By Michael Comandini
$238 million, the price paid for the most expensive home in U.S. history. The news raced across headlines in late January, as the sale of the NYC penthouse, located in the highly-coveted new development project, 220 Central Park South, crushed the previous record by over $100 million. The 24,000 square feet quadplex was purchased by billionaire hedge funder, Ken Griffin, who is no stranger to ultra-luxury real estate. The headline was a welcomed change from the dreary headlines of 2018. Following this news, another significant headline surfaced, stating that 26 new contracts, valued at about $245 million, were signed in the Manhattan luxury market. This marked the first week in 2019 to break 20 contracts and sparked the question: Is luxury real estate coming back?
In New York City, the luxury market is defined as homes priced at or above $4 million. Since that February headline, the Manhattan luxury sector has been on a bull run, with three of the last four weeks resulting in 20 or more signed contracts. Brooklyn has also seen a spike in luxury activity during these weeks. This increase of activity comes on the heels of what wasthe worst year in in NYC’s residential market since 2008. It appears that buyers are regaining confidence in the market.
When the new tax code went into effect last year, it triggered a landslide of uncertainty amongst many buyers. Unsure of how this code would affect the amount they would have to pay in taxes and how that ultimately affects their bottom lines, many buyers put their real estate aspirations on hold. Fast forward one year, most people have done their 2018 taxes and perhaps have realized that things weren’t as bad as they had anticipated. Many of the buyers that I work with who had put their searches on hold in 2018 have re-entered the market. They are taking their searches more seriously and are enthusiastic about finding their next home.
‘While this increase of recorded activity is only a small blip on the market’s timeline, one thing seems clear: Buyers have regained confidence. Combined with a correction in pricing and more realistic sellers, deals are getting done. Perhaps we are beginning to see the light at the end of the tunnel.
Licensed associate real estate broker
Keller Williams NYC Tribeca