With new condominium inventory on the rise — but the number of signed contracts falling — developers shooting for high-priced sales may find that the cycle has passed them by, according to a new report.
The number of new condos on the market hit 5,936 units during the second quarter, up 35 percent year over year, according to Halstead Property Development Marketing. The availability included listed units as well as “shadow” units that are not officially listed for sale.
But even with more inventory on the market, there were just 350 contracts signed on new development condos during the quarter, a 23 percent drop from the prior year.
The two trends reflect the steady increase of new development projects in recent years coinciding with slow sales at some large projects, Halstead’s Stephen Kliegerman told the Wall Street Journal. Inventory levels have also balloooned thanks to several large-scale projects to hit the market, including Extell Development’s One Manhattan Square, an 815-unit tower on the Lower East Side.
The pipeline of new condos hitting the market in 2017 is 2,600, according to the report, slightly more than the 2,457 in 2016. Nearly 9,200 condo units came online in 2006, a peak year for new development.
According to the Halstead report, Brooklyn condo inventory fell to 620 units, a 28 percent drop from the year prior.