While the glitz and glamour of New York City, and Manhattan in particular, have appealed to buyers wishing to live in a place made famous by movies and television shows, a new reality for the borough’s high-end property market may be setting in. Bloomberg reported that it looks as if Manhattan’s luxury residential market is heading towards a full-scale slowdown.
The biggest indicator that the market is bracing itself for a downturn is the fact prices are being cut and luxury units are sitting on the market for some time, according to Bloomberg research that studied condo units in Manhattan currently listed at more than USD20 million on the website StreetEasy.
It was noted that 12 of these units had their prices reduced by five percent or more during the past few months with some units sitting on the market for more than 250 days. In addition to this, some developers are reconfiguring a residence to create two residential properties instead of one large unit.
And it is not just buyers who are holding off on buying units in Manhattan, developers have taken note of recent developments and are being more cautious with launches. The website noted that the developers who purchased Manhattan’s Sony Building with the intention of turning it into an ultra-luxury condominium decided to sell the building instead of going through with the project.
In addition to this, it was pointed out that some developers are finding it harder to obtain financing to build luxury condominiums with Extell Development admitting to Bloomberg that they were struggling to get the construction financing necessary for its One Manhattan Square project.
Another indication that Manhattan’s luxury condo market may be slowing down is the fact land sales in the borough are drying up. Ariel Property Advisors, a NY-based brokerage, pointed out only 48 land deals were completed during the first half of 2016. This is significantly less than the 79 land sales recorded during the first half of 2015.