A slowing in the increase of condo prices means gloom for sellers, possible bargains ahead for buyers
One57, seen here under construction, is part of the new development market that has cooled.
If you're a relatively new owner of a condo in one of the many new developments that seem to be taking over the New York skyline (and the real estate market), congratulations. You've obviously done well for yourself, as the third quarter median sales price for a condo in Manhattan was $1.7 million.
However, if you're looking to sell that same condo and make a handsome profit, you may want to hold off on popping the champagne.
Condo prices are obviously still lofty, but the year-over-year appreciation in value has slowed. Gone are the days of flipping new development properties with profit margins or 30 or even 50 percent. As Prime Manhattan Realty President Robert Danker tells The Real Deal, sellers need an appreciation rate "of at least 10 percent to even make a scratch."
In the current climate, he advises clients to rent out their units and sit tight, or accept a price cut if they really want to move the unit now.
This advice is in keeping with the latest Douglas Elliman sales report, which has resale condo price discounts increasing from 2.9 to nearly 7 percent from the initial listing price over the past year. The report also shows that more units are dropping out of the luxury market (i.e., sellers are allowing listings to expire after not finding a buyer at asking price).
"It's a great development for the market itself," says appraiser Jonathan Miller of the firm Miller Samuel, the author of the report. "Sellers are coming down to meet buyers. It illustrates how wildly overpriced listings were one to two years ago."
Not so great news if you were counting on turning a quick profit on your condo, though.
On the other hand, if you're in the market and have deep pockets, you may be able to get an upscale apartment at a discount.
