Manhattan's growing inventory of ultra-luxury condominiums has another big developer seeing signs of a glut.

Horsham-based Toll Bros. Inc., the largest U.S. luxury-home builder, is zeroing in on smaller apartments with lower prices in Manhattan after watching expensive units sit on the market, said David Von Spreckelsen, the New York division president of the company's City Living unit. Toll Bros.' latest project in Chelsea will have an average asking price per square foot less than at new buildings in the rest of the borough.

"The days of super pricing and of raising prices every other week, I think, are probably past," Von Spreckelsen said in an interview. "Supply has started to catch up with demand."

Toll Bros. is switching gears as sales of new Manhattan condos slow - and prices continue to escalate - in a building boom.

Developers have focused almost exclusively on larger and lavish apartments as a way to capture demand from ultra-wealthy investors who view New York real estate as a secure place for cash.

While record-shattering sales such as the $100.5 million penthouse at Extell Development Co.'s One57 tower have grabbed headlines, there's a limited pool of billionaire buyers.

"We're starting to see an oversupply of really large units and really expensive units, and we think those are sitting on the market," Von Spreckelsen said.

Other developers have cited a possible oversupply in the market that's affecting their decisions. Ziel Feldman, chairman and founder of HFZ Capital Group, said he didn't want to "be hostage to a $10-to-$20 million condo market" at his full-block site near the High Line in West Chelsea. Plans call for apartments of 1,500 to 2,000 square feet, with prices starting at less than $4 million, he said in May.

The 53 units for sale at Toll Bros.' Chelsea building, located between Fifth and Sixth Avenues, will start at $1.5 million, Von Spreckelsen said. Asking prices for the apartments, almost 80 percent of which will have one or two bedrooms, will average $2,200 a square foot. That's less than the average of $2,663 for new-development listings across Manhattan in the second quarter, according to Halstead Property Development Marketing.

Fifty percent of new-development listings were priced at more than $5 million in the three months through June, according to Halstead.

"We're seeing it in the market data that we observe, and we're seeing it in some of our buildings," he said. "There only a few buyers who are going to have north of $7 million to spend on an apartment."