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Bubble Indicator: “Sell New York; Buy Cleveland.”

Posted on January 7, 2015

The average apartment price in Manhattan hit a record $1.72 million in 2014, as the New York wealthy and overseas rich continue to seek safety in the New York skyline.

While sales volume is slowing, prices continue to rise in New York as strong demand competes for historically low supply. The average sale price for the year topped the previous peak in 2008, of $1.591 million, according to a report from Douglas Elliman and Miller Samuel Real Estate Appraisers.

For the fourth quarter, average sales prices topped $1.74 million, up 13 percent from the fourth quarter of 2013.The median sales price for the quarter was up 15 percent from a year ago, to $980,000—the second highest for a quarter.

The surge in prices shows the high-end real-estate boom in New York is still robust as more wealth pours into coveted properties in the top global markets.

The biggest demand and price surge in New York was for new condos, a favorite of overseas buyers. Prices for new development jumped 17 percent over the past year, to an average sales price of $3.156 million, or $1,871 per square foot.

Demand is so strong relative to supply that half of all sales in the quarter were at or above the listing price—the most in six years, according to the report.

(For more on the madness of crowds, click the link.)