Has the Luxury Apartment Boom Peaked?
During the furious stock market boom of the past several years, the only apartments you could find anywhere were exclusively glass-walled luxury penthouses, priced at $85 million. It seems, however, that we may be waking up from our cash-induced fancy apartment haze at last.
If you live in a desirable big city—San Francisco, or New York, or Toronto, or London—you’ve seen it happening for years: cranes and building sites popping up all over town. Majestic towers rising. And, dang it, they’re all priced for millionaires. The distinct lack of affordable (even for middle class people) new apartments has been a defining feature of our post-recession building boom. Apartments, apartments everywhere! And you can’t buy shit.
Now, though, as the global economy appears a bit more shaky, we may be reaching the point at which building exclusively for financiers and shady international gangster-businessmen becomes no longer a successful business strategy.
ITEM: In London, luxury apartment sales are down, and the forecast is for prices to decline this year. The city, says the FT, “is suffering the uneasy combination of growing supply and shrinking demand.”
ITEM: In New York, the city’s most expensive apartments are languishing on the market, and one developer has even had to tragically divide a $45 million penthouse into two cheaper hovels. Dickensian.
ITEM: Across America since 2010, the construction of new apartments has been growing at a faster rate than the construction of boring old single family homes. This year that trend is expected to reverse in a major way, as apartment construction stalls. The suburbs are back!
None of this should be interpreted as meaning that you can now afford an apartment.
