Financing for condominium construction and purchases has become available in New York as the supply of new homes ebbs, according to developer Kenneth S. Horn, president of Alchemy Properties Inc.
“Product began to recede” after the 2008 financial crisis, Horn, whose closely held firm is developing condominiums on the top 40 floors of the Woolworth Building in lower Manhattan, said today on a panel at the Bloomberg Commercial Real Estate Conference in New York.
The inventory of Manhattan homes for sale fell to a seven-year low in the third quarter as owners waited for prices to recover before trying to sell, according to appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate.
The number of homes on the market totaled 5,847 at the end of the quarter, a 24 percent decline from a year earlier and the lowest since the first three months of 2005, the companies reported Oct. 2. Listings in new developments fell 28 percent from a year earlier to 1,090 properties.
Sales fell 5 percent to 2,952 deals, while still reaching the second-highest level since 2008, according to the report.
Horn said he plans to build 40 to 45 condos at the Woolworth Building at 233 Broadway, which was the world’s tallest tower until 1930. The project is likely to attract mostly foreign buyers and the prices will be “we hope, high,” he said.
While a recovering housing market has made condo construction viable, the tax benefits of rental apartments are more favorable for builders, said Steven C. Witkoff, chairman of the Witkoff Group, a New York-based investor in offices, hotels and multifamily real estate.
Manhattan apartment rents surged in September to a median $3,195, coming within 2.1 percent of the 2006 peak, as improving employment boosted competition among tenants, Miller Samuel and Prudential reported Oct. 11.
The cost of land in New York usually makes rentals too expensive to develop, which is why more condos are being built, Horn said.