Historic highs in luxury residential market

Real Estate Weekly, June 9, 2004

The luxury residential real estate market continues to experience rapid sales and low inventory according to a report by issued by Stribling & Associates, Ltd. and authored by president, Elizabeth Stribling.

"The motivation to remain in the city is stronger than ever, despite the competitive nature of the current real estate market," said Stribling.

The report states that inventory in the first quarter of this year is down 32% from a year ago, with prices in the super luxury market up as much as 28% over the previous year.

The average price of a two bedroom apartment in Manhattan has reached almost $1,150,000 in the first quarter of 2004. The report further cites a number of important market facts:

* Declining inventory and low mortgage rates have lead to increased and sustained demand for both co-ops and condominiums.

* The super luxury market, properties selling for more than $10 million, is especially active.

* Buyers competing in the New York City market must make more concessions, often settling for smaller spaces, due to low inventory and high prices.

* Buyers shut out of the competitive Manhattan market are choosing northern properties as an alternative to the pricier areas below 96th Street.

* Northern Manhattan neighborhoods such as Harlem, Hamilton Heights, Washington Heights and Inwood have seen dramatic price increases. Average sale prices in Northern Manhattan have risen 63% compared to 26% in the rest of Manhattan.

* Rentals have seen a modest increase due to dejected buyers especially in the super expensive rental category where inventory has dropped.

* Several new construction projects are open for sales in 2004 including 47 East 91st Street in Carnegie Hill, the Opus on the Upper West Side and 129 Lafayette Street, downtown.

Current indications do not point to a dramatic downturn in residential sales. Most real estate is owner occupied and unlike the real estate bubble of the 1980s the current Manhattan market is not overburdened by excessive development and too many co-op conversions.

"Faith in the value of real estate remains high," says Stribling and statistically, this statement rings true.