clock menu more-arrow no yes mobile

Filed under:

There Aren't Enough Rich People to Fill NYC's Luxury Condos

New, 64 comments

There are a lot of really, really expensive apartments poised to enter the market in the next few years (we're lookin' at you, 220 Central Park South and Nordstrom Tower Central Park Tower) that will join the ranks of the city's already-inundated luxury market. A few questions have been floating around for a while: when's enough, enough? Are there too many uber-luxury listings? The Real Deal attempted to answer these question with some admittedly tenuous, but interesting number-crunching ("fuzzy math," in their own words) and their conclusion is not surprising in the least: "[T]here appears to be too much supply in the uber-luxury segment compared to lower price ranges." Given the findings of an earlier report that found that there are only 14 Ultra-High Net Worth Individuals—people who are worth more than $30 million—per 100,000 people in New York City, this doesn't seem to be news.
Here's how the Real Deal's calculations break down: there are at least 99 apartments on the market in New York City priced at $30 million or more. TRD suspects that only people with a personal wealth of $500,000,000 or more would invest that much in a single "asset," which breaks down to 8,410 people world wide. If developers wanted to sell all of the $30 million-plus apartments they're building, 1.18-percent of the entire world's "demi-billionaires" would have to own one of these New York City apartments. Already, 367 "demi-billionaires" own a $30 million-plus apartment in New York City.

TRD also applies the same "fuzzy math" to apartments that cost $10 million or more. The site suspects that individuals with a net worth of $100 million or more would purchase a home asking $10 million or more, with 3,600 individuals with those qualifications already owning a residence worth $10 million or more in the city. There are currently 455 listings in the city asking $10 million or more, with 57,300 individuals with a net worth of $100 million or more in the world. This means that .8 percent of the world's population with personal assets of $100 million or more would have to own a $10 million apartment for them to all be full.

TRD notes the caveats to their, uh, study: just because someone has the wealth doesn't necessarily mean they want to invest in New York City real estate. Also, people don't always play smart, and may invest more in a residence than they ought to considering their money stash. "I don't think I have ever in my career seen such a disconnect between what is desperately needed built and what is being built," Curbed contributor and numbers guy Jonathan Miller told TRD. Looks like developer Ziel Feldman is on the smart side for choosing to build less expensive (but still really pricey) luxury condos on one of the city's most expensive sites.
· How much demand actually exists for uber-luxury condos? [TRD]
· New York City Is No Longer No. 1 For the Super-Wealthy [Curbed]
· Imagining the Megatower-Filled Manhattan Skyline of 2030 [Curbed]
· Lifestyles of the Rich and Richer archives [Curbed]