That glut in the new-condo market that everyone’s been forecasting? It never appeared to affect prices or sales—at least, not yet. But the first data from the past few months seem to indicate that the drop is imminent. In the graph shown above, the orange line (indicating closed deals) and blue line (representing deals in contract) should be at about the same level, since nearly all contracts turn into sales after a few months. But as you can see, the number of contracts in the past few months is way lower than the number of closings (pre-2008 data are unavailable, which makes this an admittedly rough metric). Even if every one of those contracts is headed to closing, that little blue mark indicates that new-condo sales are likely, in the next few months, to drop by 75 to 80 percent. This segment constitutes more than a third of all Manhattan sales—in some months, about 40 percent—meaning if that total shrinks by three-quarters, it will seriously affect the larger picture. Buyers: Negotiating power may be headed your way. On your marks.
No More New Condos?
Data provided by StreetEasy.com.