Record Shortage of Homes on the Market Despite Construction Boom

May 12, 2015 — A cursory scroll down our home page gives you but a glimpse of all the new buildings being constructed in New York. It's undeniable that we've seen a construction boom, with co-ops and condos rising all over Manhattan, particularly luxury towers. But despite all the new apartments available for the taking, Crain's reports that there's a record shortage of homes on the market in Manhattan — and it's the luxury market that's helping to skew the numbers: "Unlike the last construction peak, in 2008, when developers generated more supply to meet demand, a number of factors have converged to warp the economics of owning and selling a home in Manhattan — and in the rest of the boroughs — making it more expensive for businesses to retain the highly skilled workers who can keep the city's economic engine humming." According to the article, of the 850,000 apartments in Manhattan, only "5,200 were available for sale in the first quarter of 2015. That's 26 percent below the historical average and just 25 percent above the low of 4,164 in 2013." Fueling these dismal results is the fact that, like it or not, co-ops and condos together make up just 25 percent of available apartments in Manhattan. The rest are rentals. With resale inventory stagnating, potential sellers are skittish about putting their own homes up for sale. Who can blame them? "Because there are so few listings, sellers are nervous that they won't be able to find another home. Even if they do, those apartments one step up will be pricier as well. As a result, they're holding on to their apartments, further subtracting from the potential number of listings," the article explains. And that vicious circle is going to keep pressure on those prices.