The wealthy have flocked back to the Manhattan luxury market, spending even more than they did in the pre-crisis highs, but are doing so more discreetly, a new report seen by the Wall Street Journal shows.
The report, by Stribling & Associates, found that Manhattan co-op and townhouse sales in the high-end $5 million-or-more market hit record levels in 2012, exceeding even the levels seen in 2008, which was the peak year for the borough.
“While there is no law of nature requiring that what comes down must go back up, the luxury residential $5 million plus market in Manhattan certainly has done just that,” Kirk Henckels, an executive at Stribling who prepared the report, told the Journal.
Condominium sales did not enjoy the same levels, but brokers said this was partially due to a rush of signings for still under-construction new luxury condo developments.
Henckels added that after the Lehman Brothers Holdings collapse in 2008, wealthy buyers were apprehensive of making big-ticket purchases and only swooped in at the sight of a real bargain. Now, however, though buyers want to maintain a low profile, they are willing to splash out money for the right homes, “even at full asking price,” he said.
Pamela Liebman, the president of Corcoran Group, told the Journal that wealthy foreign buyers were increasingly looking at New York not only as an investment, but also as a desirable city for a pied a terre.
“Many of them are not just looking at this as a place to dump their cash,” Liebman said. “They want a place they can use and enjoy when they come to New York.”
Indeed, some of the biggest sales in the luxury market have come from foreign buyers, including the record-shattering $88 million purchase of the penthouse at the Zeckendorf’s 15 Central Park West, as The Real Dealpreviously reported.
The pre-construction sales market is also very robust, and is targeting very wealthy buyers. Roughly $2.5 billion worth of deals in this market may be in contract,according to reports from developers, but it could be several months or years before they close.
Alexico Group, the developer of the 57-story white-glove condo tower at 56 Leonard, said the building is already half sold, with contracts worth over $450 million.
“I’ve never witnessed so much pent up demand,” Kelly Mack, president of Corcoran Sunshine Marketing Group, which is marketing the building, told the Journal. [WSJ]