From 2007 until last year, New York City saw a decline of new condominium development. The seven year decline is most likely attributable to the economic downturn and its aftermath. That phase is now behind us. According to the New York Times, at least 6,500 new units are expected across 100 buildings below 96th Street in Manhattan. This is a more than 100% increase from last year, which saw 2,500 new units across 59 buildings. A number of these new units will be in towers near West 57th Street, which are in the beginning stages of construction and expected to open sales later this year.
What does this mean in terms of condominium sales for 2015? Practically speaking, an influx of new development will trigger a reduction in sales prices. The increase in inventory signifies a move from a seller’s market to a buyer’s market. Yet, while the number of “entry level” units priced at less than $1,700 per square foot is also expected to rise, rising land costs means that selling at this price point equals very little in the way of profit for developers. Units in this range, then, will likely be in buildings that start at a lower cost basis or with land that was purchased a few years ago.
While this increase in development indicates good things on the horizon for consumers, a number of market-watchers have concerns that this many high rise, luxury condominiums going on the market at the same time may result in a slow-down in sales. This impact has already occurred at One57, the midtown luxury tower by Extell Development. Still other people do not see a problem and have hypothesized that international and domestic buyers may simply be waiting for the newest buildings to go on the market. Regardless of when they buy, they will certainly have quite a bit from which to choose.