A New York City real estate agency recently published its end-of-year report on our city's residential real estate market, and the news doesn't appear to be good for those involved in luxury properties. As the president of Olshan Realty, Inc. said, we are no longer in the "golden years of new condo development," which she describes as 2013 through 2015.
Other sources, including the Federal Reserve, have reported that 2016 saw a slowing in the sale of luxury residences in Manhattan, with more homes than people who can or will pay for them. That's good news for buyers, who can negotiate prices downward, but bad news for property owners and developers.
This may mean a move toward building more affordable housing in the city, since other segments of the real estate market, where prices aren't so high, have remained "mostly steady," according to the Fed.
Following are some of the findings in the Olshan report regarding New York City residential real estate:
-- The average length of time to sell a luxury apartment was two months longer in 2016 than in 2015.
-- Contract signings fell to $8.94 trillion (18 percent) in 2016 from the previously-mentioned "golden age." The fall was even steeper (25 percent) for apartments selling at $4 million and above.
-- In the "luxury market," condos have become more popular than apartments because of advantages like "freedom of ownership, new infrastructure, robust amenities, and some hip architecture…"
The Olshan report said that the decline in sales "reflects classic price resistance." As we've noted here before, New York boroughs like Brooklyn, Queens and Staten Island have become increasingly-popular in recent decades as New Yorkers have had to forsake Manhattan for housing that is within their budget.
With that movement have come renaissances in some of those areas that have eventually priced people out and into other areas. New York real estate developers and property owners, of course, have to stay attuned to the ever-changing market in our city.
Source: Business Insider, "The 'golden years' of New York City's luxury real-estate market are over," Akin Oyedele, Dec. 28, 2016