(NEW YORK, NY) -- Despite weakening market conditions in the second half of 2008, all three price indicators trended higher this year, each setting records. The average sales price for a Manhattan apartment was $1,591,823 this year, up 17.8% from the $1,351,621 average sales price record set in 2007. The increase was skewed by the surge in higher priced sales, especially from new development activity. This year also marks the twelfth consecutive annual increase in the metric over the previous year, beginning with the $399,501 average sales price in 1996.
Median sales price exceeded the $900,000 threshold for the first time, rising 11% to a record $955,000 from a record $860,000 in 2007. Median sales price has risen for 13 consecutive years beginning in 1995, when this metric was $207,500. Price per square foot was a record $1,251 per square foot, 11.7% higher than the record $1,120 per square foot in 2007 and the third consecutive year this metric has remained above the $1,000 per square foot threshold. Price per square foot has increased over the prior year for the past twelve years.
Listing Inventory Spiked as Number of Sales Declined
There were 9,081 apartments listed for sale at the end of 2008, 40.9% more than the 6,446 listings available for sales at the end of 2007. Inventory levels rose each consecutive quarter in 2008. The average annual level of inventory over the past decade has been 6,866 units, just above the levels seen in 2007. Listing inventory is currently at its highest annual level in the decade this metric has been tracked.
As inventory expanded, the number of sales declined. There were 10,299 sales tracked in this study, 23.3% below the 13,430 record number of sales in the prior year, but the second highest level in the more than twenty years this metric has been measured. In 1988, there were 5,423 sales, less than half the level of sales activity of 2008. The 2008 level of sales was higher than the 9,387 unit average annual number of sales over the past decade.
Despite the increase in average sales price, the decline in the number of sales caused a decline in overall market volume. In 2008, the volume declined 19.1% to $16,394,185,077 from $18,152,270,030 in 2007, but was still the second highest volume total in history.
Market Indicators Weakened as Inventory Expanded
It took an average of 143 days to sell a Manhattan apartment in 2008, 18 days longer than the 125 days on market in 2007. The annual average days on market of the past decade was 124 days, reflective of the sharp increase in listing inventory over the past year. The high mark for this metric was 146 days in 2006 and the low mark was 92 days in 1999.
The listing discount was 4.1% in 2008, up from 2.4% in 2007 and second only to a 4.3% listing discount in 2003. The rise in inventory levels correlates with a wide spread between list price and sales prices because of the increased competition among listings.