When Lehman Brothers went bankrupt in the fall of 2008, perhaps no neighborhood was more greatly affected than Harlem. The ill-timed flurry of construction in Harlem that preceded Lehman’s collapse left about a dozen new developments stranded, so to speak. In other words, those new luxury condominiums either on the market or about to be on the market at that time suddenly had no buyers and a bleak future. So, almost overnight, the new construction revival in Harlem created a glut of luxury condos that no one wanted to live in. This unfortunate turn of events had defined Harlem real estate for the past few years, but it looks like the damage wrought by those events has finally abated: in the third quarter of this year 150 condos sold in Harlem, marking the fifth quarter in a row where condo sales in Harlem exceeded 100 units. Despite the odds, sales of new luxury condos now exceed pre-Lehman levels. Granted, this is due to greatly reduced inventory and an extreme shortage of quality inventory elsewhere in Manhattan, but this recovery is still impressive, and it spells good news the Manhattan luxury real estate market as a whole.
Many of the luxury condos in Harlem that were mostly empty over a year ago are now either sold out or nearly sold out. The Douglass, The Livmor, and Parc Standard are all sold out; Soha 118 and 2280 FDB are almost sold-out; and Windows On 123 is entering its second round of sales. Furthermore, this trend applies to Northern Harlem as well, an area that has long been untouched by wealthy Manhattanites. All over Harlem, luxury condos are suddenly hard to come by. It’s not hard to figure out why: prices per square foot stand at $582, roughly half of the cost of a similar condo in Midtown or Lower Manhattan, if not more. This was somewhat inevitable, because when the prices per square foot stood at $832 in 2008, no one was buying. These prices represent a tremendous value for Manhattan real estate, and buyers of high-end luxury real estate are recognizing it as such.
This trend speaks volumes about the health of the Manhattan high-end real estate market. It certainly appears as if the havoc created Lehman Brothers collapse is fading, even though it still hangs over new construction in Manhattan. And even with these drastically reduced prices, the fact that people have enough confidence in the market to buy rather than rent means that many believe that better things are yet to come for real estate in Manhattan. Buyers shouldn’t assume that this trend will last, because as with any other trend in the lightning quick Manhattan real estate market, things will probably change before you know it. Already, signs are pointing to rising prices, which is only natural when high-demand luxury condos become scarce. In 2280 FDB, the remaining units have already jumped from $499,000 to $1.889 million. If this any indication of things to come, then it would be wise to act quickly if you want to take advantage of these tremendous deals.