Presence of foreign buyers indicates a healthy luxury market in NYC1 Apr 2013 6:16 PM
New York City has long been home to some of the most desirable and valuable properties in the world, so it is no surprise that when one-of-a-kind homes in the city hit the market - often with jaw-dropping price tags - it makes news around the world. This has been especially true recently, as the effects of the recession have not fully subsided and many people have been watching closely for unambiguous signs of improvement.
That's why when two properties recently hit the market - each likely in excess of $100 million - many people in the industry saw it as a clear sign that the market for Manhattan townhouses and other Big Apple luxury real estate is back in full swing.
According to Business Insider, the listing of these two properties - one owned by SAC Capital executive Steve A. Cohen and the other by the late investor Martin Zweig - demonstrates that investors and other potential high-end home buyers have had their confidence in the market restored and are less afraid about buying homes with an eye toward the future.
This point was hammered home recently when a foreign buyer purchased a $6.5 million condo for her daughter. While this in and of itself is not necessarily out of the ordinary, the farsighted nature of the purchase struck many - including the agent involved in the transaction - as noteworthy. According to the Daily News, the woman bought the condo so that her daughter would have a luxurious and convenient place to live when she attended college in or near New York City, which is unlikely to be anytime soon - the woman's daughter is 2 years old.
"We're running around the city looking at things, and I finally said, 'Why exactly are you buying?'" said Sotheby's International Real Estate broker Kevin Brown, according to the source. "She said it had to do with her daughter, who was planning on going to Columbia or NYU, maybe Harvard, so she needed to be in the center of the city, and that is why she was picking this one particular apartment [in the coveted One57 building in Midtown]."
When he learned that the buyer's daughter was 2, Brown was shocked. Yet perhaps he shouldn't have been, as New York City real estate is typically considered a sound investment. Many people buy homes in the city with the expectation that the value will only increase. Because of this, they often feel comfortable buying homes that they don't intend to occupy for several years.
According to The New York Times, about 30 percent of apartments in the Upper East Side are vacant for more than 10 months, as foreign buyers sit on them and treat them as long-term investments.