Tight Inventory Pushing NYC Apartment Prices Higher

NEW YORK CITY-The New York City multifamily market saw continued light sales volume in February, brought about in large part by the exceptionally strong sales volume posted in the closing months of 2012.

Shimon Shkury, president of Ariel Property Advisors, says, “It's important to note that in a normal market it takes 30 to 90 days to close a deal after a contract is signed. The expiration of the Bush tax cuts at the end of 2012 changed this dynamic as the vast majority of signed contracts required closings to take place before year-end.”

He adds that that sales activity on recent listings is robust and that multifamily prices are rising. “Bidding wars are back and many offerings are going above asking price as high demand confronts tremendously low inventory,” Shkury says.

According to Ariel Property Advisors' report on the New York City multifamily market for February released today, there were 28 multifamily transactions comprised of 63 buildings totaling $249.105 million in gross consideration, representing a 4% increase in transaction volume, a 2% increase in building volume, and a 22% decline in dollar volume compared to January 2013. In January there were 27 transactions comprised of 62 buildings totaling $319.182 million in gross consideration in New York City.

Compared to a year earlier, the February 2013 figures represent a 28% decrease in transaction volume, a 16% decrease in building volume, and a 42% drop in dollar volume.

Northern Manhattan led February in building volume and dollar volume as the area saw five transactions comprised of 30 buildings totaling $110.875 million in gross consideration. The majority of the sales total came from the trade of a $75-million portfolio of properties located throughout West Harlem and Washington Heights. Manhattan had a relatively light month with seven sales totaling $88.8 million in gross consideration. The Kushner Companies' purchase of seven East Village multifamily buildings for $49 million made up the bulk of this activity, the investment property sales firm states.