Recently there has been a
growing number of luxury apartments on the market in New York City. A record
number of 300 luxury apartments selling for upwards of $5,000 per square foot
are currently on the market or will be in the next 24 months. At the same time,
there are only so many highly wealthy individuals that show any interest in
buying these properties. This is creating a downward trend in apartment sales
within that price range.
The year 2014 was a peak year for developers of
high end real estate, as about 55 units of these apartments were sold. The same
cannot be said for the year 2015, as there was a drop in the number of luxury apartments
sold. Sales data showed that about 47 luxury real estate transactions were
successfully completed in that year. This was a bit of a let-down from the
previous year.
Now it seems as though fresh trouble is brewing,
and the worst case scenario may be just beginning for developers. This is due
to the slow economic growth of the home countries of top foreign buyers. Such
countries include China, Russia and other emerging countries. With the trouble in
their home economies, these top buyers may become less inclined to spend as
much on real estate then they once used to.
Still, some suggest that the glut of New York luxury
real estate may not be due to world economies at all. What could be the cause
of the glut may simply be the fact that some buyers have left the market due to
a sense that the time for buying these luxury properties has passed.
Either way, these new happenings have left
developers of high end real estate groping for a lifeline. Some New York City developers
have recently started to reduce prices, while others are dividing their
choicest properties into smaller units and selling them off at cheaper rates. Even
so, the properties of a few developers on the Upper East Side who defaulted on
their loans will now be sold off at auction.
Other developers with plans to turn their
properties into high end condos are now shelving these plans completely as they
can see the evident glut. Still, there is no indication that the prices of
these luxury properties will go up anytime soon. The slowdown in the purchasing
of luxury real estate may last for quite some time.
Please visit us at: www.RubenPerezNYC.com
No comments:
Post a Comment