luxury-contracts-to-best-week-of-the-year-olshan/

Very interesting. A bit distorted by some massive purchases, but still interesting.
Would be interested to see where the prices all landed.

Total Weekly Asking Price Sales Volume: $356,775,000
Average Asking Price: $11,892,500
Median Asking Price: $7,075,000
Average Discount from Original Ask to Last Asking Price: 3%
Average Days on Market: 483
https://www.olshan.com/marketreport.php

432 Park has been trading at 15-20% discount to the ask as they never lowered the ask to close to the market.

Thanks, 30, but I was referring to the sale price rather than the final asking price.
It seems like activity has picked up recently. I'm curious as to whether it is increased market confidence, dropping prices, trying to get deals done before year-end or something else.

https://www.bisnow.com/new-york/news/multifamily/manhattan-new-rich-condo-sales-slow-82672

TeamM, Stock market is doing well and there has been some downward price adjustment at the new development asking and discounts being agreed to. The statistics do not show a better picture yet but well priced (naturally it is debatable what you call a well priced) product is moving. A $4-6mm range well-priced ($1500/sq ft range for a coop) family sized apartment in my building went into contract in a few weeks not much below ask.

Here is an example of well-priced ($2k-$2500 per sq ft) new development selling at a reasonable pace. Believe it is more than 1 year away from completion. Not the best location in Tribeca.

https://streeteasy.com/building/91-leonard

Any chance that a bunch of the buyers here are expecting big bonuses and rather than wait till January when they will be in competition with a bunch of other people who will be getting big bonuses, they decided to buy when the talk was mostly negative and developers were giving concessions?

91 Leonard - while at first glance it seems well-priced, those prices may be due to the really high monthly charges - 4600+ cc+tax for a 2-bedroom!

And agreed it's barely considered tribeca.. more chinatown/civic center

30, I think there is still a need based demand which is driving well-priced new developments in $2k-$2.5k per sq ft in good areas (prime a bit more like 21 East 12th). Better initial pricing of selected new developments and developers willing to offer concessions is definitely a part of it. Ultra-luxury on the other hand is not driven by need and buyers can afford to wait for better prices.

Feehong, Unfortunately $2 per sq ft of taxes in prime areas is the new normal. Add to that $1-$1.5 per sq ft in maintenance depending on the amenities and services. You get to $3+ per sq ft in monthly maintenance and taxes very easily. While it is expensive, this is the typical for new developments.

Thanks 300, good to know.. but if monthly carry for new developments has gotten so high, shouldn't they trade at a further discount? Looking at 91 Leonard again, with so many units in contract, apparently the market thinks it's still priced right.

If the carry cost is $4600, it just seems ridiculous that a similar sized unit right across the street (88 leonard), maybe in an older building with slightly inferior finishes, can be rented for around $6k. Granted this might not be apples to oranges, or maybe this is the reality now, but I'm starting to sense a bigger disconnect here..

For $4600, you get 1br. 700 sq ft. So appx $6.5 per sq ft. Let us call it $6 per sq ft with inferior finishes. New development eqt 2 bed room apartments will rent for $7 per sq ft (large apartment >1500 sq ft are possibly at a discount in the market. As people get richer, there is a desire for customization - just like a richer person is more likely to pay for a custom suit and upgrade from J Crew to Prada.

https://streeteasy.com/building/88-leonard-street-new_york/1907

In general, you are pointing to low cap rate on a purchase which for smaller apartments is low 2-2.5%. Larger apartments - say 2500 sq ft - may be sub 2%. High valuations just like any other asset class! One MAY think that instead of investing in SPX at these levels, might as well buy expensive apartment with some of the money which has been wisely / with luck invested in SPX and lock in low rates. At least you get to live in it. Think 2000 tech bubble and 2008 crash. When people NEED an apartment, they do not necessarily think of that purely from an investment point of view. Just my 2c.

There is also an element of how to show others that you are rich!! No one knows how much you have in your brokerage account.