The highest value end of the real estate market has been a good measure of health of the art market for some time. Does that mean recent reports of excess inventory among New York’s new developments is a sign of lowering demand?
The Real Deal has this observation about delayed sales for New York’s newest towers:
Despite off-the-charts construction activity in New York City’s residential sector, new development inventory plummeted a whopping 44 percent during the first quarter of 2016, according to a report from Douglas Elliman and appraisal firm Miller Samuel. According to the report, there were 753 new condos for sale at the start of 2016, compared with 1,345 units a year prior. By comparison, Manhattan’s overall inventory level inched 5 percent higher during the first quarter, with 5,506 properties for sale during that time. “Developers continued to either pull units from the market or were slow to replenish them in order to keep marketing [time frames] at lower levels,” wrote Miller Samuel President Jonathan Miller. “The pace of contract absorption remained well below years-ago levels, as the weak U.S. dollar and increasing competition reset demand to a lower level.”
Miller said new development inventory has dropped for three consecutive quarters. “That’s a tangible indication of when contract volume cooled off and when the market changed,” he said, adding that the cooldown coincided with a weakening U.S. dollar and more inventory in the high-end condo market (at least initially).
Failure to Launch (The Real Deal)