Great Timing - NYC Construction to Set Record, Then Drop, Group Says

I'm amazed every time I walk past early-stage construction these days. One that immediately comes to mind is the building at 13th and B where the Clemente Medical Center used to be. It probably seemed like a good idea in 2005 or whenever it was conceived, but a block away, 525 E. 12th hasn't sold anything, and 2 blocks away 643 E. 11th has sold 2 units after a year on the market.

I'm guessing that most of those residential buildings are rentals as a figure of 35,700 is huge relative to the sales numbers I'm used to seeing for the city.

Regardless, the numbers would suggest significant supply weighing upon sales prices and rental prices.

Back in July when the 421a tax abatements were ending and you had to either break-ground or apply for a permit to take advantage of varying levels of tax abatement. either way, many people significantly underestimate the amount of new supply coming online. there is a ton on the way while transactions keep falling.. don't have to be a genius to figure this one out.

I can't tell you how many people I heard a couple years back saying this time its different, developers aren't overbuilding, and they'll shut it off before there is a glut.

I guess folks never understand that the building process can't turn on a dime.

Between tax abatements and rezoning in Downtown Brooklyn with respect to air rights along Flatbush, we have a tremendous glut in the making. We have rentals being built at Avalon Bay (44 stories), 235 Gold, 111 Lawrence (51 stories), Catsimatidis' project 162 Myrtle, and Ratner's 80 DeKalb. All these projects well on the way. If City Point restarts its project, this immediate area will be fully saturated at a very difficult time.

The link below was posted by Brownstoner earlier today about 111 Lawrence.

http://www.brownstoner.com/brownstoner/archives/2008/10/111_lawrence_ri.php

The NYT version of the story:

http://www.nytimes.com/2008/10/15/nyregion/15build.html?_r=1&hp&oref=slogin

The NYT version of the story:

http://www.nytimes.com/2008/10/15/nyregion/15build.html?_r=1&hp&oref=slogin

Wow, even Junkman is participating in the glut talk...

It feels like a very slow motion train wreck which has just started - and will continue for years.