Big unit sales fuel surge in co-op and condo prices

Real Estate Weekly, Nov 13, 1996

The price surge - an indication of strengthening buyer confidence in the New York residential marketplace - highlighted the 1996 Third Quarter Edition of The Corcoran Report, a quarterly study analyzing conditions and trends in the city's luxury housing field.

According to the study, a total of 44 four-bedroom-plus apartments - the largest units tracked - were sold during the third quarter, compared to only 37 during the same period last year and the identical number (37) during the second quarter.

Two other factors also signaled a tightening marketplace. It took an average of only 157 days to sell an apartment during the third quarter - six days less than it took during the same period in 1995 - and buyers were able to negotiate only 8.5 percent off the last asking price compared to 10 percent a year earlier.

"With three-bedroom units in such short supply, it appears that a lot of those buyers have decided to go bigger," asserted Barbara Corcoran, chairman of the Corcoran Group. "As a result, we're seeing a steady increase in four-bedroom and million-dollar-plus sales on one end of the spectrum, and continued strong demand for studio and one-bedroom apartments on the other."

Other interesting findings contained in The Corcoran Third Quarter Report included the following:

On the East Side, large, expensive co-ops dominated third quarter sales. Purchases of four-bedroom-plus apartments were up 22 percent with a corresponding sharp increase in the number of transactions over $2 million. Negotiability tightened, indicating both buyers and sellers were more eager to close the deal.

On the West Side, appreciation continued as the average high, mid and low sale price rose by 6 to 7 percent. While there were nearly 30 percent more transactions over $1 million, there were actually fewer sales of 3 bedrooms, indicating a significantly higher average price tag for the larger homes.

Downtown, three-plus bedroom units found 24 percent more buyers than last quarter, while studio sales dropped 28 percent. The average loft sold a week faster and buyer confidence in the area remained strong, with average co-op prices moving up by 4 percent over the last quarter.

Condominium sales were particularly hot during the third quarter, with gains in all price ranges led by a 60 percent surge in sales between $1 million and $2 million. Studios were the most popular, with 50 percent more transactions, while larger apartments of 3 bedrooms declined in number by 22 percent. Trading was active and quick, with the average time on market down by three weeks.

Finally, the news was equally en a n the townhouse market, where the average West Side sale topped the $2 million mark for the first time. Citywide, townhouse sales remained steady and strong for three quarters in a row.