Cracks in the market: New York's real estate boom is showing signs of coming apart

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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.

http://www.crainsnewyork.com/article/20160313/REAL_ESTATE/160319958/cracks-in-the-market-new-yorks-real-estate-boom-is-showing-signs-of-coming-apart