Concessions to "protect asking price"

2.5% discount mentioned in the article is a joke when the original ask was aspirational. I think the developers who were not able to more the inventory in a finished project have already chopped the prices. Toll brothers did that in their 28th and Park avenue project. If I remember correctly, the chop was 10-20% from initial ask. See 37 East 12th as another example of price chops. Also 17 East 12th sold 30-40% below initial marketing price of $3500 plus a sq ft. Smaller 2 bed room apartments (1300-1500 sq ft) are in short supply and do not see as many price cuts.

http://streeteasy.com/talk/discussion/42399-how-the-mighty-have-fallen-new-construction

Still no real price chops at the Sutton--this apt on the market for 700+ days: http://streeteasy.com/building/the-sutton-959-1-avenue-new_york/8p?featured=1

Also relevant to thread on the lumiere/coda. The developer gets a new RE agency and branding expert rather than face reality and chop prices. Oh, and lobby redesign...

CC, For 959 1st, you have ask yourself whether your new condo price expectations are realistic. It seems it is already $1650 per sq ft. Crappy un-renovated cops in that area are over $1000 per sq ft. $300 per sq ft for reno and $200 per sq ft for new building already puts that at $1500 per sq ft before you add any condo premium.

With that unit on the market for over 700 days, hasn't the market spoken as to the price?

I think we may be at the point in the market where at least some developers can't cut prices. Between acquisition, hard construction costs, soft costs, carry, marketing, closing,etc. the may be so highly leveraged that the price chop it would take to sell quickly would put them under water.

Cc, You may turn out to be right. However, developers look at the project sell out or line by line sales rather than a single unit.

https://www.wsj.com/articles/manhattan-residential-real-estate-market-heats-up-1489575600

The market is heating up.

30y, Any new development over $ 2000 per sq ft except for a few with Central Park view or unique features, there is room to cut without developer or investors losing money. Bottom line for most is $1000 per sq ft in land, $700 in soft and hard cost including financing, $150 in marketing and empty cost.

Streetsmart, Resale may be but new development still has a lot of supply and more is coming. i think new development will get absorbed but many new developments will need to lower the prices further.

Plus a lot of the recently sold new development condos were sold to investors, many foreign investors. Some buildings were as many as 50% investor units. Now due to Trump, many foreigners are being scared away from investing here.

300,
I think you may be low on those costs. I think you will find hard construction costs alone may top $700 in some of these developments.

CC, I do not think Trump has any impact on foreign demand. Many famous people announced that they would move out of America if Trump gets elected but none of them did. It is more of a matter of excess supply and foreign buyers realizing that there is no rush to buy as the prices are not going up for new condos. If at all, the new prime location condo prices are coming down to a more realistic level of $2000-2500 per sq ft except a few unique developments.

Any indication of demand / concessions / price cuts in Brooklyn New Condo Devs?

Re: Foreign demand, there is also some press about Russian & Chinese demand drying up due to FX moves, sanctions and local attempts at capital controls / corruption fighting . I'd imagine the NYC rule change to unmask LLC condo buying did not help some of the cash hiding either.

https://www.bloomberg.com/news/articles/2017-01-26/world-s-biggest-real-estate-buyers-are-suddenly-short-on-cash

As for foreign buyers, it's not the same as celebrities who merely don't like trump saying they will leave the country (they always say that about the Republican anyway). There are visa/immigration concerns. I don't know how much of an impact it will have but I think it will be one of many factors influencing the market.
https://therealdeal.com/2017/02/03/immigration-ban-visa-reform-will-damage-real-estate-market-sources/

Re: Brooklyn new dev, from what I can tell trolling street easy listings over the past year, those units seem to be moving due to the demand for new construction condos at lower than manhattan prices. The ones not really moving much now have drawbacks like bad location (i.e. Oosten, in Williamsburg half mile from any subway) or aspirational asking prices for BK with high monthlies (the Baltic).

steve, Thanks for point out the LLC exposure potentially limiting dirty money. That is a real issue for $10mm plus properties.

https://www.bloomberg.com/news/articles/2016-11-30/china-said-to-add-curbs-on-yuan-outflows-outbound-investments

Also i can't find the link right now but there was an article recently quotion several brokers who dealt with Russian buyers saying the the buyer pool from the major cities in Russia was drying up and they had moved on to secondary cities as sources of potential investors.

And apparently the Israel bond market, which had been a great source for Extell and other developers to get money for construction is having issues as well.

As a broker working with a few international buyers, I can say unequivocally that Trump has had a negative effect on foreign investment. I've had multiple international buyers sour on purchasing, worried about punitive taxes on foreigners (especially Muslims or those from predominately Muslim countries) that could potentially be passed by the time they try to sell. Of course worries they or their families will get held up trying to travel back and fourth from the US don't help either. This is especially the case for parents buying for kids.