H OUSING N EWS R EPORT
permits, developers nearly doubled the number of New York new building permits. In the first fourth months of 2016, builders added another 4,200 new building permits. But sales are starting to stall, especially in the supertall luxury high end market. You don’t have to look any further than Midtown Manhattan, along Billionaires’ Row, to see the kind of irrational exuberance that Manhattan developers have for the luxury condo market. At New York’s tallest and most expensive residential building, 432 Park Avenue, the tallest residential structure in Western Hemisphere, only 13 out of 141 units have sold, totaling $170 million in sales — that’s 9 percent of the building’s units and 5 percent of the projected $3.1 billion sell-out, according to The Real Deal. But here’s the problem: the average price of a Manhattan apartment is $2 million, while the average selling price at 432 Parke Avenue is $21 million — 10 times the price of an average Manhattan apartment. The median income for New York City is $52,737, according to the Census Bureau. That means only wealth foreigners can afford these luxury condos.
Other New York developers — JDS Development and Property Markets Group — are holding off on launching sales at 111 West 57th Street because the luxury supertall market is flooded with an over-supply of luxury condo units. With the luxury home demand slowing and new condos piling up, the developers of 111 West 57th Street have postponed sales for one year. “If the market were red-hot, people would be buying off plans, throwing checks down, and it’d be great,” Kevin Maloney, co- developer of 111 West 57th Street, told Bloomberg . “But if you have a market where you think marketing would be ineffective for now, why would you launch and spend the money? Wait.” Another top New York developer, Ofer Yardeni, CEO of real estate development firm Stonehenge, didn’t mince his words. Yardeni told the Daily News that the New York real estate market is a bubble about to burst. “If real estate was a publicly traded company and I could short its stock, I would very happily short 57th Street,” said Yardeni, referring to the cluster of supertall condo towers sprouting in midtown Manhattan. “The market there has stopped. It hasn’t
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New York City New Home Building Permits By Year
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
SOURCE: U.S. Census Bureau
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