Manhattan real estate has one constant, and that's change. You can tell by walking the streets or, for the data geeks among us, by checking out the 61-page survey of a decade in co-op and condo sales, released today by appraisal firm Miller Samuel and residential brokerage Douglas Elliman.
We’ve slogged through it for you to find these three tips that will give you a better idea of what to watch out for in today's market.
Buy co-op, not condo
If you’re in the market for an apartment, ask yourself how important it is to buy a condo rather than a co-op—because for the same chunk of change, you can buy about 30 percent more co-op these days. (That’s compared to about 25 percent more co-op in 2004.)
While co-ops have always tended to be cheaper than condos, in the last decade the average price gap between the two apartment types has grown even wider, from a difference of $177 per square foot in 2004 to $299 per square foot in 2013.
“It speaks to the changing housing stock in Manhattan,” says appraiser and market analyst Jonathan Miller, president of Miller Samuel and author of the report. “The new product entering the market is luxury, and it’s skewing higher.”
The average price for a Manhattan condo skyrocketed 56.8 percent over 2004, to $1,285 from $873 per square foot. By contrast, average co-op prices rose a not-too-shabby 41.7 percent, to $986 from $696 per square foot.
Stop counting bedrooms
We all know Manhattan apartments are teensy-weensy, but if you’re in the market for a three-bedroom or four-bedroom, you should pay attention to square footage as much as number of rooms to ensure you get the space you want.
That’s because in the last decade, these supposedly larger unit sizes have shrunk, with three-bedrooms slimming down by about 750 square feet (to 2,000 square feet on average) and four-bedrooms by about 1,000 square feet (to 3,170 square feet on average).
That’s in contrast to studios, one-bedrooms and two-bedrooms, which have stayed about the same size in the last 10 years. In 2013, the average Manhattan apartment was about 1,270 square feet.
Over the last decade, developers have built apartments geared towards the growing number of families living in the city, but they’ve downsized the units themselves to bulk up their profits.
“The developer is trying to maximize the price per square foot of the building,” Miller says.
You snooze, you lose
Today’s market for Manhattan co-ops and condos is moving faster than it has in years. That means that if you’re a buyer, you should be prepared to move on a home immediately if you like it. If you’re a seller, you can generally expect to sell your home much faster than you would have a year ago—if it’s priced right—so make sure to have your next place lined up.
You can see evidence of this in the data: In 2013, apartments took an average of 121 days to go into contract from the day of their last price cut, compared to 172 days in 2012. The number of homes on the market fell in 2013 to the lowest level in 14 years, with 4,164 available listings. And the time it would take to sell all the available units fell to 3.9 months from 5.4 months a year ago.
All that has meant booming sales activity. In fact, the number of sales in 2013 reached the second highest level in a quarter century, hitting 12,735. (By contrast, in the four years following the economic crisis, sales bumped along the 10,000 mark. The peak for sales was in the boom year of 2007, when 13,430 co-ops and condos traded hands.)
In short, get ready for the “insanity that is the current market,” says Miller.