Developers of condos in Manhattan are responding to steeply escalating demand by raising prices on unbuilt units as often as twice a month, Bloomberg News reported.
At the same time that home sales hit a decade high in the fourth quarter, Manhattan’s inventory of homes for sale dropped to its lowest levels in at least 12 years, according to appraisal firm Miller Samuel. This gap has led to instances of rapid price hikes, such as the ones at the Walker Tower condominium site in Chelsea, being developed by JDS Development Group and Property Markets Group. JDS’s Michael Stern, who was recently profiled by The Real Deal, told Bloomberg News that he and his partners have raised prices on the under-construction units at the building 13 times.
“I didn’t let the market conditions of the day dissuade me,” Stern said of his 2009 acquisition of the site. “But I can’t say I thought prices would be quite as lofty as they’ve proven to be.”
At least 21 new condo buildings in Manhattan, comprising 1,188 units, saw price hikes in 2012, according to the office of New York State Attorney General Eric Schneiderman. The frenzied market, CORE’s chief executive Shaun Osher told Bloomberg News, is showing signs of returning to boom-era practices, such as buyers putting deposits on unfinished units. [Bloomberg News] —Hiten Samtani