The Marketing Directors: Manhattan Condo Prices Climb
- Jul 20, 2016
New York—The recently released 2016 Development Pipeline Report from The Marketing Directors, the national development advisory and master property marketing and sales firm, indicates New York condominium prices continue to grow. The average condo sale price has now topped the $2.39 million threshold.
What is the takeaway for condominium developers?
“Listen to the market and be thoughtful and realistic when designing and pricing product,” The Marketing Directors’ Director of Market Insights and Analytics Joshua Silverbush told MHN. “Do not assume you will achieve certain prices simply because you need to. Be patient in the $5 million to $10 million-plus price range. There is a lot for buyers to see, but if you have well-designed, well-located and well-priced product, they will come around.”
On the rental front, the residential neighborhoods of Manhattan Downtown, Midtown West and Midtown East have this year witnessed robust leasing activity and higher rental prices.
Manhattan’s surging condo and rental prices have led to a transformation of many enclaves in New York City’s outer boroughs, where an array of fresh, high-profile developments are rising from the ground.
Among findings in The Marketing Director’s 2016-19 Forecast and Development Pipeline, the rental market has stayed strong. Almost 11,850 New York City rental units are expected in the 2016-19 pipeline. Midtown West will see the most new apartment homes. There, 6,266 are expected, followed by Downtown Manhattan with 3,073.
In Queens, where most development is occurring in Long Island City, the period 2016-19 is expected to see 46 rental buildings with 11,859 apartment homes come to market. Williamsburg and Downtown Brooklyn are the leading Brooklyn neighborhoods for rental. Approximately 17,000 units are in the pipeline across the borough.
As for condos, the report found Downtown Manhattan has 2,844 in the pipeline through 2019. From 2016 to 2019, there will be a total of 7,845 condo units coming to market in all of Manhattan. Brooklyn will see 2,202 condo units through 2019. Long Island City will continue to witness development of new condominium projects; the 2016-19 period will find 759 homes across a dozen buildings being developed. Queens will welcome 1,737 condo units.
Primarily a condominium market, Flushing has three buildings with a total of 643 units in the pipeline. Meantime, Astoria and Staten Island are beginning to experience a substantial level of new construction.
Silverbush also delivered wisdom to developers of apartment buildings. “Many people are continuing to rent, especially with so much high-end condo product on the market, making this a desirable form of housing,” he said. “Just remember that development is expanding in every direction and renters have options. Be prepared to offer incentives if necessary in order to give your property the edge on the competition. And don’t be afraid to pioneer new neighborhoods. Very few areas are off limits at this point.”
The report portends several trends, Silverbush said. Among them are these. Well-designed condo product under $5 million will stay hot. Condo sales and rentals in the boroughs will continue to increase as buyers and renters consider new and varying areas to live. Some planned condo properties may become rental, due to it being a lower risk investment.
“Land prices will come down and developers will be able to build more affordable product,” he said. “We will eventually see more studios and one-bedroom condos being built.”