The Big Picture
Residential and Commercial vital statistics
By Melissa Dehncke-McGill
New York real estate rests at the zenith of a golden age or teeters on a precipice, depending on your point of view.
In uncertain market conditions, with rising rates amid record prices, a sense of context helps. This month, The Real Deal takes a look at the big picture trends in the Manhattan residential and commercial markets.
Looking back can be sobering. If you bought an apartment in 1987 for the median price at the time -- $375,000 -- you would have had to wait until 2000, a 13-year stretch, to see a price gain.
But if you bought five years ago at the median price, your property would be worth 34 percent more today.
Prices for Harlem and other uptown neighborhoods have shot up more than 330 percent in the last decade, but even more dramatic increases can be seen in the Downtown condo market. The average price of a Chelsea condo was $162,000 ten years ago. Today, it's $1.29 million, according to Jonathan Miller, whose appraisal firm Miller Samuel provides the industry's most cited reports.
"The low mortgage rates all along are what's been fueling this real estate boom," says Miller.
With the ranks of Manhattan's real estate agents growing, more agents are competing for a piece of the commission pie. The number of sales has come down since reaching more than 9,000 annually for three out of four years from 1999 to 2002, and is now in the mid-8,000 range. Still, that's an improvement over the 1990s as whole, with the number of sales averaging around 4,500 a year for that decade.
On the commercial side, you might be patting yourself on the back if you bought an office building in Midtown in the early 1990s, but not so much if you bought Downtown. Rents have gone up 42 percent in Midtown Class A buildings since that time, but have actually declined Downtown, according to Colliers ABR.
Last month, the Federal Reserve nudged up short-term interest rates for the seventh time since June, with rising rates expected to slow home sales after a bout of frenzied buying. Still, price records continue to be set throughout Manhattan, from trophy apartments to development costs for new projects.
Where prices and rates are heading--and at what pace-- remains uncertain, but history and experience show us that it's unwise to face the future without a sense of the past.
Residential vital statistics:
(Yes the last chart that deals with Units Completed is kind a hard to read... I hope you can make it out)
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