New York’s priciest apartments in the city’s wealthiest neighborhoods are often vacant for large chunks of the year.
According to an investigation by New York Magazine, 30 percent of apartments between 49th Street to 70th Street between Fifth Avenue and Park Avenue, are not occupied for at least 10 months out of the year.
The reason? For starters, many of these apartments are owned by wealthy foreign investors. Indeed, international investors poured $50 billion into real estate in the U.S. in 2012. But many of these overseas investors are simply looking to hide their cash by putting it into New York City property. Actually living in these properties for any length of time is not necessarily part of the plan.
The influx of international many has also reduced inventory and driven values up on high-end apartments. That development has priced some potential buyers out of the market.
At the same time, the new towers that are home to many of New York City’s ritziest apartments cost developers a bundle to construct. Typically, they need to sell these top-end apartments at prices of around $5,000 per square foot. This is about 30 percent higher than the record price paid for a penthouse in 2004. At those rates, developers are finding it difficult to sell units to any but the super wealthy. [NYM] – Claire Moses