The Real Deal New York

New development discounts are at the highest level in years

Developers keep slashing prices amid the glut
October 08, 2018 10:00AM

(Credit: iStock and Pixabay)

Condo discounts are getting deeper.

As sales have slowed and buyers are shopping around, developers are slashing prices at a rate the market hasn’t seen in years, the Wall Street Journal reported.

The market reset, thanks to an abundance of supply, is driving down prices. At the same time, the number of closed deals has also slid. In the third quarter, new development sales were down more than 30 percent compared with the same quarter in the previous three years, the report said.

“Everybody today comes in and expects a discount,” Ziel Feldman, chairman and founder of HFZ Capital Group, told the Journal. He has half a dozen condo and co-op projects on the market.

The share of listings in new buildings with price cuts of at least 5 percent has grown during the past five years — to 8.7 percent, the highest figure since at least 2012, the report said.

Developers increasingly are also agreeing to take on closing costs, including the city and state transfer taxes of 1.825 percent usually paid by new condo buyers, the report said. And, in some cases, brokers who bring in buyers are offered a higher commission of 4 percent.

Some see it as a positive shift for the market. Douglas Elliman’s Frances Katzen said there’s no longer “shock and horror” over price cuts. “It bodes well for the market,” she said. [WSJ] — Meenal Vamburkar