"Lack of inventory," "nothing to show out there," that's all I hear when I talk to my fellow brokers, that's all I've been hearing for more than a year. The fact of the matter is... beautiful, "move-in ready" apartments are rare and go quick, which I just experienced at The Chelsea Stratus, where my recent listing had an accepted offer within three weeks' time. This is largely due to a huge decline in new construction from its peak in 2008, when permits for 33,911 units in 2,434 buildings were issued. The department of buildings issued permits for 8,936 units in 2011, a 33 percent increase from 2010 when permits for only 6,727 units were issued, but still way below necessity.
According to Building Congress President Richard Anderson, "The Building Congress has consistently held that New York City must produce an average of 20,000 new housing units annually simply to keep pace with population growth and to replace aging or lost housing stock." But there seems to be some great news on the horizon, in the first two months of this year alone a total of 12,967 construction permits were issued. That is up 14 percent from the first two months of 2011.
These permits included both alteration work as well as construction of new buildings. Also, demolition permits in the five boroughs jumped to 328 in January & February, up 36.7 percent from the same period a year ago, according to the city's Buildings Department. "Demolition permits are a precursor to new buildings," said Robert Li Mandri, commissioner of the city Buildings Department. "It means we will see more building this year." Another positive indicator, the number of permits for new buildings across the city soared 42.7 percent to 204 compared to a year ago.
It seems that the principles of supply and demand are well intact here, the market has been clamoring for great new developments and it appears we're about to get our wish. The only problem being the length of time it takes for developers to respond to market needs and to actually be able to get these buildings up. We won't actually feel the economic impact of these new permits for at least a year or maybe several. The immediate impact being a spike in construction jobs in the city. Despite however long it'll take, I'm excited to see the incredible new projects going up. I'm keeping my eye on several developments like The Verizon Building, the tallest building in Chelsea, which I recently checked out.
The developer is finishing the spaces as if they were his own home. There's also another project on Charles St., they're saying it's going to be "the 15 CPW of downtown" (the best building on the UWS, arguably the best in the city). And I can't wait to see what happens on the site of the St. Vincent's Hospital, where developer William Rudin is vying for zoning variances to turn the 13 acre site into 450 luxury condominiums plus 11,200 square feet of retail, a 564-seat elementary school, a neighborhood medical facility and a 15,000-square-foot public space. With a successful track record in recent developments and a prime location in the West Village, Rudin's project, if approved, is sure to cause a stir in the real estate community.
How about you? What new buildings are going up in your neighborhood? What are you keeping your eye on? Leave me your thoughts in the comments... I'd love to hear from you.