The Ripple Effect of Northside Piers' Price Cuts
When Toll Brothers slashed prices at Northside Piers’ Tower 1 back in February, the effects rippled through the oversaturated Williamsburg condo market, reports The New York Post. The cuts took prices from a pre-market-slide average of $900 a foot down to about $700. “When they dropped those prices, they made anyone inland have to look…
When Toll Brothers slashed prices at Northside Piers‘ Tower 1 back in February, the effects rippled through the oversaturated Williamsburg condo market, reports The New York Post. The cuts took prices from a pre-market-slide average of $900 a foot down to about $700. “When they dropped those prices, they made anyone inland have to look at their prices,” explains David Maundrell, head of Aptsandlofts.com. “We had to be realistic and do what Toll Brothers is doing because it’s only a matter of time before buyers realize they can buy for $650 [per square foot] near the water.” For, example, at the Evry, a new 14-unit development AptsandLofts is marketing at 273 Manhattan Avenue, prices are under $600 a foot.
Will of the People [NY Post]
Lechacal;
Thank you for your response to GWH. I didn’t have the energy to respond to him/her, so I’m glad that someone did.
The mindset on this site (“Greedy”, “Evil” developers are the scum of the earth) makes one weary after a while.
Lechacal;
I can’t speak about the Williamsburg condo market either, but can also speak about the PS condo market, as that is where I live. I live in one of the new condo developments around 4th Ave and 2nd/3rd Street. My particular complex has 46 units, the large majority of them being identical 3BR units, making comps easy.
From what I see, the sales volume has gone way down, but prices are holding up. Here is the record to date:
Fall, 2007: $1.05M
Winter, 2009: $1.03M
The units are 1300 square feet, so it works out to about $800/square foot.
I’ve seen a number of folks pull there units off the market, rather than accept a lower price. With the lower inventory, the prices have held up so far. To my great surprise, folks have been able to pull back inventory even in the face of the tough economy. For instance, my downstairs neighbor was laid off, and put his unit up. I thought he was ripe for lowering his price. He eventually found another job, which pays less. They are thinking of downsizing, and so still have their unit on the market. The pressure is off them, however, to sell asap.
I think, therefore, that the pricing pressure on the prime markets like PS will depend upon how long and deep the economic recession works out, and that is far beyond my ability to predict. Unlike Williamsburg, there is not a huge number of new projects coming online. The Crest and Novo are almost filled up, and the two developments higher up on 4th Ave (near Baltic) are rentals.
GWH: I don’t agree with what you are saying at all. The price is set by the market. If the market is $1500 psf and costs are $300 psf, then good for the developers for building more buildings and making money for themselves. How can you in one breath blame developers for being “greedy” (god forbid anyone makes a profit!) and in the other breath complain about lack of housing? If they can’t make a profit, who do you think is going to do all of this building you are asking for?
My observations are limited to what the market will bear. When it comes to how much you should pay for something, that’s all that really matters.
If people can make a profit based on building costs and market prices for the finished product, they will build. If they can’t, they won’t. As an aside, building costs are coming down, so don’t assume that the drop in market prices will mean nothing gets built.
Markets really aren’t complicated. It amazes me how few people understand them.
Lechacal is right. Manhattan prices have dropped much faster & this will have an effect on prices of apartments in some parts of BK. Only caveat is that maintenance tends to be much higher (and amenities often better) in Manhattan.
Rob – similar to Park Slope, the UWS used to have some very gritty parts. Some of my older friends that live there tell stories about having to walk in the road up Amsterdam Ave to avoid getting jumped, SRO’s and drug dealers on the blocks near the Naural History museum etc. Then it gentrified and a good number of those priced out moved to Park Slope!
“Snark…how do you get your keyboard to type that “squared” raised 2????”
Character Map?
Don’t let the development crowd tell you that high housing prices is the result of high labor costs or strict regulation. This shows that high housing costs are due to developer greed, looking for a price that is well above construction costs. I mean, if they can cut prices like that, what kind of price premium are they taking in? Unfortunately, the only thing that will bring housing prices to a reasonable level in this city is the construction of more housing. Developers think they can ask such high prices because people are desperate for housing in transit accessible neighborhoods. I’ve said it before, but I think we need to upzone more neighborhoods, especially those around transit. We need more housing!
ew lechecal park slope is 50000 x nicer than the upper crust side.
*rob*
Snark…how do you get your keyboard to type that “squared” raised 2????
The prices at 500 4th Ave are an absolute joke. I am starting to organize my bottom-of-the-market thinking around the $500 psf level. Some properties will bottom out at or below $500 psf. I think basically everything along 4th Ave falls in this bucket. Some will bottom around $600 – say, good coops in center slope. I think all but the most extraordinary properties in the slope will be below $700 psf by the time we hit bottom.
There is a lot of inventory below $1,000 psf in good Manhattan neighborhoods (eg UWS). Some good stuff in the $700s and $800s. I love the slope and all, but I just can’t see prices for center slope coops at more than $600 when I can get an equivalent place on the UWS for $700 or $800.