NYC Developers Cutting Deals At Record Rates To Try And Move Ritzy Apartments
The developers of the city’s brand-new residential buildings are slashing asking prices as sale numbers continue to slide.
The number of new condominiums sold in the third quarter was down more than 30% from the previous three years, according to the Wall Street Journal’s analysis of sales records.
“Everybody today comes in and expects a discount,” HFZ Capital Group Chairman Ziel Feldman told the WSJ. His firm has six condo and co-op projects on the market right now.
The city is swimming in new development offerings, and sponsors are continuing to pick up transfer taxes and attorney fees in order to get sales across the line. Plus, brokers who bring buyers and close deals are being offered increased commissions of 4%, a full percentage point higher than the standard 3%.
It is a trend that has affected the city for the past two years now, and even the most prolific developers are not immune. Extell Development, for example, has cut the asking prices on the 11 apartments at 1010 Park Ave. by 10%.
At 100 Barclay, developed by Magnum Real Estate, several of the units have sold slightly below asking price. The discounts there have increased over the last 12 months, according to StreetEasy data.
Developers and brokers say well-priced apartments still sell well, particularly if they offer something different from the rest of the market. But buyers are nervous about interest rates and political uncertainty, and don’t want to be caught overpaying.
“There’s only one tool in the toolbox — it’s called the price,” Olshan Realty President Donna Olshan, whose firm tracks contracts signed on units priced at or above $4M, told Bisnow in August. “2013, 2014 and 2015 were the golden years of new development in New York. We are past that … Rarely have I seen buyers be so aggressive and make such low offers.”