New York City Ultra-Luxury Real Estate – Is The Sky Falling Or…

NYC luxury real estate market

SummaryNYC Ultra-Luxury Residential Real Estate Market Targeted At The Superrich Getting Soft?

Has the market reached a tipping point or is this merely the pause that refreshes?

Is the sky staying right where it’s supposed to be but the prices for apartments located there certainly seem, shall we say, soft?

In-other-words, in terms of the ultra-expensive listings near nine-figures, perhaps the market has reached a tipping point!

For some context, in March 2015 an apartment at the One57 building located in an area of Manhattan known by the nickname ‘Billionaires’ Row’ topped the residential real estate closed sales list at a price of $91.5 million (Source).

Today, in another ultra-luxury building at 432 Park Avenue, ‘full-floor apartments originally listed for $78 million to $85 million have been split in two and priced at approximately $40 million each’. Still certainly not in the affordable range for most of us, but an anecdotal indication that, at least for now, the market has indeed softened.

Further proof? According to Douglas Elliman agent Dolly Lenz who caters to the superrich, the action that’s taking place or more accurately not taking place in the residential real estate market today on ‘Billionaires’ Row’ is “not just slow — it’s come to a complete halt”!

So why has this apparent real estate slowdown in New York City occurred?

  • Were the prices irrational in the first place fueled in no small part by foreign buyers who have recently stepped away?
  • Is the glut of new luxury inventory that’s coming onto the market depressing what had been considered the new ‘must have’ inventory that will soon be old and obsolete?
  • Does it possibly have anything to do with new government rules addressing all-cash buyers?
  • Is it all of the above or perhaps something else altogether?

And this scenario is not unique to New York! 

An article in the New York Times titled, ‘In New York, a Falling Market for Trophy Homes in the Sky‘, takes a closer look…

New York City’s ultra luxury real estate frenzy — with its sky-piercing condominium towers and $100 million price tags — has finally come to an end.

Even with every conceivable amenity, the eight- and nine-digit prices attached to trophy homes with helicopter views and high-end finishes never bore much relation to actual value. Rather, a class of superrich investors primarily drove the market, choosing high-priced real estate as their asset of choice, because it was less volatile than other investments and they could use shell companies to hide their identities.

But today 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.

As the volume of sales at the uppermost level has dwindled, some sellers have made drastic price cuts and some projects have been delayed.

Read the rest of the article written by Michelle Higgins at the New York Times here.

Michael Haltman is President of Hallmark Abstract Service in New York. He can be reached at or at 516.741.4723.

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