By Holly Dutton
Home buyers in the highest echelons are taking spending to record levels in New York, according to a new report from Stribling & Associates. And a lack of choice apartments is squeezing prices further north as the uber wealthy vie for a slice of the very best of the Big Apple’s real estate.
“The inventory is so horrendously low,” said Michael Corbett, a celebrity real estate correspondent who co-hosted a party with Trulia.com last week at the former penthouse home of singer Billy Joel, at 128 Central Park South.“At the luxury end of the real estate market, there were only 10 properties in the $10-15 million range that I could show my clients recently.ˮ
Joel’s one-time home is currently listed by Ellen Schatz and Howard Margolis at Prudential Douglas Elliman for $11.9 million. Kirk Henckels, EVP and director of private brokerage at Stribling, said the overall lack of luxury inventory in Manhattan is closely tied to the financial crisis of 2008.“After the fall of the Lehman brothers, developers stopped building,” he said. “Condo development is a real pipeline business; it takes two years to do something.”
Releasing Stribling’s mid-year luxury market report Henckels noted that, despite a drop in overall sales in the $5 million and up market, the sale prices has reached an all-time high of $10,000 psf, shattering the previous record of $6,000 psf.Foreign buyers looking for safe haven investments are increasingly snapping up the city’s trophy properties, according to Henckels,. “The $88 million sale at 15 Central Park West, which was the real record-breaker, was a foreigner,” said the luxury sales veteran. “Once that ante is up, it starts happening.”
Now there have been two or three sales over $10,000 p/s/f.”The Stribling report focuses on the first half of 2012 when condos accounted for 53.6% of New York apartment sales, with co-ops and townhomes following with 26.8% and 19.6%, respectively. The report noted that several luxury condo projects — including Extell’s One57 and 18 Gramercy Park, the new Zeckendorf development — will be arriving on the market in coming months and will replenish inventory.
The prediction is that will spark another rush of sales, especially in the $20 million and up category. And it’s not just foreigners, but the wealthy with liquidity “sitting on the sidelines” who are contributing to the booming luxury market.“Once they thought it was socially acceptable, they starting spending on luxury items again,” said Henckels. “The money has to be invested somewhere and in something,” he writes in the report. “Quality is the key factor, as has also been evident in the art and jewelry markets which have also seen record sales, but only for the very best in category.”
