The luxury property market in New York is looking "particularly sluggish" according to the recently released Beige Book of the Federal Reserve.
As reported by Business Insider, while the country's real estate are generally looking good, New York's high-end property market is experiencing a slowdown. There is an excess of supply and the city is having difficulty filling them.
The publication noted that the Fed reported on the dawdling sales of condos and co-ops since January compared to the last few months of 2015. Purchase and rental markets are particularly sluggish and developers are hardly able to close deals for luxury apartments.
For instance, Bloomberg recently reported about a $45 million SoHo apartment that the owner decided to chop into two units to increase its chance of being sold. From 8,400 square feet, developer Kevin Maloney divided the triplex penthouse of the building at 10 Sullivan St. into a 3,000-square-foot apartment and a 5,400-square-foot duplex. Now worth $11 million and $29.5 million, respectively, the high-end apartment becomes more affordable.
"We thought it was too expensive for the market and where the market was," said Maloney, principal and founder at Property Markets Group. "The air is very thin up there in that buyer pool."
The developer of 220 Central Park South at the Billionaire's Row shares the same sentiment, saying that "the market is slowing," according to Vanity Fair.
New York's real estate market has been a hot one in recent years, with prices going sky-high. But things are changing as inventory is swelling and more luxury units are being sold at the same time. Vanity Fair noted that as many as 5,126 newly built units will go on sale this year. Likewise, the turmoil in the global financial market and the continuing decline in oil prices are also affecting foreign investors' appetite.
