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The New York and Southern Florida luxury markets had a strong start to 2022, and despite some general market uncertainty real estate faces today, agents in these markets have reason to remain optimistic, according to a report released Tuesday by New York City-based brokerage SERHANT.
The 2022 Signature Mid-Year Luxury report includes statistics, trends and highlights for the New York City, Hamptons and South Florida markets for 2022. It also features historic trends on luxury transactions priced at $10 million or higher, or “super-prime” properties.
The report, produced by SERHANT.’s Signature division, the brokerage’s luxury-specific division, was written by Garrett Derderian, SERHANT.’s director of market intelligence.
Garrett Derderian | SERHANT.
“The super-prime market in New York had a robust start to 2022,” Derderian said in the report. “It was the strongest first-half year since 2019, when an increase to mansion and transfer taxes took effect on July 1, which resulted in a flurry of activity in the first half of that year. Condos also sold at their fastest pace in years.”
“The super-prime market has proven more resilient than the market at-large, as buyers at this price point tend to be less influenced by the rapid rise in mortgage rates, although stock market volatility did begin to impact a percentage of luxury buyers toward the end of the second quarter,” he added.
In addition to New York City’s strong showing, the Hamptons also had a good start to the year, which, however, may soon be hampered by a lack of inventory, Derderian noted. In South Florida, Miami and Palm Beach were also impacted by low inventory, but demand for Miami is creeping up to Palm Beach’s recent popularity run that’s been going on for the last few years, he added.
Here are more of the details.
New York City
New York City has seen 130 transactions at $10 million or higher so far in 2022, with a total sales volume of $2.17 billion. In 2021, total sales volume on properties priced $10 million or higher during the first six months of the year was $1.26 billion — in 2020, it was $1.11 billion, and in 2019, it was $3.27 billion
There were 112 condo sales, which were up 84 percent year-over-year and 18 co-op sales, which were up 100 percent year-over-year.
On average, properties spent 203 days on market, down from 328 days in 2021. Broken down into property types, condos spent 194 days on the market (down from 342 in 2021) and co-ops spent 333 days on the market (up from 269 the year before).
The median condo price was $14.29 million, down 0.3 percent year-over-year, while the median co-op price was $11.25 million, down 9 percent year over year. Derderian explained those lower prices were partially due to fewer new development closings.
“Since the middle of last year, many super-prime listings, most notably on Billionaires’ Row, have sold,” he said in the report. “There are fewer new development trophy apartments available for sale today than past years, which skews the figures lower. It does not reflect a loss in real value, but does show where the concentration of sales is taking place.”
Contract signings were down from the same period last year — 127 contracts signed on $10 million+ properties in 2022 compared to 161 in 2021 — but Derderian pointed out that those figures are still ahead compared to historical trends from the last 10 years.
“While the number of trades is slightly below the records set in 2021, the number of super-prime condo contracts is 28 percent above the rolling 10-year average while cooperatives trades are down just 8 percent,” Derderian said. “Of course, super-prime cooperative sales have been in a general decline since 2010 when new development condos began to emerge as the product of choice.”
Downtown emerged as the most popular market for condos at 37 contracts signed, followed by the Upper East Side with 24 contracts signed. Meanwhile, cooperative buyers favored the Upper East Side with 12 out of 22 contracts signed, residing in that area.
“New York is consistently viewed as a stable haven for the world’s elite, and despite some instability, the market has been largely unphased,” Derderian said. “Given the limited number of shadow units left unsold and completion of all current Billionaires’ Row towers, the super-prime segment should remain stable in the second half of the year.”
The Hamptons
“The Hamptons is still having its moment,” Derderian said. “The market has been extremely active over the last two-and-a-half years as more buyers looked to purchase co-primary residences rather than vacation getaways.”
The tony market outside of New York had 32 super-prime sales during the first half of 2022, with the median price up 9 percent annually to $14.65 million and the average price up 33 percent annually to $20.88 million.
However, a lack of inventory has started to impact sales, since there are only so many turnkey properties available, which is what is most desired by buyers at this time, Derderian said.
“Most buyers across the Hamptons have little appetite to do major renovations in the current market given rising costs and supply chain disruptions,” Derderian said. “It simply takes too long to complete. This has driven up prices for move-in-ready homes.”
The Southampton region was most popular with 10 super-prime sales, followed by Bridgehampton and East Hampton, which tied for second place with six super-prime sales each. Bridgehampton was the priciest region with an average sales price of $27.85 million, compared to Southampton’s $27.2 million and East Hampton’s $16.93 million average sales prices.
South Florida
Low inventory contributed to a dip in sales in Southern Florida markets, but still left sales well above historic levels in the region.
There were 48 sales of properties priced at $10 million or more in Palm Beach, down 27 percent year-over-year, but still 109 percent above the rolling 10-year average.
In Miami Beach, there were 110 such sales, down 33 percent from the same period in 2021, but 129 percent above the 10-year rolling average.
Prices were down in both markets, but Derderian chalked that up to the size of homes that sold, which were smaller compared to the previous year.
Case in point, the average price-per-square-foot in Palm Beach hit a record $3,580, up from $3,125 the year before.
Contract activity across the region was strong, with 41 super-prime contracts signed (pending deals) in Palm Beach during the first half of the year, up from 40 during the same period in 2021.
“I cannot understate just how strong demand continues to be for super-prime homes in Palm Beach,” Derderian said. “As the world’s wealthy flock to the market, prices have reached astronomical levels, although appreciation is beginning to slow.”
Miami inched closer to contract activity in Palm Beach with 83 contracts signed on super-prime properties (pending deals), down 37 percent from 2021 levels, however, amidst limited supply.
“The greater Miami area has seen a flurry of luxury activity, rivaling that of Palm Beach,” Derderian said. “Prices are likely to climb further as more firms relocate to the region. Just last week, Ken Griffin announced he is relocating his investment firm Citadel from Chicago to Miami, citing a more favorable business and tax environment. Of course, with Florida not imposing a state income tax on its residents, many high-income earners have opted to move to the region given the continued flexibility of remote or hybrid work.”
