New York’s super luxury market, long a trend setter with astronomical prices and penthouses in the clouds, now has a reason to envy Boston’s fast-growing array of gold-plated condo towers.
To put it simply, Boston’s luxury condo market is hot right now, while New York’s is not.The pace of deluxe condo sales is slowing in the Big Apple, even as it speeds up in Boston.The shift comes as developers in both cities scramble to build ever more expensive high-rise homes for the rich.Yet while Boston certainly has a lot of construction going on right now, it is a whole different ballgame in New York, where so many new luxury apartments and condos are either under construction or opening that it has created a backlog.
“New York’s premiere market is actually slowing while Boston’s is speeding up,” noted Ralph McLaughlin, Trulia’s chief economist. “It’s an interesting dovetail of the two premiere markets. They started at the same point last year and now they are going in opposite directions.”The number of luxury condos and homes still on the market in New York after 30 days jumped to 75 percent this April, up from 73 percent the same time last year. By contrast, luxury properties are selling faster now in Boston, from 70.3 percent still on the market after a month to 67 percent.And it’s not just the pace of sales that’s slowing in New York, but prices as well, especially in the super high end of the market.A planned, 900-foot-tall Midtown Manhattan condo tower wound up in bankruptcy court in April, with the developer battling a foreclosure attempt by his lenders.
Another skyline-topping tower at 157 W. 57th Street – One57 – has struggled to sell the last quarter of its units amid the slowing market, The Wall Street Journal recently reported.The setbacks have come amid a building boom that is seeing tens of thousands of new apartments and condos take shape across New York, including a profusion of fashionable, pencil-thin luxury towers on Manhattan.While more and more new condos and apartments are flooding the New York market, one of its main sources of demand for units at the gilded top of the market, wealthy foreign buyers, are pulling back amid economic jitters in China and other parts of the globe.
The resale price in Manhattan grew at its slowest pace in the first quarter since the fall of 2012, rising 3.8 percent to $978,765, according to StreetEasy, while prices in Brooklyn have been slowing since the start of the year.And prices are likely to continue to cool over the coming year. Manhattan is expected to see prices rise by a more modest 2.6 percent, while Brooklyn will downshift even more rapidly, to a 1.7 percent growth rate, StreetEasy predicts.While downtown Boston is also seeing a surge in luxury construction, demand is still high, suggesting the luxury market here has yet to reach its saturation point, industry observers say.
Overall, the Boston area suffers from the effects of years of under-building of housing of all types, driven by intense opposition to new development and a scarcity of available land to build on.That means Boston could very well see another two years or more of luxury condo construction before seeing a slowdown in prices, noted Merit McIntyre, president of Coldwell Banker Brokerage in New England.
“We have no land left and the desire to move into the city, or as close to it as possible, is a huge desire for buyers,” he said.