New York City’s real estate market is showing telltale signs of slowing after an extraordinary three-year run that saw average office rents in Manhattan jump by 20%—from just under $60 per square foot to more than $70—and the median home price in the borough climb to a record-high $1.15 million from $800,000.
The pessimism centers on residential development sites amid concerns the city is overstuffed with high-end apartments.
Among the recent string of sobering reports is news that a 10-story building in Brooklyn Heights—one of three large properties being sold by the Jehovah’s Witnesses there and in Dumbo—will fetch a price 25% below the $300 million or more for which it was initially projected to sell. The parcels are considered prime places for both residential and commercial development.
Brokers said the decrease mirrors a precipitous drop in the value of land sites in the city by 20% to 25% so far in 2016. These brokers declined to speak on the record because several are marketing such properties and don’t want to openly disparage the products they are trying to sell.