After a very strong first quarter, the NYC real estate market settled down into a slower pace. Douglas Yearley, CEO of luxury builder Toll Brothers called this “the best spring selling season we have had in over 10 years” on their 2nd quarter earnings call, which ended on 4/30. For much of May, the feeling around the office is that this spring has not been as busy as one would expect. This month there were a total of 437 condo closings in Manhattan, compared to 473 in April. The Median Sales Price also decreased from April’s 1.99mm to 1.84mm. One interesting thing to note is the increasing discount between the final sale price and the initial asking price. In May, the median discount from initial ask is 10%, compared to 8.5% in April. Marketing time is averaging around 3 months. These metrics point to a normal-paced market where informed buyers take their time to negotiate the right deal and realistic sellers come to terms with the right market value.
As we have been saying the >5mm segment is weak, it is now reality that developers are targeting buyers who are willing to spending $1800-$2400/sqft on a new condo. In May, prices on closed new development indeed range between $1800-$2200. The average asking price for new development has been steadily trending down over the last 2 years. According to Corcoran Sunshine, which tracks new buildings, 5 of the 7 Manhattan developments that opened this year are targeting a mid-market range of $1800-$2400. A far cry from the days of $3000-$4000/sqft. Email me for new buildings below $2000/sqft. If you are interested in becoming equity partners in boutique new development projects, please also email me.