With Manhattan Luxury Property Hitting Highs, Some Fear Air Is Getting Thin

That is skewing Manhattan's traditional real-estate barometers. The average price of newly developed condos is expected to pass $7.2 million in 2017, up from $4.8 million in 2014 and $1.9 million in 2008, according to New York property-tracking firm CityRealty.

Land, meanwhile, has gotten so pricey that developers buying many new sites must expect to sell units at more than $3,500 a square foot to make a profit, real-estate experts say--three times the break-even level of a few years ago.

There are signs demand for this rarefied product might be nearing its limits. The 1,004-foot green glass tower One57 remained about 25% unsold for much of last year. Its builder, Extell Development Co., lowered its expected total revenue from the building by about 4%, or $100 million, in part because of the slowdown, according to filings made with the Tel Aviv Stock Exchange in Israel, where Extell has issued $300 million in debt.

But for now, times are good for developers. Last week, Vornado Realty Trust Chief Executive Steven Roth told investors his project at 220 Central Park South secured $1.1 billion in sales commitments in just six weeks on the market. With just one-third of the building committed, then, it has already paid for itself, according to calculations based on securities filings.

"We are doing beyond well," Mr. Roth said.

At One57, Extell founder Gary Barnett said sales have picked up substantially in the past couple months. He declined to discuss specifics but said he hoped to fully sell out the tower by the end of the year.

Already, One57 is one for the record books. The building's penthouse fetched $100 million in January, the most expensive sale for a single unit ever in New York City. The nearly 11,000-square-foot duplex on the 89th and 90th floors boasts 24-foot-high walls of glass on three sides and sweeping views of Central Park, New Jersey, Long Island and the Atlantic Ocean. It features six bedrooms, six baths, a curved staircase, two powder rooms and access to a pool at a Hyatt hotel in the building, according to offering documents.