When It Absolutely Just Caught In Their Throat
A report from CNBC on New York. “Manhattan real estate sales and prices took a fall in the fourth quarter, and they’re likely to slide even further this year after the new tax rules take effect. Total sales volume fell 12 percent compared with the fourth quarter of last year — the lowest quarterly level in six years, according to a report from Douglas Elliman Real Estate and Miller Samuel, the appraisal firm. The average sales price in Manhattan fell below $2 million for the first time in nearly two years. The high end of the Manhattan market is showing the biggest cracks. Inventory of luxury apartments — those in the top 10 percent by price — grew by 15 percent.”
“There is now a 17-month supply of luxury apartments in Manhattan, up from 10 months a year ago. And with giant new condo towers sprouting up in every corner of the city, those numbers are likely to grow. Jonathan Miller, president and CEO of Miller Samuel, said that while buyers have already adjusted, sellers may take more time to catch up. ‘The sellers were already recalibrating after 2015,’ he said. ‘Now they will have to readjust again.’”
From Bloomberg. “Manhattan home resales fell in the fourth quarter as buyers wavered ahead of the expected tax overhaul and stood firm in their refusal to overpay. ‘The buyer is very worried about overpaying,’ Steven James, chief executive officer of Douglas Elliman’s New York City division, said in an interview. ‘The fourth quarter was when it absolutely just caught in their throat, where they said ‘No, I’m not going to do it.’”
From the Real Deal. “The last of the legacy contracts from the superluxury boom are closing, and the market is beginning to feel the hangover. The dropoff is largely due to the fact the wave of contracts signed in 2014 and 2015, during the luxury development boom, is coming to an end. That’s evidenced by the much starker declines in the luxury market, where the average sales price slipped 21 percent, from $9.6 million in 2016 to $7.6 million at the end of 2017. In the new development market, the average price fell 17 percent to $4 million.”
“According to a report from Stribling & Associates, the losses in the condo market were unevenly spread throughout the island. Average declines were highest on the Upper East Side and Upper West Side, where the average sales price fell by 15 and 19 percent compared to 2016.”
From New York City Patch. “Prices for the largest, most expensive condominiums and co-operative apartments fell the most, the report found. Co-ops with three or more bedrooms went for 18 percent less on average than a year ago, while large condos went for more than 12 percent less. Sale prices in Manhattan declined throughout the last six months of 2017 after increases in the first half of the year, the report says. The price per square foot in new buildings has been falling even longer. It hit $1,989 in the fourth quarter of last year, down from $2,254 in the fourth quarter of 2016.”
From Curbed New York. “Like the end of 2016, 2017 wrapped with significant political uncertainty and how, exactly, it would affect New York City’s real estate market. The underlying theme through the fourth quarter market reports were questions regarding the latest tax bill. ‘I’m not forecasting the price impact of the tax bill yet,’ Jonathan Miller, the author of Douglas Elliman’s market report said, but he noted that ‘it has more of an effect on the higher end.’ He continued, ‘I expect that in the near future, buyers will come in lower on offers initially and sellers will resist, a repeat of what we have been seeing.’”
“Compass put it most bluntly in its report: ‘The disconnect between luxury inventory and the demands of the market continues to widen.’ Condo inventory priced above $3 million made up 38 percent of condo inventory, but only 25 percent of contracts signed. Co-ops, which tend to be less expensive, became more popular with buyers, who also started negotiating more aggressively.”
From Bisnow. “With all of its debt paid off, 432 Park’s owners appear content with selling off its remaining condos at deep discounts. A buyer from China under the name 432 Park Joy LLC is under contract to buy three units at the tallest residential tower in the world for a total of $91M, The Real Deal reports. Developers Macklowe Properties and CIM Group had listed units 92, 92B and 93B for a total of $120M.”
From Westfair Online. “Several investors have sued companies run by White Plains developer Michael Paul D’Alessio for allegedly stopping payments on three midtown Manhattan condo projects. They fear ‘that there has been a gross misuse of funds,’ according to one of three lawsuits filed on Dec. 22 in Westchester Supreme Court, and unless they can review the books now, ‘it might be too late to seek appropriate relief.’”
“D’Alessio is the head of Michael Paul Enterprises LLC in White Plains. The firm has a 25-year record of building and managing commercial and residential projects, according to its website. ‘My only response,’ D’Alessio told the Business Journal, ‘is that all of the allegations are false and have no basis. I look forward to my day in court to open the books and records.’”
“The lawsuits make essentially the same claims. Investors were promised returns of 10 to 16 percent per year and quick repayment of principal. At some point, payments stopped and D’Alessio cited ‘liquidity’ issues.”
