New York’s condo slowdown is upending the market for one of the most coveted assets in tightly packed Manhattan: land.

Sales of parcels for development are plummeting as builders, seeing signs that a once-hot property market is cooling, offer prices that sellers won’t agree to. Just 48 land deals were completed in the first half of 2016, compared with 79 in the year-earlier period and 73 in 2014, according to brokerage Ariel Property Advisors. That may be a sign of a broader real estate slowdown to come, since land is often a leading indicator for the rest of the market.

“Land is always one of the first asset classes to drop in value when a market is transitioning,” said Robert Knakal, chairman of New York investment sales at Cushman & Wakefield Inc. It’s “indicative of the perspective that developers have of what the market is going to be like two or three years from now.”

Real estate investors bid up prices for Manhattan lots to records in recent years as they raced to build condominiums aimed at wealthy individuals, many of them foreigners seeking a haven to park cash. The soaring land values in turn fueled ever-higher prices for condos as developers sought to recoup their costs. Now, sales of high-end apartments have cooled as buyers from areas such as China and Brazil pull back amid slowing economic growth, a strengthening U.S. dollar and a prolonged slump in oil.

Residential properties, typically the most profitable use of Manhattan plots, are the primary drivers of land values in New York, according to Jon Epstein, a principal at brokerage Avison Young. A year ago, the baseline assumption was that a condo project could generate $2,500 per square foot when completed, he said. Now, that number is closer to $2,100. Bids for development sites are coming in 20 percent below what sellers were getting at the peak, leading to a stalemate, he said.

“You’re not going to really see any real evidence of this,” Epstein said. “Land sellers don’t sell if they don’t get near their ask.”

Lender Pullback

Lenders are increasingly skittish when it comes to financing the construction of luxury residential buildings and other risky developments. Projects with approved designs and fully fleshed-out development plans are struggling to get bank funding, according to Scott Rechler, chief executive officer of RXR Realty LLC, which has about $15 billion of real estate throughout New York, New Jersey and Connecticut. It’s even more difficult to get banks comfortable funding the acquisition of a plot of land with no clear outcome in mind, he said.

As a result, there may be fewer cranes dotting the New York skyline over the next few years. That could make space for savvy developers to get a jump on the next market upturn, according to Samvir Sidhu, CEO of Megalith Capital Management, whose projects in the works include a condo building on the Upper West Side and a five-unit loft conversion in Tribeca. Megalith is evaluating opportunities to work with people who have recently acquired land and are looking for partners, he said.

“The phone does ring reasonably frequently with folks that have acquired land or are in contract to acquire land, and recognize that the market has changed,” Sidhu said. “It could be advantageous to be one of the few projects starting in 2016.”