279 per square foot. At 15 Central Park West, a unit sold for $24 million at $8,693 square feet.


Fifteen Central Park West ranked as the most expensive building overall. Sales at the property averaged $5,944 per square foot. The following most expensive buildings include Time Warner Center, Residences at Mandarin Oriental, One Madison and Superior Ink.


Tribeca, the Flatiron District and the West Village all feature promising properties.


However, as inventory continues to fall, buyers and developers are beginning to consider traditionally overlooked neighborhoods, a trend that will increase and in many ways flatten out the city’s diversity.


Mr. Culliney said that neighborhoods throughout the city are being converted into luxury hot spots. New developments geared toward the ultra-affluent are going up and historic buildings are being transformed to fit the expanding amenity desires of luxury consumers.


Also, the number of units in buildings are shrinking so that developers can reap the maximum price per square foot. A large three bedroom apartment that sells for $7,000 per square foot brings in more than three studio apartments that sell for $2,000 per square foot.


“I think this shows a real fundamental change in the kinds of units that rate coming to market,” Mr. Culliney said.


Many properties are being marketed as ideal for art collectors, with an emphasis placed on capacious galleries, sturdy walls for hanging heavy pieces and outdoor space.


New-age amenities such as vitamin C-infused shower water at 66 E 11th St are also being pitched as differentiating factors.


On the rise

New luxury development projects in the NoMad, north of Madison Square Park, district of Manhattan indicate that the once-overlooked neighborhood is on the rise as other areas become squeezed.


Real estate firm Core recently closed sales for the residential condo 241 Fifth, commanding prices ranging from $820,000 to $10 million. Not to diminish the potential of other neighborhoods in the city, Core also wrapped up sales further up Fifth Avenue for the property One Museum Mile on the same day (see story).


“The level of safety, the diminished level of crime,” Mr. Culliney said. “These are things that add to why New York has become this kind of the market.


“Has it removed some of the gritty feel that everyone loves about the city?” he said. “To a certain degree.”