Author Mark Twain once famously said, “Reports of my death are greatly exaggerated.” The same could be said of Manhattan’s luxury real estate market, which last week saw 24 contracts signed at $4 million and up, according to a recent weekly luxury market report. This despite ongoing gloom which has hovered over NYC’s top-tier market for most of the year. Yet the numbers defy the malaise.
A co-op at 640 Park Avenue blasted all of the other deals out of the water with an asking price of $21 million, down from $25 million. The 14-room property with three fireplaces overlooks Park Avenue. The second most expensive contract was a lofty $15.5 million for a four-bedroom duplex at 565 Broome SoHo, a new development designed by Renzo Piano. One of the building’s luxury condos has gone into contract four out of the last five weeks. Amenities for the most recent sale include a 2,200 square foot outdoor terrace with a saltwater pool and outdoor shower.
The first week of June’s sales follows an explosive May which saw a penthouse at the Getty, a new boutique condo next to Chelsea’s High Line, set a Manhattan downtown record when it closed at $59.06 million. Last month also saw an apartment on the 85th floor of One57 in Midtown, sell for $53.97 million.
So why, after a few admittedly bad winter months, has the luxury market continued to grind out sales? The most obvious reason is the weather. Even town car-riding multi-millionaires prefer to stay home when the wind chill bites, and last winter was a particularly bad one with one Nor’easter after another blasting Manhattan. Another factor must be the economy, which is enjoying growth. Jobs, the stock market, and even oil seem to be doing well. Along with these factors is the trend of sellers becoming more realistic regarding pricing. The first quarter of 2018 was particularly bad with listing numbers down 8 percent on the previous year. Once prices dropped, the sun came out, and the economy started to smile, houses went under contract.
The enduring appeal of Manhattan, which has always proven to be a rock solid, long term investment, was summed up in a report earlier this year, which placed The Big Apple top of all US cities where the wealthy invest their cash.
“Typically, these areas are destinations in their own right, offering high-net-worth individuals a range of lifestyle opportunities, cultural experiences, and educational opportunities," the report said referring to these cities as “power markets”. Its definition of the term is a place where the top 5 percent of single family home sales by price are highest. In the top 17 markets, the median list price for the top 5 percent of the sales is at least $3.5 million.
Additional unease about the Federal Tax law may have also been a contributing factor in the winter for buyers staying on the sidelines.
It “makes the market feel weaker than it actually is,” Johnathan Miller of Miller Samuel Real Estate Appraisers and Consultants said in April, foreshadowing a reckoning and eventual rebounding, once buyers and sellers “get reacquainted [with] what the right values are.”
And those values will, inevitably, always go up.