“Shadow Condos” – Potential Glut of New Condos Coming To Market

Another Crains article is getting the Blumstien Bump today, though this time because it paints a picture more tepid and responsible. 

Shadow Condos, a riveting take on the future of Manhattan and Brooklyn sales. Limited to a local supply model, this article has good resoning on its side to warn of a potential drop in sale prices as new developments are back in play as lenders have returned to support near completed projects and closings are beginning on once endangered developments. 

Aparently, there are about 6,500 units that, were they to flood the market simultaneously, would increase inventory 70% and subsequently drop sale prices across the board. 

It will be interesting to see how this plays out, as lenders and developers want to be made whole agian (requiring closings and fat mortgage checks), but if they rush in as a crowd they will be shooting themselves in the foot as accelerating market inventory will lower the sale price.  I do not have the graphs in front of me or equations to take derivatives and find out the how markets will change, but the premis is this:  Would you rather resell one pie at $10 a day for 10 days, or sell 10 pies in one day for $5 apiece?  I suppose that depends on your piece of the pie and how hard the bakers are breathing down your back to get paid…