But with only a few months left until the building’s completion, just 15 of the 31 units are under contract or reserved, eight of them with private pools, although sales began in 2014. Since then, the developer has hired three different real estate brokerages to handle sales; the most expensive unit under contract so far is a $10.9 million duplex.
“Our approach is not to cut back,” Mr. Chan, also known as Chan Soo Khian, said of the shifting market. “In fact, what I’ve done is up the ante. A well-crafted building will speak for itself in a difficult market.”
In Manhattan’s new development scene, there are bold bets aplenty, but 2014 it is not. The ultraluxury market, with prices north of $10 million, has softened since the rise of billionaire’s row along 57th Street, and developers are taking note: Some are doubling down on ultraluxury and seeking new ways to stand out, while others pursue an underserved group – buyers willing to shell out between $1 million and $3 million for an “entry-level” home.
Builders who aim somewhere in the middle — in the $5 million to $10 million range — are feeling the tightest squeeze, because of oversupply and a dearth of buyers. And those with buildings under way are facing a tough choice: stay firm on pricing set when the market was stronger, with the risk of getting lost in the mix, or offer concessions to move what hasn’t sold?
Recent data tell a tale of two markets. The median sales price for new development in Manhattan rose to $3.3 million in the second quarter, up a staggering 22.8 percent from the same period a year earlier, according to a Douglas Elliman report. At the same time, the average listing discount, or price drop, for new development was 7.5 percent — far more generous than it was the first quarter, when brokers discounted an average 2.8 percent. A year ago, agents were seeking an average of 1 percent above asking price.
“The expectation was that there are so many billionaires in the world, they’re a dime a dozen – and that’s not what happened,” said Jonathan J. Miller, a New York real estate appraiser.
The record prices of the last few years were driven in large part by contracts for exceptionally expensive units signed as far back as 2013, often before construction began, and because they have taken years to close, “they’ve been padding the market,” Mr. Miller said.