Bloomberg reports that Manhattan apartment prices hit a record in the second quarter. The average sale price of a Manhattan apartment is a staggering $1.87 million. The average price of a luxury apartment is $8.18 million—a 13% increase over last year.
Almost $2 million bucks for 1,200 square feet of living space—that’s more than 28X the median household income in Manhattan. Obviously the median household in Manhattan isn’t an apartment owner. Even for the folk who can scratch together a cool $375,000 for a 20% down payment, the monthly mortgage payment on the median Manhattan apartment is $85,000 per year (not including taxes and insurance).
Who is buying these high-priced apartments? According to Miller Samuel, a real estate consultant, demand is being driven by a vibrant local economy and rising employment. Probably, but years of zero percent interest rates likely have something to do with it too. I would venture to say there is quite a bit of demand coming from folk who have decided if they can’t make a buck in bonds, they might as well try their hand speculating in Manhattan real estate.
