Reports of the demise of luxury real estate in Manhattan may have been greatly exaggerated — or perhaps just early.
Manhattan real estate prices set a new record during the first quarter, with the average price of an apartment topping $2 million for the first time in history, according to a report from Douglas Elliman and Miller Samuel Real Estate Appraisers & Consultants. The average price per square foot also set a new record, hitting $1,713.
Granted, sales have slowed. Though the total number of sales, 2,877, grew 8 percent compared to the same quarter last year, they slipped 3 percent compared to the fourth quarter of 2015. On a year-over-year basis, the number of sales has fallen for the past seven quarters. Meanwhile, listing inventory increased 5 percent over the year.
Yet housing experts say that Manhattan's real estate market largely held up given the volatile stock market and slowing overseas growth. While the very top of the market — apartments priced at $5 million or more — has slowed, the core market of apartments priced at $1 million to $5 million remains strong.
"What you have is the super-luxury high-end of the market, which started changing a year ago and is clearly slowing," said Jonathan Miller, president of Miller Samuel. "But in the rest of the market, demand is still elevated."
The number of closings for new developments nearly doubled, skewing overall prices higher. Many of those closings were for apartments sold more than a year ago for buildings that are just now being completed. Yet Miller said he doesn't expect a "condo cliff" where sales and prices suddenly drop off as the previous deals pass through the system.
"If we see anything it will be more gradual," he said.
Despite widespread fears about a flood of new inventory coming into the market, inventory of new development fell 44 percent over the same period last year.
And Miller said overall inventory of resale apartments — which make up the bulk of the market — is about 10 percent below historical norms. About half of all resales are selling for at or above the listing price.
"The resale market is still plagued by limited inventory," he said.
The most expensive apartment sold during the quarter was a 7,000-square-foot, five-bedroom home at 101 Central Park West, which went for $35.3 million. It was listed by Randall Gianopulos and Serena Boardman at Sotheby's International Realty.