Owners & management · 11/02/2026
Starter condos vanish below 125th Street as costs push builders upscale
Corcoran Sunshine data shows almost no new entry-level condos coming to Manhattan below 125th Street over the next three years. Developers cite land near $500 per net foot, all-in costs near $1,200, and mortgage rates around 7 percent. One exception, The Perrie at 234 East 46th Street, accepts FHA loans and has sold over half of its 95 units since 2024.
Reported by The Real Deal · New YorkRead the original ↗
What happened
The Real Deal reported on 11/02/2026 that new starter condos in Manhattan are close to disappearing. Data from Corcoran Sunshine Marketing Group shows that over the next three years, only 3 percent of new condos below 125th Street will be priced under $1,800 per square foot on average, a common threshold for affordability. That works out to 43 units delivered a year, 74 percent fewer than during the previous 10-year period.
The article points to pressure on both buyers and builders. Mortgage rates hover around 7 percent, which widens the gap between cash buyers and those who need financing. Land, materials, labor and construction loans have all become more expensive, and the article cites tariffs and stricter immigration policies as factors in material and labor costs. One developer quoted said land sells for about $500 per net foot and everything else costs about $1,200 per net foot all-in, so $1,800 per foot is roughly breakeven. Developers also said larger units sell faster to buyers who pay cash, and that building more, smaller units per floor costs more in kitchens, bathrooms and mechanical systems.
Conversions of existing rental buildings have also slowed. Under the Housing Stability and Tenant Protection Act of 2019, 51 percent of existing tenants must vote for a condo conversion, up from 15 percent. A few projects have bucked the trend. Related Companies' rental-to-condo conversion in Yorkville, the Strathmore, sold at around $1,700 per square foot. The Perrie at 234 East 46th Street offers one-bedrooms under $1 million, became the first Manhattan building to accept Federal Housing Administration-financed loans, and has sold over half of its 95 units since launching sales in 2024.
People quoted in the piece said many would-be buyers are choosing to keep renting or are turning to co-ops, which are cheaper but often need serious work. One developer predicted condo prices could rise 10 to 20 percent soon. That is a forecast, not a reported fact.
Key facts
- Source
- The Real Deal, published 11/02/2026
- Data
- Corcoran Sunshine Marketing Group: 3% of new condos below 125th Street priced under $1,800 per sq ft over the next three years
- Units
- About 43 sub-$1,800 units a year, 74% fewer than the previous 10-year period
- Mortgage rates
- Around 7 percent
- Conversion rule
- HSTPA 2019 requires 51% of existing tenants to vote for a condo conversion, up from 15%
- The Perrie
- 234 East 46th Street, one-bedrooms under $1 million, first Manhattan building to accept FHA loans, over half of 95 units sold
- The Strathmore
- Related Companies rental-to-condo conversion in Yorkville, selling around $1,700 per sq ft
- Developer cost estimate
- Land about $500 per net foot plus about $1,200 per net foot all-in costs
What it means
Landlords
Converting a rental building to condos now requires a 51 percent tenant vote, so it is a much harder exit than it was before 2019. Owners weighing a sale or conversion should plan around that threshold.
Tenants and voucher holders
Tenants have a strong say over whether their rental building can become condos. With few entry-level condos coming, more would-be buyers are likely to keep renting, which keeps demand on the rental market.
Buyers and owners
New condos under $1,800 per square foot below 125th Street will be rare over the next three years. Options include co-ops, which are often cheaper but may need work, and the few buildings like The Perrie that accept FHA-financed loans.
The highlights
- Only 3% of new condos below 125th Street will price under $1,800 per square foot.
- That is about 43 units a year, 74% fewer than in the prior 10-year period.
- Since 2019, condo conversions need 51% of tenants to vote yes, up from 15%.
Why it matters Landlords
Would-be first-time buyers who cannot find starter condos may keep renting longer, which supports steady rental demand for NYC landlords.
Not known yet
- How many starter-priced new condos are planned above 125th Street or in the other boroughs
- Whether other Manhattan condo buildings plan to accept FHA-financed loans
- Exact asking prices and remaining inventory at The Perrie
- Whether any city or state programs aim to support entry-level condo construction
Background
In New York City, condos and co-ops are owned differently. A condo buyer owns the apartment itself as real property, while a co-op buyer owns shares in a corporation that owns the building and must usually be approved by the co-op board, which can set its own financial requirements. Because of those rules, co-ops often trade at lower prices than comparable condos, and condos are generally easier to finance, rent out and resell.
Buildings in this story
- 234 East 46th Street · building facts and open city records
Summary written by Bulwark from The Real Deal · New York’s reporting. The original story is at therealdeal.com. This is general information, not legal advice.
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