New York City is the world's most expensive place to build

New York City isn’t just the most expensive place to build in the world — it’s also one of the most “overstretched” in terms of skilled construction workers available, according to a new report.
The average cost of building in the city was $354 per square foot last year, making it the most expensive in the world, according to Turner & Townsend’s 2017 report on international construction.
The city beat out Zurich for the top spot, where the average cost was $328 per square foot. Zurich was the most expensive city to build in 2015. (The averages combine residential high-rises, office, schools, hospitals and shopping centers.) Construction costs are expected to grow by 3.5 percent in the next year.

The high cost of construction can largely be attributed to labor and materials. The city was second only to Zurich when it came to average hourly wages for construction workers, which came in at just under $100 per hour.

The report does not, however, differentiate between union and nonunion laborers, which is often cited as a determining factor for rates. Nonunion labor is widely considered the less expensive option.
The report also breaks down the cost of building materials, including structural steel beams at $2,359 per ton for a project requiring 100 tons of steel and $116 per square foot for medium-strength concrete. Crain’s reported earlier this month that developers are increasingly opting for concrete, finding the material leads to cheaper and faster construction.

The report identifies New York, along with 23 other markets, as “suffering from a skills shortage.” Last year’s report classified the city and Seattle as the only two “overheated” markets, meaning they faced significant price increases and a shortage of skilled labor. In 2016, New York was simply “hot,” perhaps indicating cooling demand.

Foreign real estate investment in the city reached $14.3 billion in 2016, though there’s some concern that an expected slowdown in Chinese investment — due to a cap on overseas investment and possible tougher trade measures — could significantly reduce that volume in 2017.

Construction spending reached an all-time high of $43 billion in 2016 but is expected to drop slightly over the next few years. The New York Building Congress projects that construction spending will reach $42.1 billion in 2017 and then $42.3 billion in 2018.

Source: Business Insider

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Latest Real Estate News - Market Update Manhattan – 1st Quarter 2017

CONDOS & CO-OPS OVERVIEW:


Coming off an election season filled with anxiety and buyers ending 2016 seemingly unreceptive to unrealistic pricing, the First Quarter of 2017 appeared to unleash pent-up demand with a re-emergence of buyer confidence in the market. 


Buyers this quarter were encouraged by a rising stock market, hopes for strong economic growth, and more rational pricing on the part of sellers, as evidenced by a 4% decline in the overall median sales price. 


The First Quarter of 2017 saw the average sale price in Manhattan overall trend upward to $2,167,000, a 3% gain over the prior year. The number of sales jumped 9% in the First Quarter of the year to 2,945 from 2,711 in the last quarter of 2016 but the number of closed sales declined 5% from the prior year.


The recent period of double-digit gains in sale prices has abated, making way for relative stability in the market place. The under $3mil market made up 83% of all sales activity and this segment had 4% fewer sales, a 3% drop in the average sale price and 4% decline in the median sale price. However, both the $3mil to $10mil category and the over $10mil category posted gains in the average and median sale prices. 

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