No, no one's tripping. There has been a ginormous increase in apartments throughout New York City asking upwards of the mid eight-digits. According to the Wall Street Journal, $40 million is the new gold standard for luxury dwellings in New York City and elsewhere following 2008s financial meltdown. A quick StreetEasy search reinforces this: there are 76 listings in the city priced at or over $35 million, and 10 in-contract listings at the same price point. Let's all take a moment to reflect on that.
Okay, moving on. These dwellings aren't confined to the "massive erections" of wealth on 57th Street, but the listings in towers like One57, 432 Park Avenue, and the newly-launched 520 Park Avenue certainly do have an effect on the ask of other properties throughout the city. The Daily News says that the "headline-grabbing towers" are skewing the asks of new condo developments way, way up: the average price of a new condo has jumped 50-percent in the last two years alone. That means the average ask of a new condo in Manhattan is expected to be $5.9 million this year, with not new condos going for an average of $2.7 million.
Why super expensive condos are multiplying isn't rocket science at this point, but Curbed contributor Jonathan Miller explained to the Journal that factors like the proliferation of global wealth, increased demand from foreign and domestic buyers looking to park their wealth and developers' response to build more pricey properties for them to do so, as well as the ol' copycat effect when big-money listings prompt people to put their properties on the market for similarly inflated asks all contribute to the boom in properties asking $40 million or more.
Over the next five years, 6sqft reports that new development sales will total $27.6 to $33.6 billion, with a whole third of that sum concentrated in just five projects: the humongous Greenwich Lane, 432 Park Avenue, 550 Madison Avenue, 10 Madison Square West, and 220 Central Park South. But the effect of that is seen in other properties, too. The former Brooklyn Heights mayor's mansion that recently set a borough record with its $40 million ask? In 1991, it was purchased for a mere $2.3 million.
· The New Price of Luxury: $40 Million [WSJ]
· 'Billionaires' Row' prices skew NYC new development market up [NYDN]
· Five Luxury Towers Will Account for One-Third of New Development Sales over the Next Five Years [6sqft]
· Manhattan High Rise Boom Reduced to 'Massive Erections' [Curbed]
· Proving New York's $100M Blockbuster Sale is an Outlier [Curbed]