Apartment flippers made seven-figure profits for some of the priciest condo resales last year, but overall resales are not bringing in as much money as they used to, Crain's reports. One of the highest condo resales last year took place at the Walker Tower in Chelsea. The buyer there purchased an apartment for $6.975 million in December and then sold it for $10.75 million in January of last year. While that's a mammoth 54 percent return, average returns on such flips fell to 15 percent, down from 30 percent the previous year.
For the most part, buyers who make such gains at these high end condos usually tend to purchase before the units hit the market. The Attorney General's office does not give their OK to new condos or conversion projects until at least 15 percent of the building has gone into contract. This in turn lets developers offer some units at a discount.
Keen flippers, who usually tend to be in the finance industry, according to Crain's, then seize this opportunity to make bank. However due to a massive increase in luxury developments in recent years, the supply is likely to far surpass the demand, and as a result the returns will cool off for the immediate future.
Successful flips also have a lot to do with the name brand of development and the location, some of the other top flips from last year took place in buildings like One57, One Madison, and 161 Hudson Street, each high profile projects in their own right, but also located in Midtown, Flatiron District, and Tribeca respectively some of the priciest neighborhoods in the city.