Long Island Condo Market

March 7,2018

Media

The Ritz-Carlton Residences, North Hills, was featured in a story in The Real Deal about condominium developments on Long Island. The Real Deal analyzed Long Island condomoimum developments and has found that the typical Long Island condo buyers are either empty-nesters looking to downsize or young people being priced out of New York City. And they both want one thing: to avoid the headaches of managing a big house. 

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You’re seeing all these people, from baby boomers to whatever age group. Condo living, multifamily living, is the future,” said Joe Graziose, executive vice president of residential development and construction for RXR.

For me, my mom and dad said, ‘You gotta buy a house. Don’t ever live in a rental or a condo.’ Those days don’t exist anymore,” he added.

The easy life

Several experts confirmed what’s been trending in recent years: the typical Long Island condo buyers are either empty-nesters looking to downsize or young people being priced out of New York City. And they both want one thing: to avoid the headaches of managing a big house.

Eighty percent of current sales at The Ritz-Calrton Residences, North Hills, were to empty-nesters who came from within a 10-mile radius of the site, according to Graziose. He said the other 20 percent were mostly families with school-aged children, from the city or other areas of Long Island.

The owners are buying into a lifestyle, said Gail Holman, associate real estate broker with Daniel Gale Sotheby’s International Realty, which is handling sales and marketing for the project.

“They’re people who can afford a $2 million house, but they don’t want the upkeep,” she said, noting the high-end construction of the units. Residents there don’t have to worry about the gardening or opening or closing the pools. They can use the 25,000-square-foot clubhouse, and each building houses its own clubroom and gym. There’s also a Cadillac Escalade reserved for chauffeuring residents to and from the Manhasset train station, or to the nearby upscale Americana shopping center, she said.

Phase I of the North Hills project, located between the Long Island Expressway and the Northern State Parkway, is nearly sold out, with fewer than five units remaining. Prices for the two- to four-bedroom units started at $1.5 million and peaked at $4.9 million.

Floor plans initially showed 126 units of about 1,600 to 1,700 square feet, but 16 buyers purchased two units to combine them for more space. That led RXR to tweak Phase II designs to include larger units, up to 3,800 square feet. Of the 120 on offer for the second phase, 42 contracts are already out, said Graziose. Delivery is currently scheduled for the first quarter of 2019.

At RXR’s Beacon at Garvies Point project — with 167 units priced from $575,000 to $2.5 million — 40 condos have already sold. Move-ins are planned for fall 2019.

Strength in the numbers

The overall Long Island condo market, excluding the Hamptons, saw the shortest average marketing time in more than a decade, and the fastest market pace in more than eight years, according to the fourth quarter 2017 Douglas Elliman Long Island report. Days on the market dropped dramatically, from 95 to 81 year-over-year, while the absorption rate also declined 20.4 percent, from 4.9 to 3.9 months.Price indicators were mixed, however, as the average sales price dropped 9.8 percent to $345,449. But the median sales price held steady, increasing 0.8 percent to $277,500.

As for data on the luxury market for both single-family homes and condos, listing inventory declined year-over-year for the seventh consecutive quarter. As with the overall condo market, days on the market and the absorption rate both declined, 5.5 percent and 11.9 percent, respectively, to 10.3 and 10.4 months.

The median luxury sales price, representing the top 10 percent of all sales (in this case, those priced at $800,000 and above), rose 4.7 percent in the fourth quarter, to $1.02 million, over the past year, according to the report.

“Over the past several years, we have seen greater acceptance of high-end condo [pricing],” said Jonathan Miller, president and CEO of Miller Samuel, which produces the Elliman report. “Renters and buyers from the city, priced out and used to multifamily living, have created a new source of demand for luxury condos.”

Published: March 6, 2018

Read the full article on The Real Deal