The Real Deal magazine recently described the situation of future new condominium developments planned in New York City.
The office of the Attorney General of the State of New York has received, year to date, 89 requests for new condo constructions, which is a total of 1,903 apartments. The estimate for year end 2011 is about 2,850 new units to hit the market in the next 6 to 9 months. This number is way lower than the 4,870 units filed in 2010 and a small fraction of the 2006 filings which totaled 23,879.
It is natural to expect a slower construction market these days, after the financial earthquakes of the past few years and the current situation still somewhat uncertain.
On the other hand, given the scarcity of new offer, the ratio demand/offer has been reasonably stable here in NYC compared to other parts of the country.
Therefore the smaller quantity of projects that end up getting completed is sold at a healthy pace.
The competition amongst buyers, without a doubt, has come back to Manhattan for several months now. Negotiation is still possible but these new developments are usually well priced, adjusted for the new market conditions, and are generally sold at close to asking price.

The new condos built these days are on average smaller than the ones constructed until few years ago. The financial obstacles and the economic climate have brought the developers to focus on boutique projects that offer a lesser degree of service and amenities. This doesn’t mean that huge buildings with grandiose amenities, like MiMa in midtown west, aren’t developed at all.
In 2006 the average condo had 83 units, while in 2011 the average is 34 units.
The largest project currently marketed is 250 West Street with 111 units.

Rentals
The brokerage and advisory firm Nancy Packes (in collaboration with StreetEasy) reports that statistics are showing a narrowing gap over the last two years between what people pay to live in a doorman building versus a non doormen one.
Between 2010 and 2011 the premium paid for  a doormen building has fallen 36% for studios, 21% for one bedroom apartments and 18% for two bedrooms.
One of the reasons why this declining trend is happening is tied to the fact that the Manhattan social mix is changing. Creative industries have been hiring briskly and that breed of tenant is now more present.
Between 2005 and today creative jobs grew from 8.6% to 17% of total jobs.
These tenants have a less formal lifestyle compared to people working in finance and law. Therefore their choices are influenced more by the living space itself and practicality rather than a high level of service.
Also, since rental prices have started to go up again over the last few months, people who are asked higher rents in their current building might decide to switch to a non doormen one in order to keep living in the same neighborhood instead of looking somewhere else.
When it comes to large luxurious apartments larger than 4 bedrooms, the story is different. In that case, the premium for doormen went up 34% over the last year. Luxury is always a niche and stands apart.

To be noticed
The current city administration, namely Mayor Michael Bloomberg, has been very active and creatively proactive in real estate.
The latest project concerns the Brooklyn Bridge Park area. There are plans to build a residential building along a hotel on the premises.
I think the idea is brilliant since these buildings will contribute to pay the park maintenance and the views from those “potential” apartments are going to be marvelous.
Bravo Mike!

Last weekend The New Times published an article that reminds us that combining two apartments (i.e. creating a bigger one) before selling them is a very smart thing to do since the result is most likely to be more $ per square foot.
If your neighbor is planning to sell his/her studio and you are thinking about trading your two bedrooms, you two definitely should speak.
If the apartments are effectively merged before the sale, and the work is done finely and properly, the merging should command a higher price versus simply marketing the separate units at the same time while alluding to the possibility of a combination to the prospect buyer.
This is simply what happens in Manhattan. Very large apartments are historically rare and in demand. They are always sold at more $ per square foot than comparable but smaller apartments.

This is it for today dear readers.
I am always available to answer your questions regarding your next real estate investment in New York City.
Till next time.

Warm Regards,
Riccardo Ravasini