You know all about all the luxury high-rises being built in New York City, right?
Well, not surprisingly, these buildings, which stretch tall in the sky and offer stunning views of the city (along with high-class amenities like doormen and in-building fitness centers), were initially offered for astronomical prices.
We're just learned, though, that the prices for NYC luxury real estate are dropping, and fast.
According to The New York Times, in the world of NYC luxury housing, bidding wars are occurring with less frequency, lines at the door of open houses have shrunk, and prices are on the downswing.
"I have seen more broker incentives and price reductions in the last few months than I've seen in the last three years combined," said Leonard Steinberg, President of the real estate brokerage firm Compass.
What's the deal with the decline in prices?
"The market got carried away with itself in the first half of 2015. Some people went in with crazy pricing expectations," Steinberg said.
[anad]
So just how extreme are these price cuts we're talking about? The truth is, things are relatively extreme. In the last four months of 2015, more than 1,000 available listing in Manhattan slashed their asking prices. That's 20% of the available listings that decreased their asking price.
Even crazier is the fact that that's double the number of asking prices that decreased during the same time period in 2014.
The price reductions are almost unfathomable to us. One five-bedroom at 110 Central Park's asking price dropped by $7 million, which reduced the price of the apartment to $17.995 million.
Another apartment, a three-bedroom penthouse at 15 West 20th Street, was reduced by $1 million, rendering the price to $7 million.
The most mind-blowing statistic we saw was a Park Avenue townhouse whose price had been reduced by $18.5 million to an asking price of $29.5 million. Pennies, right?
andrealucasluxury The bedroom of the 12,000SF penthouse at 160 Leroy designed by Herzog de Meuron & developed by Ian Schraeger. Asking $80M The last new building to be built on the water in the West Village. Contact me for more info. #herzogdemeuron #ianshraeger #luxuryrealestate #nycluxuryrealestate #luxury #luxuryhomes #luxuryproperties #luxuryfinishes #luxurylifestyle #milliondollarlisting #simplythebest
Many of these listings came out in real estate publications in all capital letters, as though they were real bargains. However, they weren't. They were just making astronomical prices slightly more reasonable.
"There is never a market for overpriced listings. If you haven't had offers or are not getting the proper amount of showings, the market is telling you there is not interest, and you have to reduce the price," said Hall F. Wilkie, president of Brown Harris Stevens.
Why were apartments priced so ridiculously during 2015? Well, as you may have guessed, the record-setting deals at the top of the market for buildings like 432 Park or One57 had sellers super ambitious.
"The thinking is, if I can see that building from my window, surely mine should cost the same or close," Steinberg said. "Unfortunately, that's not how it works."
So will the prices continue declining until us peasants will be able to live in a penthouse on Park Avenue? We're thinking not, but we are optimistic about the situation.
Check out Apartment Finders Con Elderly Woman Out of $10K in Brooklyn.
[via The New York Times] [Feature Image Courtesy Instagram]