Could Raising Condo Prices Be the Secret to Success?
Could the recipe for sales success in Manhattan’s luxury condo market be as simple as raising prices? For Manhattan’s largest condo complex, One Manhattan Square, it certainly seems so.
On March 2, Bloomberg reported that 100 contracts had been signed for the South Street property, bringing the total number of available units down to 715, from a total 815. The secret? Extell Development Co., which operates the One Manhattan Square project, keeps pushing up their prices.
In an interview with Bloomberg, Raizy Haas, senior vice president of development for Extell, revealed that the company’s pricing approach is strategic.
“It tells the market that we’re confident about our product and that we are selling well, selling fast,” Haas said. “We feel there’s still room for future price increases.”
While it may seem like a bold plan given how competitive the Manhattan condo market has become, recent reports show that prices rose at the end of 2016 across the board, suggesting that Extell may be part of a larger citywide trend. For December 2016, the median resale price was about $1.5 million, an increase from the previous month. In addition, prices for new developments made an incredible leap, increasing 50 percent year-over-year in December, to $2.97 million.
Rising costs may seem like a deterrent to some, but the glut of available units in Manhattan means in many ways, this is still a buyer’s market. Those who are eager to invest in high-end housing may also be incentivized by how robust the market has become to plunge in and to vet properties to clear specifications.
One big way to do that? Amenities, of course. State-of-the-art amenities -- including upgraded kitchens, fitness centers, and swimming pools -- are a start, giving properties an edge with prospective renters and buyers. But in truth, modern amenities like this can almost seem like a given in high-end real estate circles, which is why more developers are adopting a go big or go home mentality. For developers and building managers, this means the heat is on. How can they compete in a market so tailormade right now for wealthy buyers? Buildings that offer one-of-a-kind luxuries, like access to private bowling alleys, wall climbing, and saunas, can really cater to the needs of sophisticated buyers and boost sales in the marketplace.