In 2014, a condo at New York City’s Billionaire Building, One 57, closed for a record-breaking $100.5 million. Now, developer Extell is scrambling to sell remaining unsold apartments in the West 57th Street tower and taking any means necessary: by furnishing them and calling them turnkey condos, by rolling back their price tags.
What the slowdown in sales in One57, and a whole host of other new NYC buildings, is indicating is that the real estate bonanza of 2014—which brought and is still bringing condos of unprecedented cost to the market—is over, at least on the buyer’s end.
Bloomberg dove head first into the new market condition, charting some of the major new developments that have started incentivizing prospective buyers to take the plunge with gift cards and other monetary agreements. At a "downtown tower," brokers are offering clients who sign deals before Labor Day $5,000 gift cards. At Extell’s Upper East Side condo The Kent, five percent discounts are being doled out for prospective buyers. And in the condo portion of World-Wide Group’s 252 East 57th Street, prices have been rolled back by more than $2 million to spur sales.
"There’s too much development being built at 2014 prices, and that buyer isn’t there. Conditions have changed quite a bit since then," Jonathan Miller of appraisal firm Miller Samuel (and Curbed columnist) told Bloomberg. "We’ve never had a buildup of housing inventory that has been so skewed to the high end."
The slowdown is reflected in sales stats of luxury properties. In 2016, contracts to buy Manhattan houses priced at over $4 million were 21 percent fewer than in the same period in 2015. And the properties that sold sat on the market an average of 291 days, or 54 more days than in the same time last year.
"Things will sell, they’ll just sell at lower prices," Donna Olshan, namesake of the Olshan Report that tracks luxury sales in Manhattan, told Bloomberg. "You can’t sit out there forever trying to sell one apartment a month."
So is it a buyer’s market? Sure, if you’re wealthy. "The next two years will be the year of the deal," Kevin Maloney, principal and cofounder of Property Market’s Group—who’s codeveloping one of NYC’s new supertall towers at 111 West 57th Street—told Bloomberg, "If you have cash, [Ed. note: notice the stipulation] I can’t imagine there’s not a condo project that’s coming out of the ground where you can’t walk into the sales office and say ‘This is the deal I’m willing to offer.’"