In the four-and-a-half years since the Manhattan condo/co-op market bottomed out, average prices have grown at about half the rate they did during the same time span leading up to the end of 2009. This time around, though, that growth is being pushed primarily by expensive luxury products, while the bottom 90 percent of the market churns out a slow recovery.
Since the average price of a Manhattan apartment hit the cellar floor at $1.3 million in the last quarter of 2009, prices have grown each quarter at an average rate of 3.2 percent year-over-year, according to data provided to The Real Deal by the appraisal and research firm Miller Samuel.
That’s compared to the average 6 percent year-to-year growth seen in the 18 quarters leading into the end of 2009. That first climb, however, was more evenly spread across the market.
During that time period the luxury market – defined as the top 10 percent of closing prices – grew an average 7.1 percent each quarter, or about a third faster than the 5.3-percent growth in the non-luxury market.
This time around the luxury market is growing an average of 5.4 percent – more than double the 2.1-percent growth seen in the non-luxury market.
Miller Samuel’s Jonathan Miller said the disparity reflects a new type of luxury product defined by larger spaces, more amenities and higher prices. –
“The reality is there’s a significant difference in the way the luxury and non-luxury markets are performing and why they’re improving,” he said. “In the luxury market it’s really about a new product type and more aggressive pricing, whereas with the non-luxury it’s sort of been a gradual, grinding sort of improvement really held back by tight credit.”