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Buying From the Glut

New condos by the hundreds are going unsold. Should you stand clear—or dive in?

It’s not a good time to be a real-estate developer. Lending has “drastically slowed in the last 90 to 180 days,” says Richard Bassuk of Singer & Bassuk Organization, a firm that helps put together financing. Banks now insist on “clubbing a deal,” meaning they want to share risk with partners far more than in the past. With so many cooks, deals are that much harder to make and close. “That’s a very arduous, time-consuming process,” he says. “No one wants to take a huge exposure.” Robert Knakal of Massey Knakal, which brokers many investment deals, says banks are looking for a successful track record and bigger down payments. But even veteran developers aren’t immune: Swig Equities, the big downtown firm, just suspended sales at 25 Broad Street and shuttered the sales office.

But is it a good time to be a buyer? Is that gleaming, empty tower in your neighborhood a white elephant—or a bargain buy? The buildings below are, to varying degrees, selling slowly or not at all. (They range from a $325,000 one-bedroom in Brooklyn to a $6.8 million East Side penthouse.) We’ve taken the market’s temperature, neighborhood by neighborhood, based on data from Streeteasy.com and talks with experts of every kind. And wherever you’re shopping, remember that long-term buys are inherently safer at a time like this. The era of the quick profitable flip is over.


The Neighborhood The Building Months On Market What's (Not) Selling
Upper Manhattan
A heavily saturated market, but asking prices appear to take that into account.
181 East 119th Street
A new 90-unit high-rise.
3 Ten apartments in contract (the most recent deal is dated September 2008). No other activity since then.
Ellison Condos at 2255 Adam Clayton Powell Boulevard
Ten Residences.
16 Nothing appears to be in contract. Developers cut prices in January.
Graceline Court at 106 West 116th Street
A 32-unit, sixteen-story condo building.
16 Nineteen in contract, eight presently on the market, price cuts galore.
223 West 135th Street
A five-unit loft building.
3 Nothing sold thus far
235 West 113th Street
Six apartments in a six-story prewar.
4 No sales; nothing in contract.
159 West 118th Street (a.k.a. Lotta Condominiums)
Prewar conversion with 35 units.
5 A few units went into contract last spring, says former listing broker Tamir Shemesh, but the developers "saw where the market was going" and turned the building into a youth hostel. "When the economy looks stronger, they can go condo."
307 West 126th Street
A ten-unit circa 1910 conversion
3 Three units remain after two years on the market.
271 West 122nd Street
A four-unit condo
8 Three units still available; one went into contract in April. "While we've had a tremendous amount of activity on the penthouse, it's difficult because it's not built yet," says Halstead Property's Julia Boland.
The Bridges North, 2283 Third Avenue
18-unit condo building at 124th Street.
12 This East Harlem condo turned rental in spring, and leased three units for student housing. According to Propertyshark.com, creditors placed liens against the property last month.
352 West 123rd Street
Five units with keyed elevator
11 The whole building is being offered for $4.2 million, down from $5.2 million. João Gomes of Prudential Douglas Elliman says the owner's "impatient" to sell. It may become a U.N. consulate.
Upper East and Upper West Sides
As solid as any neighborhood could be right now.
1180 East 93rd Street
A nine-unit condo in a prime location.
2 No sales yet. Warburg Realty’s Richard Steinberg, who’s heading up sales, says an Albany paperwork delay pushed back the introduction, and then the financial markets cratered. Steinberg notes the developers planned for two years’ worth of carrying costs, so they can wait out the worst of it.
807 Park Avenue
A three-unit building, with very large quadruplex apartments.
24 Nothing was ever in contract, according to Streeteasy.com. All three listings were pulled and rented last month.
238 West 108th Street
Six units, new construction.
12
(approx.)
One unit went into contract in July. Says listing broker Danielle Wiedemann, “There’s no competition from any existing product in the neighborhood…The sponsor is confident.”
Midtown
Dependent on pied-à-terre buyers, who may be less numerous than before.
446 West 38th Street
A six-unit project with keyed elevator entry.
12 Nothing sold; all available units were pulled from the market earlier this year. The building was subsequently put on sale in its entirely, but has since been taken off, too.
Hudson Hill Condominium, 462 West 58th Street
67 “ultraluxury residences” in a ten-story building.
12 Sixty-six units are still available (the other one’s for the super!). Developer Kenneth Horn says he has about 25 likely buyers who are waiting for completion, and he’s offering to pick up a portion of the transfer fees as an incentive-if they buy now.
211 Madison Avenue
A 40-unit condo in Murray Hill.
30 Fifteen listings still on the market; ten available for rent. No closings since July 2008, and nothing presently in contract.
m127, 127 Madison Avenue
A seven-floor boutique condo.
19 Two units sold before the market got soft in January, says developer Trevor Stahelski. The rest were rented. “Although this is not what we anticipated, we are pleased,” he says, adding that they’ll market the units when things look up.
Downtown
Some saturation in Chelsea, Madison Square Park and the Financial District.
423 West Street
A six-unit glassy new construction.
11 Much buzz in the press—Leonardo DiCaprio was said to be buying there—but no sales. Was most recently on the market as a mega-townhouse. It’s in pre-foreclosure (Propertyshark.com reveals that papers were filed in August).
The Campbell, 148 Chambers Street
A six-unit ground-up construction.
20 Sales were delayed by a fire during construction. For the reboot, “We entirely revised our original design plan with West Chin Architect in the lead,” says developer Jordan Tamagni, “Today’s market isn’t tomorrow’s market.”


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