The high-end development craze may be coming to a slight slowdown in New York City, but prices on for-sale units are still growing, according to CityRealty’s Manhattan New Development report.
While sales volume is rising and expected to increase further, the number of new developments isn’t necessarily pushing prices higher. Rather, the priority over the past eight years has shifted from higher quantity to quality – fewer apartments that can reap larger rewards due to their elevated price tags.
Anticipated sales for Manhattan new developments are expected to total approximately $30 billion through 2019, according to the report. They’ve already risen is years past, from $4.1 billion in 2014 to $5.4 billion in 2015. Aggregate sales for 2016 are expected to reach $8.4 billion and an estimated $10 billion in 2018 – and that’s only including future projects that have been filed with the attorney general or where pricing information has been made public.
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Manhattan development over the years
The average price for all Manhattan condos has steadily increased since 2005, with a slight dip occurring during the recession. Nonetheless, Manhattan fared well during the housing crisis despite the national financial situation.
New developments gained more traction in 2013, creating a slight gap grew between average price of new developments versus non-new developments.
In 2014, the average price of new development condos grew to $4.8 million, then softened slightly the following year at $3.7 million. However, CityRealty says the average price should rise again to $4.4 million in 2016 and continue growing in the years ahead.
New development unit sales reached a high in the fourth quarter of 2015, at 649 sales. In the first quarter of 2016, sales dipped to 596.
Manhattan held the most condo sales, both new development and non-new development, back in 2007 with 8,523 apartments. At the time, new development condos made up 35 percent of those sales. The following year, new development sales grew to encompass 69 percent of Manhattan’s total 7,987 condo sales.
Sales softened during and after the recession, and the share of new development sales also weakened.
Now, however, the shares of new development sales are accelerating once again. In 2014, just 17 percent of all condo sales were new developments, and that share grew to 26 percent in 2015.
Where are new developments sprouting?
In recent years, Midtown was the hub for new development and construction. However, the Financial District is expected to overtake Midtown in new development by 2019, with a quantity of 1,251 in the Financial District compared to 1,229 in Midtown.
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Coming in third for most new developments, the Lower East Side will hold 912 new apartments by 2019. Riverside Drive/West End Avenue is expected to add 881 units, while Flatiron/Union Square will house 499 of Manhattan’s new condos.
Midtown West is expected to have the highest sales between 2016 and 2019 at $4.6 billion. Tribeca is in line for second with a projection of $3.8 billion in sales. At third, Central Park South could bring in as much as $3.1 billion, largely due to new development sales.
One of the highest anticipated sell-outs currently under construction is 220 Central South, with an estimated average price of $29.3 million per condo. The developer, Vornado Realty Trust, expects a total sell-out sales volume of $3.1 billion. Located in Billionaire’s Row at W. 57th Street, 220 Central South will house 87 units and is said to be the second highest priced condo complex behind 432 Park Avenue.
With an estimate average price of $12.7 million and a total sell-out estimation of $2.1 billion, a new development at 53 W. 53rd St. in Midtown is set to reach 1,050 feet. As a supertall Manhattan new development project, 53W53 will make a definitive mark on the skyline – and luxury buyers’ wallets.
