The light purple represents the in-contract units by neighborhood. In the chart below, the dark purple line represents the unsold inventory by neighborhood. Some are ready for occupancy and others won’t be ready for 2-3 years. This represents all units that have had their offering plans approved by the NY Attorney General. Given how long it takes for new development to come to market and all the headwinds against development these days, including political headwinds, Manhattan will have an inventory crunch starting in the next 5 years, especially in its most prime neighborhoods.Īs of August 1st, 2022, there were only 6,000 developer units that are not in contract in Manhattan, down significantly from 2018. Only true ultra-luxury and super-luxury projects will have enough margin to cover potential double digit increases in costs and non-luxury segment inventory just won’t get built until inflation settles down. Currently, there are virtually no condo conversion projects in the pipeline due to these new rules and none expected in the future.įinally, the rapid rise in construction costs due to supply chain constraints from Covid and energy price spikes caused by the Ukraine war are huge headwinds for the creation of new development inventory. In this environment, don’t expect much to be built in NYC.įourth, rental-to-condo conversions disappeared after, on August 1, 2019, New York state adopted onerous rules that penalized building owners in an attempt to protect tenants.

Recently, we have seen projects proposed with 30% affordable housing rejected by leftist local city council members, where members are asking for a 50% (Project One45) and even 100% (World Trade Center 5) affordable housing requirement. There is just no political will in NYC to provide any incentives to developers to build condos or rental buildings.

The expiration of these abatements make it more expensive to build. Third, the law expired that allowed 421a, 421g, and J-51 tax abatements, which encouraged development by significantly reducing property taxes for developers and/or individual buyers. Second, since Covid, there have been much fewer land sales even though land prices in New York NY dropped 50% since the market peak in 2018, so there is not much in the pipeline based on land sales. Accordingly, condo sales, and new development, in particular, exploded. While 2020 was a bust for New York City property sales as Covid took hold here first, once vaccines came out and developers lowered their prices, everyone wanted a home in Manhattan. First, record home sales in 2021 and into 2022 depleted much of the excess inventory. There are five major factors that led to this reduction of new development inventory in Manhattan. We now expect that the number of new development apartments for sale in Manhattan New York in the next few years will be low (especially in prime neighborhoods) causing a supply constraint, and, as a result, putting upward pressure on housing prices from the supply side. Of course, that didn’t happen and, after the events that unfolded over the last few years, we are in the exact opposite situation. Back in 2018, the number of new development apartments for sale in Manhattan was so high that there were reports that the oversupply of new development was going to tank the real estate market.

Zillow apartments for sale in manhattan