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Prices May Have Peaked For Now

In Manhattan, transaction dollars have declined 39% on commercial, and top-end residential transactions and prices are declining.  The flood of new…

By Joel Ross | joelross | Updated on August 21, 2017

Joel Ross

In Manhattan, transaction dollars have declined 39% on commercial, and top-end residential transactions and prices are declining.  The flood of new very high-end condos on 57th street and Central Park South has led some projects to now be at risk of the mezz lenders taking control. High end brokers say there is just no market right now, and nobody has any idea who is going to be buying all those units. Stand by for workouts, lenders assuming control or developers suffering real losses.

Overall, the Manhattan residential market is struggling with far too much inventory. The coop market, a unique NYC format, is very tough now because to buy a unit in a New York coop, you are subjected to the board having a right to scrub through your personal financial and other information, including, in some cases, a private detective report. Having been through that myself on two occasions, and having sat on a coop board, it is not an experience buyers want to go through. You get board members who know nothing about financials, or business, asking stupid questions that are intrusive. As a result there have not been any new coops formed for many years and there are too many brand new condominiums now competing. If you like elegant pre-WWII buildings, and close selection of your neighbors, coops are good. As a result, coops are priced materially below condos just because of the process of  approval.

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