Manhattan Buyers Face Tightest Inventory Since 2007, Condo Prices Surge Against Limited Supply

NEW YORK, April 1, 2014 /PRNewswire/ -- The Manhattan market continues to heat up as the spring home buying season nears, with overall median sale prices up 6.5 percent to $900,000 in the first quarter of 2014, and up 16.9 percent from this same time last year. This is the largest annual increase since the height of the market in Q1 2008. Paired with a six-year inventory low, this could signal a tough spring ahead for buyers, according to the Q1 2014 StreetEasy Manhattan Market Report[i].

New developments and re-sales both reported double-digit annual price increases in Q1 2014. Among re-sales, condo sale prices surged to $1.25 million, a 21.9 percent year-over-year increase. Co-op prices rose 14.3 percent to $680,000. Sale prices for new developments rose 50 percent year-over-year, but represented only 11 percent of closings in the quarter.

The significant rise in prices was fueled by the continued downward trend in inventory. At the core of tight inventory are extremely fast-paced sales, even for Manhattan standards. Average days on market for listed inventory was only 89 days in Q1 2014, the lowest average recorded since StreetEasy began tracking this data in January 1995. This is a 35.2 percent decrease from this same time last year when homes were listed for 137 days on average. Overall Manhattan inventory[ii] fell 13 percent in the first quarter compared to Q1 2013, to its lowest level since Q4 2007. Co-ops showed the largest annual inventory decrease (-18.6 percent), followed by condos (-7.3 percent) and single-family homes (-2.5 percent).

"What we're seeing is a discouraging trifecta for Manhattan buyers: higher prices, drastically lower inventory and higher interest rates, which is keeping some potential buyers out of the market," said StreetEasy Data Scientist Alan Lightfeldt. "We don't expect these double-digit price increases to last much longer before sellers are unable to find willing and able buyers. For buyers, be prepared for a challenging spring. You'll need to act fast."

Additionally, the total number of contracts signed in the first quarter of 2014 fell 9.3 percent from Q4 2013 and 15.2 percent year-over-year, an important indicator of interest in current price and supply of homes on the market.

The StreetEasy Condo Market Index (SECMI)[iii], which tracks Manhattan condo price movements over the past 15 years, rose to 2331 in Feb. 2014. This exceeded last month's previous index high and is up 16.3 percent since Feb. 2013.  

The full report can be downloaded at streeteasy.com/nyc/market/reports.

About StreetEasy:
Launched in 2006 and acquired by Zillow, Inc. in August 2013, StreetEasy is New York City's leading real estate resource, providing accurate and comprehensive for-sale and for-rent listings from hundreds of real estate brokerages in New York City. The site adds layers of deep, proprietary data and useful search tools that help consumers and real estate professionals navigate the complex real estate markets within the five boroughs of New York City.

About Zillow:
Zillow, Inc. (NASDAQ:Z) operates the leading real estate and home-related information marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. Zillow's brands serve the full lifecycle of owning and living in a home: buying, selling, renting, financing, remodeling and more. In addition, Zillow offers a suite of tools and services to help local real estate, mortgage, rental and home improvement professionals manage and market their businesses. Welcoming 70 million unique users during its peak month in 2014, the Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgage Marketplace, Zillow Rentals, Zillow Digs®, Postlets®, Diverse Solutions®, Agentfolio®, Mortech®, HotPads™ and StreetEasy®. The company is headquartered in Seattle.

Zillow.com, Zillow, Postlets, Mortech, Diverse Solutions, StreetEasy, Agentfolio and Digs are registered trademarks of Zillow, Inc. HotPads and Digs are trademarks of Zillow, Inc.

[i] The StreetEasy Manhattan Market Report is a quarterly overview of the Manhattan real estate market. The report data is aggregated from public sources by a number of data providers and real estate brokerages for all five major submarkets within Manhattan, with most metrics dating back to 1995. The reports are compiled by the StreetEasy Research team. For more information, visit streeteasy.com/nyc/market/reports. StreetEasy also tracks data for the five boroughs within New York City.
[ii] For-sale inventory is measured by all single-family, condo and co-op listings on StreetEasy that were available at any point during the quarter.  
[iii] The StreetEasy Condo Market Index is a repeat sales index that measures price movements among condo units in Manhattan that trade in an "arms-length" sale, excluding foreclosures, transfers, and income-restricted sales. Since the repeat-sales methodology tracks price changes over time in the same unit, the StreetEasy Condo Market Index controls for biases and errors created by variables such as location, size, age, and condition. January 2000 is used as the base period of the index, with a value set at 1,000.

SOURCE StreetEasy