Building permits for new properties are on the upswing, meaning that new residential units will hit the market in the next several years. However, there won’t be enough apartments to meet demand, the New York Times reported. From January to October of this year, the Department of Buildings issued a total of 40 permits for new residential construction in Manhattan. These projects come with a total of 2,287 units, which is a 15 percent gain from the same period in 2011. Brooklyn saw a higher number: Permits were filed for a total of 2,756 units — up from 1,522 during the same period last year, the Times said.
But it’s still not enough.
“We have a dire need for new product and it’s not coming fast enough,” said Gregory Heym, the chief economist of Halstead Property and Brown Harris Stevens. Despite this year’s rise in permits, he added, “it’s not going to be a recovery until we get back to the long-term average, which is closer to 4,000 or 5,000 new units a year.”
This will bring about another trend, according to Heym: “With such a low level of inventory, you’re going to see prices start to rise more rapidly at some point, because there just won’t be enough apartments to go around,” he told the Times.
Permits in Manhattan reached their peak in 2008, before the collapse of Lehman Brothers in September, at 9,700 units. A total of 58 buildings are slated to open next year, bringing about 2,474 units to the market; however, none of those units are in Harlem or Upper Manhattan. According to Corcoran Sunshine Marketing Group, this is the highest number since 2007, when 8,052 units hit the market. [NYT] —Zachary Kussin