I’m currently working with two high-end buyers, one couple in the $10-14 million range and another in the $20 million range. There is plenty of inventory to peruse at the $10-14 million range and less to see in the $20 million range.
The prices also don’t always seem to jive with what the property offers. Robin Goldwyn Blumenthal points out that the market above $5 million has seen greater appreciation than the rest of the
market (18% from same period last year…WOW!!!).
Just look at the numbers from Manhattan, America’s apartment mecca. The average price per square foot for a condominium — and most of the new buildings are condos — continued a long climb in the third quarter of this year, to $1,171 per square foot, pushing the median price of a unit to more than $1 million. And that’s just the median. It’s increasingly common to see sales for $4,000, $5,000 and even $6,000 per square foot.
In the upper 10% of the New York market — including cooperatives, long the city’s mainstay — the average sales price surged 18% in the third quarter from the level a year earlier, to $4.5 million, says Jonathan Miller, CEO of Miller Samuel, a New York real-estate appraisal firm.
With a dearth of available apartments in grand, prewar properties along Park and Fifth Avenues, buyers increasingly are clamoring to get into the many new steel-and-glass complexes going up all over the city. The $20 million-and-up segment is especially coveted — "statement homes," as some call them. "Everyone is trying to find out where those are and ‘How do I get my client into them,’" says Sharon Baum, director of the exclusive property division of the Corcoran property brokerage in New York.
Let’s look inside those numbers… first of all we are dealing with a HUGE spread here when grouping all properties over $5M in NYC ($5M-$45M is indeed a big spread!). Secondly, we are also dealing with a smaller number of transactions in this spread than in the lower end of the market (Ha! Under $5M is the “lower end”…feeling poor?) so that one big sale of $30-40M could indeed have a large effect on the overall numbers reported.
The combination of these two factors, a big spread and fewer transactions, take the bite out of the statistics in my opinion. Additionally, as I tour these properties with my clients, there appears to me incredible disparity in asking prices depending on who the owner is (some big egos) and who they have hired as their listing agent (sometimes even bigger egos). My feeling about the ultra luxury market… there just aren’t enough ultra wealthy buyers to absorb all of this ultra high-end property. I expect to see more inventory spending a longer period of time on the market and only the absolutely spectacular residences will continue to fetch spectacular prices.