NYC luxury apartments are cheap… versus the world!
Published: Jul 25, 2013
A report compiled by international brokerage and consulting firm Knight Frank, which is based in London, indicates that New York City occupies only the 8th place in the ranking of the world’s priciest cities.
According to Knight Frank, in New York, $1 million buys approximately 474 square feet of luxury real estate. The tiny principality of Monaco, where $1 million buys only 172 square feet, was ranked number one, followed by Hong Kong (204 square feet) and London (247 square feet). Then come Geneva, Paris, Singapore, Moscow… all more expensive than the Big Apple.
The most expensive listing on the market in Manhattan is a triplex Penthouse at the Pierre Hotel asking $125 million. This is nothing compared to the purchase price of an apartment at One Hyde Park condominium in London in 2011 for the equivalent of $219 million or the asking price of approximately $390 million for a penthouse at the Tour Odeon condo in Monaco.
Stateside, Copper Beach Farm, a waterfront estate in Greenwich, CT, hit the market in May for $190 million; the Owlwood estate in Los Angeles, CA is on the market for $150 million; and in Dallas, TX, the Crespi Hicks estate was listed in January for $135 million.
Many experts agree that New York real estate today is still undervalued on the global stage.
The thing is that, even if there is a record low inventory available in the city, there are many luxury markets where the inventory is even more limited. Even the cost of construction is relatively more affordable in New York. So this is the scoop… if you are looking to buy an apartment in the price range $80 million to $100 million, NYC is a bargain. For real!
In Manhattan and Miami, we are seeing a lot of cash offers, probably more than the national average, for both markets – particularly Manhattan – appeal to the entire world. In Manhattan, an estimated 15-20 percent of real estate transactions are done in cash. So how can a buyer who needs a mortgage compete with a cash buyer?
The only way is if the mortgage buyer bids higher than the cash buyer. But a seller may still prefer to go with the cash offer even if it's lower than an offer with a mortgage contingency. Everyone rushes to the best priced listings, including a lot of cash buyers because that indicates that the seller is motivated.
A smart approach for the buyer who needs a mortgage would be to focus on properties that seem priced a bit high. Why? These listings receive less attention from the market and cash buyers. Sometimes an overpriced listing can mean that the seller is not very motivated or sometimes it could just be an honest pricing mistake on behalf of the owner and his/her broker. Then the mortgage buyer can have a shot at negotiating and getting his/her offer in with contingency and see the deal go through. In essence, a mortgage buyers needs time, and an overpriced listing can offer more time.
This is it for today, dear readers. I am available to answer your questions and provide you with more information on New York City, Miami and U.S. real estate.
• Riccardo Ravasini is a real estate maven and an active agent in New York and Miami. He grew up in Italy where he studied business and finance at Bocconi University in Milan before moving to the U.S. He enjoys assisting people in the search for the perfect rental apartment as well as international buyers looking for smart investment properties. Contact him at +1-917-214-2509 or firstname.lastname@example.org.
|Last Updated on Thursday, 25 July 2013 14:59|
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