Today several quarterly reports detailing the ups and downs of the Manhattan real estate market at the end of 2011 were released, and the headline, according to the Wall Street Journal, was a sharp decline in sales. Though apartments in Manhattan still sold for an average price of $1.445 million and a median price of $855,000 (about even with past reports), the number of deals fell 12.4% from the fourth quarter of 2010, and 35% from last summer. Part of that drop has to do with seasonality — the fourth quarter is typically the slowest real estate sales period — but the blame can also be pinned on a simple lack of supply. New condominium sales showed the deepest declines, and as the Journal writes, “Real-estate brokers noted that the supply of apartments on the market had been shrinking, especially for new condominiums, which showed the fewest listings on the market in several years.”
Is this lack of supply creating demand? It’s one of the major story lines to follow in 2012, according to Shaun Osher. CORE’s founder and CEO offered these predictions for the 2012 Manhattan real estate market, with the impact of new inventory being chief among them:
The NYC luxury market is an anomaly, and in 2011, that has certainly been true. This year, I expect that the pipeline of new development activity will supply product that will be readily absorbed (as long as pricing stays in line with the upper end of overall co-op and condo prices). The townhouse market has shown resilience above all other market segments as the value of owning a single family residence in Manhattan grows.
It’s not just talk. CORE has several new development projects, including the highly anticipated Walker Tower, readying for debuts in 2012. The market will be tested this year, certainly, but it’s ready for the test.
Graphics via the Wall Street Journal.