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Speaker 1: Global business news twenty four hours a day. It's Bloomberg

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Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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Speaker 1: I'm Charlie Peller. To move Laura Now for both the

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Speaker 1: down Jones Industrial Average and the SMP five hundred index.

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Speaker 1: Nestack is higher stocks for fluctuating as investors look past

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Speaker 1: increased stimulus by the Bank of England to tomorrow morning's

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Speaker 1: jobs report for clues on the strength of the economy

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Speaker 1: and the federal reserves. Next move complete coverage heading into

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Speaker 1: that job's report. That job's report, of course, deliver at

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Speaker 1: an eight thirty am Wall Street time, and yes analysis

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Speaker 1: as you would expect from Bloomberg right after we get

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Speaker 1: the jobs data. The tenure up eleven thirty seconds. Looking

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Speaker 1: at the yield now of one point five percent, Gold

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Speaker 1: up to thirty ounce, the thirteen sixty two a gain

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Speaker 1: of two tenths of one percent, and crude oil West

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Speaker 1: Texas Intermediate up two point three percent now advancing ninety

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Speaker 1: cents of arral to seventy seven. Again recap the SMP

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Speaker 1: five index little change down a point. I'm Charlie Pellett.

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Speaker 1: That's a Bloomberg business flash. You're listening to taking Stock

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Speaker 1: with Kathleen Hayes and Pim Fox on Bloomberg Radio. New

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Speaker 1: York's condo slowdown is up ending the market for one

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Speaker 1: of the most coveted assets in tightly packed Manhattan, and

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Speaker 1: that is Land. Sales of parcels for development are plummeting

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Speaker 1: as builders seeing signs that a once hot property market

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Speaker 1: is cooling, offer prices that sellers won't agree to. A

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Speaker 1: triviic story to Day Bar Bloomberg News colleague Sarah Maholland

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Speaker 1: and David Levitt. I want to welcome back to the

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Speaker 1: show now someone who can talk to us about the

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Speaker 1: trend in Manhattan when it comes to land, when it

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Speaker 1: comes to luxury condo prices, and what it might portend

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Speaker 1: for other hot markets across the country. Jonathan Miller is

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Speaker 1: President and CEO of Miller Samuel. Welcome. Great to be here.

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Speaker 1: So I think you in your you know the reports

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Speaker 1: that you do on Manhattan, say as Rentals, Brooklyn, et cetera,

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Speaker 1: You've been kind of foreshadowing and touching on at least

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Speaker 1: part of this trend for a while. John, what's going

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Speaker 1: on well, I think what's happening. Um Really, the slowdown

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Speaker 1: began about a year and a half, two years ago,

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Speaker 1: but landowners are really holding out for higher prices. It

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Speaker 1: takes when a market transitions, it takes a couple of

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Speaker 1: years they for them to uh capitulate to the new condition.

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Speaker 1: Back in two thousand and fourteen, we were talking about

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Speaker 1: how too much was being built at the high end.

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Speaker 1: At that point we started to see, um uh sort

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Speaker 1: of this this pullback in future construction. But you have

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Speaker 1: to remember that so much is in the pipeline that

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Speaker 1: it it doesn't feel like it's slowing down to the landowner,

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Speaker 1: um necessarily um uh. You know, they tend to lag

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Speaker 1: reality a bit by a couple of years. What kind

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Speaker 1: of market are we talking about here? There's some prices

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Speaker 1: so that we understand about the condo market. It is

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Speaker 1: not a homogeneous industry by any means. No, it isn't,

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Speaker 1: uh so the way to think of it. And and

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Speaker 1: really the focus of new development and the land uh

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Speaker 1: prices that have been were chronicled in the Bloomberg story.

