Luxury Condo Development in New York Fails
A $12 million luxury condominium project in Loudonville, NY has been stopped indefinitely and the developer is saying “luxury living and this market just don’t mix.” The project was started October 2008. Two weeks later, the financial world collapsed and has yet to recover. Buyers suddenly couldn’t access financing and withdrew their letters of intent to purchase. By January, the development had come to a standstill.
The development was pitched as “the perfect canvas for showcasing each homeowner’s personal sense of style. Large windows, gracious floor plans, and high ceilings create airy and inviting master suites. Exquisite interior details in every room evoke an atmosphere of serenity. Your home at The Loudon House is your personal sanctuary.”
I am thinking it was just in time – the development is barely started, and if they have any sense, they will tear it down and turn it into affordable housing. The luxury real estate market has been seriously over-built and I don’t see this one being viable any time soon. Financing is becoming more and more difficult for these types of development, and until the liquidity crisis in the banking system is over, we are not going to be seeing any more 125% homeowner loans and mortgages.
It is easy to think of the luxury real estate market in New York as being exclusively city-based, but the countryside is becoming littered with failed developments and the assumption seems to be that “it will all get better soon if we just pour enough money into the system” but that is a big if, because I do not see a light at the end of the tunnel just yet.
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Comments on Luxury Condo Development in New York Fails
The same can be said for Las Vegas. When the boom kicked in the highrise projects took off like wildfire. They coined the term the “Manhattanization” of Las Vegas, which never really made sense to me. I understand Manhattan’s skyline, but even in the amenity clad highrise buildings, one would still need to get in their car and drive to do just about anything you needed to do, unlike NY. Now we have several projects hurting on sales, Cosmopolitan, Turnberry Towers & Fontainbleu in foreclosure. The Palms Place is offering owner financing. Plus the behemoth of them all, the City Center is still coming. eek!
We are badly over-built just about everywhere. I see an awful lot of part-finished projects around the world, but some of them were too far advanced to afford to stop part way through. A buyers market though.