The housing market in NYC has seen a 98.5 percent increase in luxury condo construction since last year. Market experts are concerned there is not enough demand to meet supply, causing developers to build upper to middle-income housing instead.
As Julie Satow reports for The New York Times, the number of listed luxury apartments for sale in Manhattan during the past year has doubled (up from 742 units to 1,473 units). These luxury apartments are priced at the top 10 percent of the market, with listings for $3.25 million or higher. The saturated luxury condo market does not have enough interested buyers willing to pay for these expensive purchases.
As a result, writes Satow, "of this growing supply at the top end of the market, developers are packing up their tools and pulling out, while some others are reconfiguring their projects to focus on smaller units with lower prices. If the trend holds, the supply of condos coming to market in two to three years will look very different from what is for sale now — with many fewer apartments priced at $10 million and up."
Developer Stuart N. Siegel of Engel & Völkers New York Real Estate also echoed that the market is in the beginning of a transitional state. According to him, we are currently moving from unfettered pricing, and can expect a healthier marketplace in the future with greater discipline in pricing and valuation.
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