With luxury sales being the slowest in years developers are starting to sweat with billions of dollars in debt coming due. One tactic is to obtain short-term inventory loans to try and ride the wave to a better market although it can make matters worse due to the higher interest rate. The oversupply of high-end units, new state taxes, a drop in overseas buyers and renewed fears of a pied-à-terre tax suggest that debt collectors may come calling before new buyers do. Most construction loans have three-year terms plus two one-year extensions, according to bankers, so much of the $7.24 billion that developers borrowed in 2015 and 2016 will be coming due over the next two years.
If you're an investor it could be worthwhile purchasing a bulk number of units in the right building for a nice discount.