Living in Starchitecture

New York magazine’s S.Jhoanna Robledo breaks down who it is buying all those new Manhattan condominiums. (Crude synopsis: it’s single people who work in accounting and finance.) It’s a changing market, that’s for sure. For instance:

New York is—unlike, say, Miami or Las Vegas—a city of local buyers. Investors make up a much smaller slice of the pie here, maybe 4 percent (compared with up to 40 percent in those other cities). The new condo buyer is also much less neighborhood-driven than New York buyers have traditionally been. The building, rather than its site, is king. “It’s no longer truly about location alone,” says Corcoran Sunshine Marketing Group president Kelly Mack. Buyers swap the Upper West Side for Tribeca, Chelsea for Murray Hill, the East Village for Prospect Heights. “It used to be our competitors were other buildings on the Upper East Side,” says Orin Wilf, the developer of 170 East End Avenue. “[Now they’re] all over.” Toby Klein of Two Trees Management, which has sold off units in three condos in Dumbo, says the now-coveted neighborhood didn’t see outsiders—investors and foreigners alike—six or seven years ago. “We were strictly a local story,” she says. These days, only a quarter of its contracts are from the area.

Some thoughts about this article:

  • I’m very surprised that the piece points out how weak the dollar is for foreign investors, yet the percentage of foreign buyers in many of these condo projects is in the single digits. That is puzzling to me as the buzz throughout the industry is that foreign buyers are gobbling up Manhattan.
  • As far as location not being as important, that is certainly possible but I believe that is more a result of the growing number of “hot” neighborhoods and less about buyers not caring about neighborhood. They are just more open to looking outside of their “favorite” ‘hood these days.
  • I am also seeing a greater number of younger buyers and single women but this is not a new trend. This has been happening for the past eight years as the NYC market has been booming.
  • I am also seeing retirees coming back to the city and families increasingly forgoing the suburbs, particularly as the style of new developments has made great strides to accommodate their lifestyles.

All in all, a very positive piece for the NY real estate market but I still think there is more foreign money coming into the city now than appears in this article.

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