For most of us, our experiences with luxury apartments located in Manhattan are restricted to what we see in the movies and on TV. Sprawling views from hundreds of feet up, marble floors, and a corner location don’t come cheap. In fact, some apartments like this are priced at $5,000 a square foot. It may seem crazy, but things are worth what someone will pay for them. As it turns out, however, New York’s luxury real estate may be reaching a point where fewer and fewer people are willing to pay the exorbitant prices.
According to The New York Times, the number of sales for multi-million dollar, $5,000 per square foot apartments dropped from 55 in 2014 to 47 in 2015. Considering China’s slowing economy and the prices of oil and commodities dropping, the 2016 sales numbers could be even lower. Prices may have finally gotten too high.
Many developments are still being created to cater to the superrich, however. 432 Park is a tower filled with these $5,000 per square foot apartments that cost $1.3 billion to design, build, and market. But the projected sellout for the building is $3.1 billion.
The problem is, apartments in this price range constitute less than one percent of condo sales in New York, and with that number continuing to shrink, developers are growing a bit wary of throwing down the money necessary to create these developments.
While New York isn’t in peril of running out of billionaire buyers or becoming too expensive for tourists to get a decent hotel room, there are signs that prices have reached their pinnacle, and even the superrich might not be willing to pay much more for an apartment or condo.