New Development Madness
We've all seen those dreamy homes on HGTV, architectural marvels, designer kitchens, walls of silent glass, views, terraces, closets the size of ballrooms.
About eight to twelve years ago Manhattan started seeing some enterprising developers squeeze this new type of housing stock between warehouses, rental walkups, old rundown lofts, enormous 1960s apartment buildings, and stately brick coops.We call them new developments but ones built and sold in 2004 really aren't all that new anymore.Â
In contrast to most of our more "authentic" housing stock, these new properties offer qualities that are appealing to every home buyer in every price range: airy, efficient, central HVAC systems, hardwood floors, designer finishes and appliances, wide foyers and hallways, big closets, higher than average ceiling heights, doormen, bldg amenities such as gyms, roofdecks, and cold storage for groceries. In addition, new development properties are, almost without exception, condominiums in a market with a tremendous scarcity of condo properties.
In mid 2008, before Lehman went bust, the City of NY eliminated the tax incentives to developers that has fueled rapid development from 2004-2008. Then Lehman crashed and we had a six month dip in our market from Sep 2008-Mar 2009 and a slow and worrisome recovery through 2009. There was almost no new development during this period. As we were recovering, the banks were also dusting themselves off and because of the losses suffered by overbuilding in other cities such as Miami and Vegas, banks put a halt to lending for highrise developments. Without lending and tax incentives, even established developers with land available to them and buyers demanding more properties, couldn't put the pieces together to build. Finally we started to see new applications for building about a year or two ago and the cranes started reappearing on our skyline.
Today's consumer wants to live in these posh new buildings, whether built in 2005, 2007 or 2010. They love the prestige. They love the pampered living. But today, the scarcity of these types of properties and the tremendous demand from buyers from all over the world, is pushing prices higher and higher on this type of property. The new developments that are going to launch downtown within the next 12 months are hitting the market at $2500/square foot and higher. A new development downtown that was built in 2007 and is almost fully sold has 3 units left at $1350-$1500/square foot so these new prices are really significantly higher.Â
There are some caveats to buying pre-construction or early in the construction process, not the least of which is obtaining financing. But we are finding today's consumer is often happy and capable of paying cash for these properties.
If you are hoping to find that exceptional modern condo in NYC, call me right away. There are still a handful left that can be had for yesterday's price...
...for me, I can't wait to see what tomorrow's prices will deliver in terms of interior finishes and service levels !