The Real Deal Online recently released some interesting statistics regarding new development supply in Manhattan. With all the recent press around some new mega condo plans in Manhattan and the frequent articles about new developments like One 57, 250 West Street and Touraine, one would think that new developments were bursting through the ground at record pace. Alas, the opposite is actually occurring.
The number of Manhattan new development condos coming online in 2011 has dwindled to only 466 units (YTD), down from a peak of 10,660 units in 2006. 2010 and 2009 each had only approximately 800 units come online. From where we are sitting, 2012 is set up to be a record low for new development inventory.
The reasons for these low numbers are quite obvious. The credit crisis of 2008 caused a lack of available construction financing. Therefore, almost nothing has been built or approved for financing. And, there are very few projects on the drawing board.
So, what are the implications of low to almost no new development inventory in a city where demand for new construction is increasing? With everything else being equal, the low supply of new development inventory might just put significant upward pressure on prices of those high-quality new developments that came online in the last few years.
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