The Real Deal New York

Here comes the cold water: NYC resi market “past the peak”

Inventory and construction costs among obstacles: broker

November 12, 2015 01:25PM


157 West 57th Street in Midtown (credit: Lenny Spiro)

Not everyone’s bullish on the city’s residential real estate market heading into 2016.

“I’m telling clients – and not making public – that we think we are past the peak and they should get realistic and drop the price, take the bid and move on,” one major investment broker recently said, on condition of anonymity.

There are thousands of pricey, available residential condo units on the market, the broker told the New York Post – pointing to Gary Barnett’s decision to market a group of rental units at his One57 condo tower through Eastdil Secured at “a large discount.”

Developers are also watching the hotel market closely, the source said, as the hotel industry will react quickly to any changes in tourism and business in the city. Lenders, meanwhile, are reportedly asking for more equity from developers, while contractors are busier than ever – leading to higher construction costs as well as delays.

And there is also government regulation, with a mayoral administration that is perceived to be focusing on affordable housing and rent controls at the expense of free-market investment conditions. While Manhattan remains strong, the source added, secondary and tertiary markets are taking the hit.

So there you have it – depending on who you ask, the New York real estate market is either performing ‘remarkably’ or set for a downturn into the dumps. [NYP]Rey Mashayekhi