High-End Condos for the Merely Affluent by Kim Velsey
The mood on Billionaire's Row along 57th Street has turned grim of late, with condominium sales along the strip slowing to a near halt. Developers of superluxe skyscrapers are chopping up penthouses and, in some cases, scrapping plans altogether.
It's an entirely different story at 70 Charlton, a condominium by the Extell Development Company in Hudson Square, where more than half the apartments were priced under $3 million. Sales have been anything but sluggish there, with one-bedrooms, which started at $995,000, and two-bedrooms moving particularly fast.
It's a trend that developers and brokers say has been mirrored around the city: While the demand for $100 million mansions in the sky has all but vanished, sales at the other end of the new development market have been brisk.
"People will line up around the corner for an apartment for under $1 million," said Elaine Diratz, senior vice president at Extell Marketing Group.
As of June, condos priced $500,000 to $999,000 took, on average, 4.7 months to sell - substantially below the marketwide average of 8.6 months over the last 10 years. They sold more than five times as fast as condos over $10 million, which were moving at an average of 25.7 months, according to an analysis done by the appraisal firm Miller Samuel.
High-end buyers have not necessarily been exhausted, but you won't find many willing to pay prices from two years ago, said Jonathan J. Miller, the president of Miller Samuel. "Values dropped, but prices didn't," he said. "We're moving out of a market that's solely focused on superluxury, and for the developers who can get the formula right, demand for entry- and middle-income new development - the heralded $1 million to $3 million - can't be satiated."
Value, a word rarely heard several years back when almost every developer in the city was looking to cash in on the trophy craze, is the catchword of the day. And though "affordable luxury," the industry's preferred term for such projects, is hardly an apt description for apartments that remain beyond reach for most New Yorkers, developers are finding a deep pool of affluent buyers who have spent the last several years shut out of a market that catered to the global elite.
While new developments, as a rule, try to fill their units with luxury finishes, those priced at the lower end often find an edge by offering smaller apartments in areas where new developments are otherwise scarce.
Apartments at 70 Charlton have high-end finishes in line with Extell's most elevated product, Ms. Diratz said, and amenities like a saltwater swimming pool and a birch tree arbor, but the location in a neighborhood only recently rezoned for residential allows for far lower prices. And whereas most two-bedrooms at One57 clock in at more than 2,000 square feet, those at 70 Charlton are significantly smaller, at 1,071 to 1,622 square feet - "not tiny" but "efficient."
"These aspirational buyers don't want to compromise on high design and amenities," said Fredrik Eklund, an associate broker with Douglas Elliman Real Estate who, along with John Gomes, is overseeing sales at Steiner East Village, an 82-unit condominium at East 12th Street and Avenue A with amenities like a library and an indoor swimming pool. Apartments here are also "efficient," Mr. Eklund said, and have ceilings over 10½ feet, Paris Forino-designed interiors and five-piece master baths with two sinks, a shower and a separate tub.
And while prices in the building, which average $2,100 a square foot, are hardly a bargain in the East Village, which has very little new development, they can seem inviting compared with other downtown neighborhoods. Mr. Eklund said the building has drawn a number of buyers from the West Village and TriBeCa, some of the most expensive areas in the city, where inventory under $5 million is hard to come by.
"I think we're setting a new high market for condos in the East Village, but compared to the rest of downtown, people understand that they're getting a value for Manhattan," said Douglas C. Steiner, the chairman of Steiner NYC, which is developing the building.