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Speaker 1: You're really looking at a market that's averaging right now

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Speaker 1: about three thousand dollars a foot for luxury condos the

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Speaker 1: low end foot and then you know it's up to

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Speaker 1: five six thousand a foot UM, So you're really talking about,

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Speaker 1: you know, something in the six really starting at you know,

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Speaker 1: five six million dollars and up prem there that market

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Speaker 1: is has really been overbuilt UM and is sort of

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Speaker 1: night and day with the market to the blow that

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Speaker 1: in price. The softness of the Manhattan market is really

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Speaker 1: isolated in the top say seven eight percent of the

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Speaker 1: market where truly starts at four or five million dollars,

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Speaker 1: and that's where this slowdown is coming into play. Units

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Speaker 1: um are just not not moving. The volume of contracts

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Speaker 1: has fallen sharply, and that backs into land when when

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Speaker 1: you know, the the high end market isn't getting the

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Speaker 1: activity or volume, it doesn't justify the land price, and

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Speaker 1: the land seller takes a couple of years uh to

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Speaker 1: get with the program, so to speak. You know. Our

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Speaker 1: Bloomer News story points out that a lot of what

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Speaker 1: has driven these these gigantic buildings and luxury condo buying

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Speaker 1: is overseas investors who want to park their money outside

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Speaker 1: their own countries. Right, We're trying to slow down, and

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Speaker 1: the oil prices have fallen so much has happened that

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Speaker 1: money apparently has has cooled off, and that's that's money

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Speaker 1: has been seen again in other parts of the country

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Speaker 1: as well. What does this mean if I'm an investor

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Speaker 1: in the sense of thinking of buying an apartment in

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Speaker 1: New York or San Francisco or Boston, or if I'm

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Speaker 1: an investor in commercial real estate or apartment buildings, what's

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Speaker 1: the implication. Well, I think the implication is that the

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Speaker 1: era of this super luxury sort of no holds barred

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Speaker 1: on prising, that era has officially ended. That we we

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Speaker 1: we we certainly are having sales in you know, sort

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Speaker 1: of north of five seven million dollars a year UM

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Speaker 1: in this market and other markets, but it's nowhere near

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Speaker 1: the velocity that it was before. And the way that

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Speaker 1: I would think of it as is that the period

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Speaker 1: we went through was the anomaly, and what we've done

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Speaker 1: is returned to um a more historically sustainable level of activity.

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Speaker 1: We just got a little bit over excited the market itself.

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Speaker 1: UM After you know, three or four years of drought

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Speaker 1: of no none of this kind of activity after the

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Speaker 1: financial crisis, we had this three or four year boom,

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Speaker 1: and that boom has passed um the balance of the market.

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Speaker 1: South of five million dollars, we're seeing steady, regular activity

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Speaker 1: and when you get into the one to three million

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Speaker 1: dollar range, it's pretty pretty uh, there's a fair amount

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Speaker 1: of activity. This is something we're seeing across other housing

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Speaker 1: markets like Miami, San Francisco, l A. Housing markets in

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Speaker 1: the new development space are soft at the top, and

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Speaker 1: that is, uh, that is a US phenomenon from the

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Speaker 1: lender perspective, Jonathan, what's uh, what are their ground rules

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Speaker 1: right now? Well, so lenders, So what's really interesting without

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Speaker 1: this whole process is commercial lenders for construction loans to

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Speaker 1: build these buildings were largely on the sidelines this in

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Speaker 1: this cycle sort of grappling with the legacy of bad

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Speaker 1: lighting decisions in the last cycle. And really the player

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Speaker 1: has been financial services institutions, Wall Street, sovereign wealth funds,

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Speaker 1: private capital And in my anecdotal view January one, I

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Speaker 1: think everybody woke up in that realm and looked out

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Speaker 1: the window and saw seven or eight bill things being

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Speaker 1: built around them and really grew concerned. And so right now,

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Speaker 1: financing availability for this is really been curtailed. And you know,

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Speaker 1: it's just a market that you know is overbuilt. That

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Speaker 1: you know, the supply and demand is causing the supply

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Speaker 1: to slow down in terms of what's coming into the market.

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Speaker 1: Thank you very much. Jonathan Miller is the president and

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Speaker 1: the chief executive of Miller Samuel based in New York.

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Speaker 1: He's explaining the New York City condo slowdown is up

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Speaker 1: ending the market for one of the most coveted assets

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Speaker 1: in real estate, and that's land. This is taking stock

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Speaker 1: and this is Bloomberg. Sports teams watch films of their

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Speaker 1: games to see how they can improve and avoid mistakes.

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Speaker 1: Why not businesses? Small Business in Focus with the founder

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Speaker 1: of a third party video surveillance company that provides game

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Speaker 1: film for business