Will the luxury ‘bubble’ pop?

When Zeckendorf Development’s triplex penthouse at 520 Park Avenue hits the market for a record-seeking price of $130 million next year, insiders will be watching closely, trying to glean insight about luxury real estate.

For good reason.

Concern about a luxury real estate bubble, once whispered, is now being voiced at full volume.

At the Urban Land Institute’s recent conference in New York, top developers hinted that the luxury bubble may be getting ready to pop. “I tend to think we’re kind of at the top of what really should be produced now,” said Bruce Beal, president and general partner of the Related Companies, speaking about luxury development in the 57th Street corridor. “It seems like we hit the goalpost last year,” added Robert Toll, executive chairman of national homebuilder Toll Brothers.

To be sure, the luxury market is currently going strong.

Olshan Realty’s luxury market report for the week ended Sept. 30 logged 30 contracts signed at $4 million and up, “closing out a record September, as well as a record third quarter.”

More recently, 20 contracts for $4 million and up were signed during the week ended Oct. 26, with new Downtown condos outselling the rest of the market.

Still, there are signs that things are slowing. For example, only two units at Extell Development’s One57 went into contract during the first half of the year, following no sales during the last three months of 2013.

According to real estate appraisal firm Miller Samuel, the luxury market’s inventory level rose 47 percent in the third quarter to 1,626 listings, up from 1,107 last year. Meanwhile, the absorption rate — meaning the number of months it would take the market to absorb all the for-sale product, at current sales rates — nearly doubled to 14.7 months, from 8.7 months.

In the third quarter, the average luxury sale price was $7.25 million, up from $5.4 million a year earlier. And Miller Samuel data shows that prices aren’t just getting higher at the top.

The entry point for the luxury market, which is defined as the top 10 percent of all sales, was $3.25 million in the period ended Sept. 30, up from $2.95 million a year earlier, according to the report. In part, that was thanks to new developments, which accounted for 7.2 percent of sales. The median sale price in new development projects was $1.63 million during the third quarter, compared with $1.44 million a year earlier.

But Jonathan Miller, president of Miller Samuel, predicted that “a lot of the product coming through — or product that will be coming through over the next year — is going to be smaller or somewhat smaller than what we’ve been seeing.”

“You’re not reading about new super-luxury projects being announced on ‘Billionaire’s Row,’” he noted.

Miller said that rising inventory and prices in the luxury segment have slowed the pace of sales. Further, new projects “coming through the pipeline seem to be less expensive [in addition to smaller] than what we’ve been seeing lately,” said Miller, whose company also consults with developers. In particular, new development prices are offering a wider price range.

“Going forward, I think there will be a realization — and it’s happening already — that you can’t build the same thing for the same customer,” said Leonard Steinberg, president of Urban Compass. “Not everybody wants to buy a $15 million, four-bedroom apartment. A lot of people can’t afford that.”

Steinberg said that well-heeled buyers are watching the market’s direction closely. He believes that developers, aware that the high-end segment is “getting too much of the same thing,” will try to break from the pack with great design and prices that are more down to earth.

“Quality doesn’t have to include the most expensive of everything,” Steinberg said, adding, “I think you’ll see a variety of price points going forward.” He predicted a batch of properties under $5 million, compared with the “proliferation of crazy expensive” properties priced at $10, $20, $30 and $40 million. “It’s called luxury affordable housing,” he said. “It’s on the horizon.”