The average condo price in Manhattan has hit an astronomical $1,948,221 in the fourth quarter of 2015, reports Anna Scherbina.
According to Scherbina, starting in 1993 land values really take off and reach a peak in 2007. Manhattan land prices fell when the nation-wide real estate bubble burst in 2007, but by 2014, they had rebounded to an even higher level.
In addition to Janet Yellen money printing, what is the big driver of higher and higher Manhattan condo prices?
As has been the case for many U.S. cities, the supply of new housing in Manhattan is kept artificially low by various local zoning restrictions that control the height of new buildings and the population density in the area. The obvious beneficiaries of these restrictions are the current property owners. Low housing supply and high demand ensures that real estate investments continue to appreciate. (The unfortunate side effect is that rents rise with real estate prices, and renters increasingly find themselves priced out of Manhattan.) However, there is little chance that Manhattan zoning laws will be overturned any time soon.-RW