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Hark, It's The 'Death Knell' For Ultra-Luxury NYC Apartments Built For Billionaires
By
Jen Chung
Published Jul 12, 2016
Modified Jul 12, 2016
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Jen Chung / Gothamist
By
Jen Chung
Published Jul 12, 2016
Modified Jul 12, 2016
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Finally heeding the prayers of the rent-poor commoners, the real estate gods have wrought famine and pestilence upon "Billionaire's Row", the super-luxe, typically overcompensatingly tall real estate offerings built for billionaires. Today the NY Times has an obituary on the properties, with price tags in the eight- and nine-figures. Real estate appraiser Jonathan Miller explains, "It’s not that there aren’t any buyers at this level. It’s that there aren’t buyers willing to pay 2014 prices."
With the economy booming, real estate had been a haven for cash-flush buyers to invest in. So developers created more and more outrageously extravagant properties (some made possible by NYC taxpayers). But the fun had to end sometime; from the NY Times:
[A] four-year construction boom aimed at buyers willing to spend $10 million or more has flooded the top of the market just as global market turmoil has caused wealthy investors to pull back and the federal government has moved to scrutinize some all-cash transactions.
It’s not just the volatility of financial markets that has big spenders sitting on their wallets. Other global trends that have put the lid on high-end spending include China’s tightened restrictions on capital outflows, uncertainty surrounding Britain’s decision to leave the European Union, lower oil prices curbing wealth in the Middle East, and tax increases and other measures that have driven up property transaction costs in some countries.
"Broker to the superrich" Dolly Lenz "attributed the lack of activity along the Midtown corridor to oversupply, little differentiation among glassy ultraluxury units and peak pricing." Lenz calls the current situation "a death knell." But instead of bells, it's being performed by tiny violins!
One broker at Compass told the Washington Post, "We’re now seeing thousands of very expensive new condominiums sit empty. That hasn’t happened in years."
Desperate developers are slashing prices and even doing the unthinkable—dividing full-floor apartments! "At 432 Park Avenue, the tallest residential tower in the Western Hemisphere, full-floor apartments originally listed for $78 million to $85 million have been split in two and priced at approximately $40 million each," according to the Times.
Of course, the developers have already put their stamp on changing (destroying?) the skyline and getting deals from city officials to create luxury condos while there's a distinct lack of supply of affordable housing, though the de Blasio administration is trying to address that. A data scientist at Streeteasy had this depressing insight: "The supply-demand imbalance in the Manhattan market is troubling. It is creating very heated competition for moderately to lower priced homes, while luxury homes suffer from longer time on market and declining prices. Until supply and demand begin to align, we expect further declines among luxury properties and perhaps even stronger competition to swell for homes under $1 million."
Guess we better stock up on foldaway beds behind curtains for $1375/month.
Tagged
luxury condos
manhattan
billionaire's row
real estate
one percent
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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