Bump Ahead, Or Why Waiting To Buy A Manhattan Apartment Could Cost You Money

Waiting on a manhattan apartment may cost you money

In the years since the economic collapse, we have seen a wide array of metaphors deployed to describe both what just happened and what lies ahead. Some were more felicitous than others and none quite did the trick, but when it comes to summing up the current situation in the market for Manhattan condominiums, "like turning around a battleship" isn't bad at all. This particular pundit-approved cliche is unusually apt when it comes to describing the Manhattan condominium market's a slow, steady and maddeningly gradual ongoing comeback. Given the extent of the slump in the Manhattan real estate market, this is to be expected -- and is even somewhat advantageous for those browsing Manhattan apartment listings, as condo prices are still relatively low, and price cuts still comparatively common. But a recent article in the New York Times serves as a sobering reminder of both how deep the real estate trough of the last few years actually was, and as a warning that -- once we finally get this battleship turned around -- there may still be some choppy seas ahead for those looking to buy a condo in Manhattan.The culprit, this time, is a lot simpler to understand than the myriad mixed-up factors behind the economic downturn. No, this one's simple -- with real estate financing difficult to come by in recent years, and demand for Manhattan apartments at a low ebb, new residential construction has been very slow over the past few years. "Last year, through November, the city issued permits for only 10 new residential buildings, for a total of 505 new units," Vivian Toy writes in the Times. "That’s 95 percent fewer apartments, either condo or rental, than for the same period in 2008, when permits were filed for 9,448 units in 147 buildings, according to census data." Right now, with hot new construction condominiums such as The Aldyn and Cassa NYC going great guns, it's tough to imagine a shortage of new construction condos in Manhattan. But with developers still gun-shy and struggling to get financing, the number of new construction starts promises to be way down. Which, in turn, means that supply looks likely to get very tight around 2012. You don't need to be a Ph.D economist to know what constricted supply and rising demand will do to Manhattan condo prices. "Once we work through the existing inventory and there’s nothing new coming on line," Corcoran Sunshine Marketing Group president Kelly Mack told Toy, "there’s going to be a major shift in the market. Prices may start going up significantly in 2012, in anticipation of the shift in inventory." All of which adds a reby quite a bital degree of urgency for Manhattan apartment hunters. With what could be a considerable bump in prices ahead, searching Manhattan condo listings now, instead of a year from now, suddenly seems prudent. Or, if you prefer your metaphors with you real estate news, once this battleship turns around, the spike in Manhattan apartment prices should be full speed ahead.

NYC Daily Real Estate Blog