Basially, in Manhattan’s real estate market, there are two markets- the world’s elite led by high net worth individuals both domestic and abroad and the affordable luxury purchasers. New construction is really only being built with the former market in mind. Many of the shiny midtown towers inlcuding 432 and 520 Park avenue, 157 W 57 street, 220 CPS as well as their downtown counterparts are focusing still on the large luxury apartments with scant offerings under even 2000 sqft.
According to Barrons’ blog new construction prices have increased year over year 32% and the number of $10 mm sales has doubled. They are recommending investors/purchasers explore resales more where there is a gap between the price per square foot and that of their neighboring new construction buildings. They recommend exploring areas like Yorkville which I agree with and Gramercy Park. However, we must keep in mind that most of our apartments in Manhattan are co-ops and they trade at lower prices per square foot than condos. Almost all new construction is condo so the comparison is not apples to apples. Additionally, to say that Sutton East/Beekman is a bargain leaves out the conversation of maintenance. As a 16 year real estate veteran as a NYC real estate broker, we know that maintenance is a drag on appreciation. In the Beekman area, some buildings have very high maintenance. Every building needs to be reviewed with your real estate broker and financials of the building are reviewed so that you can get an idea of what the future may hold.
Also, left out of the conversation was Harlem. Harlem’s townhouse stock has increased in value tremendously-almost doubling in the last 4-5 years. This trend will continue since new construction will be restricted to the uber wealthy, and as a result, the affordable luxury market will continue to be served by Upper Manhattan. Since many of the buildings in Harlem have 15 plus left on the tax abatements, appreciation figures to very robust long term.