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October 22, 2009

No Surprise: Building Falls Off in City

development-keyhole-1009.jpg
The number of housing units created in New York City this year is expected to drop more than 75 percent from 30,000 last year (and the prior four years) to just 6,300 this year, according to the New York Building Congress, though building spending across all sectors should decline by only 20 percent or so. “It’s a declining construction market,” the NYBC's president Richard T. Anderson told The Times, “but not as much as we anticipated.” The report also claims that the construction bear market has bottomed, but developers don't necessarily agree. “They’re way too exuberant,” the developer Douglas Durst said, adding that vacancy rates continue to fall and rents are still dropping. Meanwhile, DOB reported that 460 residential projects have been put on hold—and that third of them are in Brooklyn.
Sharp Drop in Building Residences in the City [NY Times]
Photo by hunter.gatherer




Posted by Brownstoner at 9:00 AM | Comments (19)
Categories: Market

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I'd love to see a chart of the number of units that are constructed each year over a long period of time, say, 20 years. This falloff to what is likely a very, very low number will stoke the fires of higher prices in the not too distant future.

Conversely, what are the demand numbers for new home formation or immigration into NYC every year?

30,000 was probably a historic high but I bet the 6,300 is near a historic low.

Posted by: daveinbedstuy at October 22, 2009 9:05 AM

TISHMAN LOST THE STUY TOWN LAWSUIT

Posted by: daveinbedstuy at October 22, 2009 9:10 AM

"This falloff to what is likely a very, very low number will stoke the fires of higher prices in the not too distant future.

Posted by: daveinbedstuy at October 22, 2009 9:05 AM"

Or building volume is very low because of falling prices?

Posted by: the chicken at October 22, 2009 9:32 AM

Think ahead, chicken.

Prices for condos have not yet bottomed. The market knows that.

Buy PNC.

Posted by: daveinbedstuy at October 22, 2009 9:37 AM

so you think prices come down near-term (because they haven't bottomed yet) and then shoot back up in the near-term (not too distant future)? I am confused...

Posted by: the chicken at October 22, 2009 9:42 AM

I NEVER said "shoot back up."

Posted by: daveinbedstuy at October 22, 2009 9:51 AM

fair enough but I was paraphrasing your "stoke the fires of higher prices" which I read as "strap yourself in, it's gonna fly"

Posted by: the chicken at October 22, 2009 9:52 AM

i never heard of a confused chicken.
i am confused too; are you suggesting to buy nyc builders before the bottom?
isnt it a bit late to buy pnc?
what is this a stock touting board?
did i log in to the wrong site?
helpppp....

Posted by: antidope at October 22, 2009 9:53 AM

Would condo prices go down more? I recently submitted an offer about $550/sq feet and the developer is not willing to lower down the prices.

I guess only time could prove that daveinbedstuy is right.

Posted by: seahawk at October 22, 2009 10:00 AM

I know this is very dated article DIBS but interesting info anyway. Am looking for more recent or a chart.
http://www.manhattan-institute.org/html/cr_2.htm

Posted by: Petebklyn at October 22, 2009 10:01 AM

people need to start making mini condos for people who dont need a lot of space. im talking like, a single room, maybe 10x10 with a bathroom/kitchen that's like 2x3. so 100 feet plus 6. like 106 square feet, then charge 300 dollars per square foot and finally things will be nice and affordable. someone asked me what i think affordable is in a thread the other day or yesterday, and this is what i mean 300 x 106. about 30,000 dollars. would be perfect, and these little mini units for people who aren't materialistic pigs or breeders would fly off the shelves like HOTCAKES! but noOoOOoOOoO we live in a society now where every single butt hole NEEDS it's own poop drain. F that.

*rob*

Posted by: Butterfly at October 22, 2009 10:05 AM

rob -- have you considered moving to Japan?

http://www.businessweek.com/globalbiz/content/mar2007/gb20070313_145902.htm

http://www.apartmenttherapy.com/ny/news/-tiny-living-japanese-micro-homes-019639

Posted by: northsloperenter at October 22, 2009 10:10 AM

DIBS, do you reckon a capsule hotel would work in New York? I smelling a market opportunity...

Posted by: the chicken at October 22, 2009 10:22 AM

would you be able to live in a space that small with a dog? and more importantly, would you really be ok with poo mist that close to the kitchen? heh

Posted by: CG_ups at October 22, 2009 10:28 AM

Apparently there is a "hotel" of apartment units right next to my office building here on 55th Street. these are not "capsule" units but big, spacious apoartments that rent by the day/week/month.

There should be a market for capsule units just like there should be a market for cheap hotels.

I bet the real estate taxes, insurance & unions prohibit the profitability of something of that soret. certainly all the onerous regulations and licensing issues make it very difficult.

Posted by: daveinbedstuy at October 22, 2009 10:36 AM

DIBS, just sent you a bloomie with business plan for capsule hotel but looks like you're offline.

Posted by: the chicken at October 22, 2009 10:45 AM

"They’re way too exuberant"

From a major developer. You better listen.

"I am confused..."

DIBS does that. Yes, "stoke the fires of higher prices in the not too distant future" = "shoot back up". But not in this Greater Depression.

***Bill Thompson for Mayor***

Posted by: Brownstones Half Off at October 22, 2009 11:12 AM

Rob, this trend has already begun. It will have to take hold gradually as furniture and other household items are designed for smaller spaces. But now you see builders in places like Orange County that are building >500 SF 1BR's and in the process breaking all kinds of soft 'design rules' that have been accepted for decades.
The problem was the condo boom around here didn't help this trend. If NYC would ever remove the rent restrictions we might actually see a building boom in affordable rental apartment buildings.

Posted by: lincolnlimestone at October 22, 2009 11:13 AM

quote:
would you be able to live in a space that small with a dog? and more importantly, would you really be ok with poo mist that close to the kitchen? heh


yeah cuz my first apartment on the LES i subletted for 4 years in a tenenment walkup. tiny kitchen with tub, and then my living area (the bedroom) was 6 x 7 feet. so yeah me and my dog could live in 10x10 easily. i had no access to the living room in that apartment because the woman i subletted from was a hoarder and hoarded all her stuff in there even tho she didnt live there.

*rob*

Posted by: Butterfly at October 22, 2009 11:20 AM

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