Shrinkage: Total sellout on new condos $5.7B lower than ‘15

Aggregate price of condos hitting the market in NYC dropped 34.4% year-over-year: TRData

New York /
Sep.September 30, 2016 04:26 PM

Developers are finally taking off their rose-colored glasses. The target offering price of new condominiums approved for sale in New York City is down 34.4 percent year-over-year, despite only a slight drop in the number of offered apartments, according to a new analysis by The Real Deal of offering plans. The data shows just how much developers rolled back on ultra-luxury projects over the last year.

The New York State Attorney General’s real estate finance bureau approved 188 residential buildings with a total of 4,869 condo units through August 2016, for a collective total offering price of $10.92 billion. Compare that to the same period in 2015, when $16.64 billion in new condo offerings were approved across a similar number of projects, 187, and a similar number of units, 4,995.

“This trend makes perfect sense because it demonstrates what we’ve been hearing and seeing since a year ago,” said Jonathan Miller TRData LogoTINY, CEO of appraisal firm Miller Samuel. “Developers retooled their projects to better target the sweet spot of the market, which is the lower-end of the new development spectrum, below $5 million, but especially between $1 and $3 million.”

In Manhattan, however, both the price and number of new apartments fell significantly.

There are 2,014 Manhattan condo units approved for sale so far this year, pegged at a total offering price of $7.8 billion. That’s down from 2,908 condos equaling $14.4 billion in 2015, a 45.8 percent drop in asking sales volume and a 30.7 percent drop in accepted supply.

“What you’re really seeing is an increase in the product from the stronger part of the market,” Miller said, characterizing the drop as more of a boost to the $1 million-$3 million supply stock than a loss to the greater condo market where many units are languishing on the market.

“Predominantly, it’s the type of product that’s changing,” said real estate attorney Pierre Debbas. Last year saw marquee new luxury developments hit the market, such as Vornado Realty Trust’s 220 Central Park South ($3.1 billion sellout), Hines’ 53 West 53rd Street ($2.13 billion) and Witkoff’s 111 Murray ($1.04 billion). This year saw the Related Companies bring two big projects to market, 15 Hudson Yards ($1.74 billion sellout), and 70 Vestry ($710 million) and Bizzi & Partners 565 Broome Street ($651 million). Lenders, too, are reticent to cough up funds for new luxury projects, sources told TRD, but are more open to financing projects that hit more affordable price points.

Queens and Brooklyn saw steep increases in the total offering price of new condo supply in the first eight months of 2016 compared to the same period last year. Brooklyn went to a total sellout price of $2.09 billion from $1.53 billion, a 36.7 increase in asking sales volume, and the number of condo units jumped 13.7 percent to 1,657. In Queens, the total sellout price hit $1.09 billion from $690.3 million, a 57.9 percent jump in asking sales volume and a 98 percent jump in new units to 1,158. (The Queens numbers, however, included PMG’s $394 million plan for 391 apartments in the tower at 21-10 Queens Plaza South, a project that PMG representatives told TRD earlier this year it planned to keep rental, despite getting the offering plan accepted. PMG and partner Hakim Organization have since put the development site on the market.)

“During this boom, the mantra was Manhattan is condo and Brooklyn and Queens are rental,” Miller said. “In Brooklyn one could argue there’s a shortage in new condominiums because so much effort has been directed toward the rental market,” he said.

Although he acknowledged the increase in activity in Brooklyn and Queens, Shaun Pappas, a condo attorney at Starr Associates, said he doesn’t expect overall condo development to tilt the way of the outer-boroughs anytime soon. “It’s hard for me to bet against Manhattan,” Pappas said, emphasizing that there was no shortage of money coming from overseas in the post-Brexit universe. “I think more money is going to flow into the Manhattan market over the next few years as the European markets kind of shake themselves out.”


Related Articles

arrow_forward_ios
Quay Tower at 50 Park Drive and Ryan Serhant (ODA, Getty)
Ryan Serhant’s brokerage takes over sales at Brooklyn Bridge Park condo
Ryan Serhant’s brokerage takes over sales at Brooklyn Bridge Park condo
A rendering of One Boerum Place with Avery Hall Investments' Avi Fisher (top) and Brian Ezra (SLCE Architects, Avery Hall Investments)
Shifting gears: Brooklyn condo tower to debut as rental
Shifting gears: Brooklyn condo tower to debut as rental
Lionel Messi and photos of the Regalia unit (Getty)
Goooooool: Lionel Messi’s family scores condo in South Florida
Goooooool: Lionel Messi’s family scores condo in South Florida
Bella Hadid and 63 Greene Street (Getty, StreetEasy)
Bella Hadid’s $6.5M Soho penthouse finds a buyer
Bella Hadid’s $6.5M Soho penthouse finds a buyer
Assemblyman N. Nick Perry and Sen. Brian Kavanagh (Getty, iStock, NY State Assembly)
New bill would force co-op boards to explain rejections
New bill would force co-op boards to explain rejections
323 East 79th Street with Spruce Capital's Robert Schwartz and Boomerang’s Marco Auteri (Google Maps, Elliman)
Manhattan, Elmhurst notch $83M in mid-market sales
Manhattan, Elmhurst notch $83M in mid-market sales
The soft market for luxury units has some developers hard up. (Getty)
Buyers taking advantage of New York City’s condo glut
Buyers taking advantage of New York City’s condo glut
70 Greene Street, Unit PH (Compass)
Buyer of $59M townhouse closed on $8M condo at same time
Buyer of $59M townhouse closed on $8M condo at same time
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...