Manhattan apartment sales hit a high
Sales of Manhattan apartments have hit a fourth-quarter record, with wealthy international buyers competing with New Yorkers to get a foot in the door as prices soar.
The number of purchases rose 27 percent compared with the same period the year before to 3,297, according to new data released on Friday. Although down from 3,837 in the third quarter, this was the highest fourth-quarter tally since records began 25 years ago, according to appraiser Miller Samuel and brokerage Douglas Elliman Real Estate.
(Read more: New York is running out of luxury apartments)
Limited supply has led to buyers often making immediate all-cash offers, participating in bidding wars and making decisions based on floor plans alone, in an echo of the previous property boom. The number of days a property was on the market in the fourth quarter almost halved from the previous year to 95 days.
"Demand from foreign buyers has never been stronger. Those from the Middle East, Russia, South America, China have been on an incredible buying spree and it is these sales that are driving prices," said Pamela Liebman, chief executive of property broker The Corcoran Group.
The median price of a luxury apartment – usually above $3 million – jumped 10 percent from a year ago to $4.9 million.
(Read more: New York apartment prices hit four-year high)
An abrupt increase in mortgage rates over the summer tipped more buyers into the Manhattan market at a time when inventories were already tight, a trend that continued to the end of 2013.
"This wasn't a sleepy year end," said Jonathan Miller, president of New York-based Miller Samuel. "There was a lot of good economic news last year and people from New Yorkers to international investors were keen to secure the best buying conditions from mortgage rates to prices. It was a record third quarter and now a record fourth."
The second quarter of 2007 holds the record for Manhattan sales, when 3,939 apartments were sold.
The pool of homes for sale is shrinking as many owners wait for prices to rise further before they list. The number of homes on the market at the end of December fell 12.3 percent from a year earlier to 4,164, near all-time lows.
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And new supply is limited – developers hit by the financial crisis have only recently revived projects, which are often luxury residences sought by deep-pocketed local and foreign buyers.
The overall median sales price in the fourth quarter rose 2.1 percent from the previous year to $855,000. The increase was led by condominiums – largely accounting for the new developments that are the preferred choice of international buyers – which had a record median price of $1.3 million.
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"After the collapse of Lehman Brothers the construction pipeline stopped. Last year we saw the first developments coming to market," said Ms Liebman. These premium residential towers renowned for their exceptional views as well as abundant amenities have spurred stratospheric sales prices.
Although some industry watchers say a price slowdown looms as new properties come on to the market, others believe there is enough pent-up demand to drive prices even higher.
And the property that went for the highest price at the end of last year? A three-bedroom condo at 15 Central Park West – nicknamed the "hedge fund building" – with a prized view of Central Park, fetched a cool $25 million.