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New Condo Prices Expected to Hit Record $5.9M Average in 2015, Report Says

By Amy Zimmer | April 28, 2015 7:51pm
 The new development Carnegie Park, where units are priced from $850,000 to $3 million, is selling like hot cakes, its developer Related said. The average price for new development in Manhattan is $5.9 million, according to CityRealty.
Carnegie Park, a New Development in Manhattan
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MANHATTAN — For mere mortals who dream of living in one of the fancy new developments going up in Manhattan, sober up: The average price of units in these new buildings is expected to reach a record $5.9 million this year, according to a report released Tuesday from CityRealty.

That's more than double the average price for a Manhattan condo, which will hit $2.7 million in 2015, according to the report.

Using pricing information of the 4,881 new development units from active and in-contract listings, offering plans and projections based on listing prices, CityRealty projects the average price per square foot of these new apartments will reach $2,498, representing a 50 percent increase over prices from two years ago.

Then there are the buildings in the stratospheric class, like One57 on "Billionaire's Row" that made headlines with its record-breaking $100 million penthouse. There's also a $150 million unit listed at 550 Madison Ave., a $130 million penthouse for sale at 520 Park Ave. and a $110 million penthouse in the Woolworth Building in the Financial District.

"The ultra-luxury new development market is going bonkers," said CityRealty's director of research Gabby Warshawer, noting that the five buildings expected to fetch the biggest bucks will account for more than $10 billion in sales.

That amounts to a third of the projected $27.6 billion to $33.6 billion in overall new development sales over the next five years, she said.

There are rumors that units priced well above $100 million at 220 Central Park South will hit the market, the report noted.

CityRealty estimated that the hotly anticipated 220 Central Park South — designed by 15 Central Park West architect Robert A.M. Stern — will average $7,061 a square foot. That's based on figures that likely don't include the building's highest-priced units, the report noted.

"It's not just going to break all records in terms of price, it's going to be the first to hit those records within the shortest period of time," said international real estate attorney Edward Mermelstein, who completed the most deals at 15 Central Park West.

Some brokers have been questioning how deep the pool of buyers is for the swanky new condos that might not be as "unique" as 220 Central Park South and whether the high prices will be sustainable.

New York real estate is still considered a "safe haven" for wealthy foreign buyers looking to park their money. The city is No. 1 in the world for the number of residences owned by high net worth individuals (those worth more than $30 million), according to a recent report from Sotheby's International Realty.

The report estimates there are 211,275 such individuals and that this population grew by 6 percent from 2013 to 2014.

But the top selling building for the first quarter of 2015 was actually a new development with more moderately priced and sized apartments — a shift that many real estate expert predicted might happen.

The Upper East Side's Carnegie Park, which averaged a deal a day since launching in January, reached 100 sales in just three months, according to its developer the Related Companies.

Instead of the sprawling units in buildings like those at 220 Central Park South, the 325-unit 31-story building at 200 East 94th St. (yet another Robert A.M. Stern-designed building) has units ranging from approximately 725 to 1,900 square feet costing from $850,000 to over $3 million.

"A building like that right now seems to be a runaway success," CityRealty's Warshawer said, noting that the average price for a unit there is $1.35 million and $1,310 per square foot. "It shows there's quite a lot of demand for relatively affordable units. It's still expensive, but it's a heck a lot cheaper than $5.9 million."