New York is running out of luxury condos

Wealthy foreigners buying up NYC condos
Wealthy foreigners buying up NYC condos

The records keep piling up for Manhattan real estate.

The fourth quarter saw a string of records broken—from number of deals and average sale prices to dwindling inventory—as the rich from around the world scoop up luxury apartments as a store of wealth.

The average sales price in Manhattan rose 5.3 percent to $1,538,203 in the fourth quarter compared to a year ago. That marked the highest-ever price for a fourth quarter. The median sales price for condos is the highest-ever tracked, hitting $1.3 million.

And the inventory of apartments for sale has shrunk to its lowest level in recent memory, with a little over 4,000 apartments for sale.

144 Duane Street
Source: Douglas Elliman

The total number of sales surged 27 percent—a surprisingly strong increase given the rush in the fourth quarter of 2012 to do deals before the "fiscal cliff" tax changes.

"I think we're on a path for strong and sustainable growth this year as well," said Dottie Herman, president and CEO of Douglas Elliman.

(Read more: Manhattan apartmentsales hit a high)

While the overall market is on fire, New York is quickly becoming a tale of two markets—the soaring condo market and the lackluster co-op market.

The average sales price for condos surged 13 percent over the prior year to $2,115,228. The number of sales jumped 23 percent.

Yet co-ops—those storied preserves of Manhattan wealth and exclusivity—are being left behind. The average price for co-ops fell 1.6 percent in the quarter to $1,171,552, Elliman said.

(Read more: High rollers in a buying mood)

Brokers say the main reason for the difference is foreign buyers, who are virtually banned from the co-op market, since co-op boards often won't approve them and the overseas rich don't want to reveal their financials.

Plus, foreign buyers prefer the newly built, gleaming glass condo towers to the prewar co-op apartments of the past.

Mega-mansions: Super rich edition
Mega-mansions: Super rich edition

"The international buyer is only looking at the condo market," said Jonathan Miller, president and CEO of Miller Samuel.

And foreign buyers are driving much of the demand at the high end. Of the top 10 sales by price in Manhattan last year, not one was a co-op. Most were townhouses—and most were downtown.

(Read more: Which home will sell for $100 million in 2014?)

Miller added that the condos going up around Manhattan are larger than they've ever been, as apartment developers are catering almost exclusively to the very rich. The average condo being built is now 1,697 square feet—fairly large for Manhattan—and about 23 percent larger than last year.

"The product being built is substantially larger than anything we've seen in prior booms," Miller said.

Top 10 sales in Manhattan last year

144 Duane St.—sold for $43 million
18 Gramercy Park South—sold for $42 million
21 Beekman Place—sold for $34.4 million
41 East 70th St.—sold for $32 million
607 Hudson St., Apt. 9—sold for $29.8 million
15 Central Park West, 33D—sold for $29 million
12 East 76th St.—sold for $27 million
45 East 74th St.—sold for $26 million
15 Central Park West, 7C—sold for $25 million

—By CNBC's Robert Frank. Follow him on Twitter @robtfrank.