From the April issue: In the midst of the real estate downturn, reams of new condo buyers — facing job losses or simply spooked at the sudden drop in the values of their apartments — refused to close on their units. Equally spooked developers responded by sticking to their guns, refusing to return deposits that often reached six or seven figures. For a time, the resulting flurry of lawsuits and complaints to the Attorney General effectively crippled the new development market. While some developers are still taking a firm stance on deposits, others are starting to negotiate with buyers who want out of their contracts. Given the high cost of litigation and the long wait for resolution by the AG, many prefer to cut a deal with unhappy buyers and move on to the next sale. [more]

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From the February issue: The fourth-quarter market reports revealed that the recession’s worst-hit Manhattan neighborhood isn’t newly gentrifying Harlem or even the recently residential Financial District. Midtown — one of the city’s most well-established neighborhoods — saw the sharpest price decreases, the most price cuts and the longest days on the market. What happened? Experts say Midtown West, in particular, fell prey to a hotbed of speculation during the boom, fueled by an abundance of new condos, and the area is now paying the price. During the mid-aughts, thousands of new condo units were built in Midtown and quickly snatched up by investors eager to flip them for six-figure profits in the wildly escalating market of the time. Now, while overall market activity is on the rise again, falling prices have dampened demand from investors, leaving Midtown with an oversupply of condos — and absentee owners frantically trying to unload them. Around 42nd Street, “there are large, monolithic new development buildings, with a lot of investors and pied-à-terre buyers who are now desperate to sell,” explained Sofia Song, vice president of research at StreetEasy. [more]

From the October issue: When the buyer of a new development condo on the Upper West Side broke
his sales contract last spring, he didn’t regret forfeiting the
$250,000 deposit. By his estimate, the $2.5 million condo had lost far
more of its value — some $800,000 — since he agreed to purchase it. “He thought, ‘I’m losing less money walking away from my contract
deposit. I’m not going to throw good money after bad,’” said Steven
Sladkus, a partner at law firm Wolf Haldenstein Adler Freeman &
Herz, and the buyer’s attorney. So Sladkus was surprised to get a call from the buyer a few weeks ago
asking if the sponsor would sell him the unit after all — for the
right price.

Rolan Shnayder of Home Owners Mortgage, which has been lending in a number of new condo buildings that are less than half sold

From the October issue: New condos — the black sheep of the real estate industry for much of 2009 — are finally beginning to move again as construction progresses and developers find ways to circumvent stiff presale requirements for mortgages. For example, the Tempo condominium in Gramercy, which sat virtually buyerless for months after it went on sale in September 2008, sold 10 units this summer. In Lower Manhattan, District on Fulton Street sold 10 units in August alone. The Fairchild at 55 Vestry Street in Tribeca, which had sold only one unit in April and none in February or March, put five units in contract in August and even saw a bidding war, the developer said. “Deals are getting done at new developments,” said Stephen McArdle, the principal of brokerage Urban Marketing, which is handling sales at District. “We’re seeing activity. Six months ago you weren’t seeing anything. The fact that the bottleneck is open is very encouraging.”