New York City is home to some of the most famous buildings and landmarks in the United States. Billionaires Row, in particular, has caught everyone’s attention as the city’s symbol of riches and ultra-luxury apartments. Towards the end of 2020, these lavish apartments witnessed a high demand as residents moved to the metropolitan areas from the suburbs, post-coronavirus lockdown.
This year, New Yorkers, especially millennials, moved to these apartments as rentals in Manhattan plummeted by 15.5% and 8.6% in Queens and Brooklyn respectively in early January. Even the building that once had the title of “Brooklyn’s Tallest Building,” The Brooklyner, wasn’t safe from this impact.
Thanks to the pandemic, the once unaffordable luxury apartments, such as the Billionaires Row, are now within the range of New Yorkers striving to upgrade their lifestyle. While the discounts and concessions won’t last forever, rents are expected to decline all through 2021.
Biggest Plunge Since the Great Recession
The rent in Manhattan has seen the most significant decline since the Great Recession, and the median asking rent in this area was reported to be $2,750 earlier this year, the lowest number in approximately more than a decade. The average rent for one-bedroom apartments in doorman buildings also went from $4,513 to $3,718 in one year.
Millennials who were priced out of these luxury apartments are not only moving into these formerly unaffordable buildings but are also upgrading neighborhoods and unit sizes. In addition to the price drops, many renters are also providing amenities, including 2 to 3 months of free residence. Yes, you read that right. Don’t want to pay rent for three months? Just move into a lavish building.
While we’re seeing a price drop in almost all aspects of luxury living in New York City, prices of 3-bedroom apartments haven’t changed exponentially.
A Wave of New Leases in June
By June 2021, new leases saw a 204.14% increase, and they doubled compared to leases from June 2020. The luxury apartments market in Manhattan is getting more robust this year, and Brooklyn isn’t far behind. The high-end apartments in Brooklyn saw a total of 125% increase since last year. The rent prices saw a decline everywhere except for the famous neighborhood in Brooklyn, Dumbo, which saw a 5% increase.
The vacated apartments left behind as excess inventory during the pandemic may have been the cause of a decline in prices. So, it goes without saying that renters are benefiting from this change as much as apartment-seekers.
What’s Happening at Billionaires Row?
As of early August 2021, almost half of the units in the seven buildings of Billionaires Row were empty. The apartments that have previously been sold for nearly $100 million in previous years are also sitting as excess inventory now. The vacant units make up 44% [341 out of 722 condos] of the seven buildings. The $17 billion Billionaires Row will soon follow suit like other luxury apartments and lower its prices if the excess inventory grows further.
While New York might be famous for its fancy lifestyle, the change in activity proves the city is moving towards an affordable market. The resale value of these units in Billionaires Row is declining. However, suffice to say, the billionaires market in New York is still holding on.
During the first quarter of 2021, the $10-million plus market saw a substantial increase, even though the 2021 sales suggested otherwise.
While by the end of 2020, most predicted the prices of luxury apartments in New York to rise, we are seeing a decrease in rents and increased concessions and amenities. If you were waiting for an opportunity to invest in high-end real estate in the city, now is the time to take full advantage of the situation.
The change in the New York luxury real estate may have seemed temporary initially, but many are predicting it to last for a longer time. All is not lost for Billionaires Row either; a home spanning approximately 13,000 square feet was sold earlier this year for $9.6 billion, and another duplex is currently on the market for $150 million. What’s next? Stay updated for more news on New York’s real estate market.