‘Trump economics’, the President’s focus on Wall Street growth, stimulating the US economy and tax cuts, appears to be assisting a marked upturn in the ultra-prime luxury housing market in Manhattan’s best addresses, says new research from super-prime broker Leslie J Garfield & Co.
Using analysis by Dataloft, the market intelligence group, Leslie J Garfield & Co has reviewed key trends in Manhattan townhouse sales, enquiries and refurbishment projects over the last year and found a significant upturn in demand, values and pipeline projects.
The company highlights that the health of the luxury townhouse market, especially the largest mansion-like properties across Manhattan, provides a unique insight into the wealth and confidence of America’s most affluent families – including inherited wealth, new money CEOs and A-list celebrities – as well as the sentiment of overseas ultra-high-net-worth families buying property in New York City.
Leslie J Garfield & Co has found that over the last 12 months the Manhattan luxury residential market for properties priced over USD5 million US dollars (GBP3.6 million) has seen an upturn in enquiries, sales, values and ongoing/pipeline luxury refurbishment projects. Enquiries are up 10 per cent, average sales prices for luxury townhouses across Manhattan have risen by 6 per cent to USD7.2 million (GBP5.18m), up from USD6.8 million (GBP4.9m) at the start of 2017 and average price per square foot has risen 2 per cent to USD1,338 per sq ft (GBP964), up from USD1,316 per sq ft (GBP948).
Crucially however, Leslie J Garfield & Co observes that it is the market for super-luxury Manhattan properties priced from USD20 million (GBP14.4m) to USD40 million (GBP28.8m) that is generating the most impressive figures. The typical Manhattan property in this top sector of the market is a 9,509 sq ft six bedroom townhouse which now commands values of USD3,618 per sq ft (GBP2,605), which is higher than equivalent values being achieved in London’s Kensington and Chelsea USD3,291(GBP2,370) and almost hitting Knightsbridge townhouse average values (GBP2,951).
Leslie J Garfield & Co says that for Manhattan ultra-prime residences priced over USD20 million, 63 per cent of enquiries are from domestic buyers and 27 per cent from international buyers, with the top-four countries being investors from China, Britain, France and Germany. The proportion of overseas buyers at the top of the luxury resi-market is double the figures for overall Manhattan marketplace, where, especially at lower price points, just 15 per cent are overseas purchasers and 85 per cent are domestic.
Not surprising it is Manhattan’s most exclusive and affluent addresses that have most benefited from the upturn in the luxury residential market. Rises in values and transactions have occurred in the Upper East Side, the Upper West Side, Midtown East and Brooklyn Heights.
The Upper East Side, overlooking Central Park, has always been the “Knightsbridge of New York City” and here the average sales price for townhouses and mansions has surged by 21 per cent over the last 12 months to USD13.6 million, which is higher than the equivalent average for townhouses in London’s Knightsbridge and Belgravia (USD12.5m / GBP9m). Sales volume is up 27 per cent since the start of 2017, with an average of six townhouses/mansions now selling each month, compared to just a trickle during the recession hit Obama years.
The Upper East Side has seen 20 sales over USD15m (GBP10.8m) since the start of 2017, up from 14 in 2016. These big market driving deals on the Upper East Side include residential properties sold at 715 Madison Avenue for USD61.5 million at an impressive USD6,630 per sq ft (GBP44m / GBP4,745 per sq ft); at 19-21 east 64th Street for USD79.5m (GBP57m) in April 2017 with the same property selling for USD90m (GBP65m) two weeks ago; and 12 East 69th Street, which is in contract for USD80 million (GBP57m). There are a number of other USD15 million plus deals said to be in the pipeline, a further positive sign for the Upper East Side for the first quarter of 2018.
Across Central Park on the Upper West Side there has been a similar upturn in luxury resi-deals. Here the average sales price of luxury houses has risen by 7 per cent over the last 12 months to USD7.6 million (GBP5.5m), higher than equivalent house average sales values in London’s Fulham/Chiswick (GBP5.2m), sales volume is up 16 per cent and there are now an average of four luxury house sales per month. Significant deals on the Upper West Side have included 3 Riverside Drive which sold for USD15.8 million.
Just to the south-east of Central Park in Midtown East the average sales price has jumped by 38 per cent since the start of 2017 and now stands at USD8.9 million (GBP6.4m), in line with equivalent house values in London’s Marylebone (GBP7.3m). Sales volume is up 52 per cent since the start of 2017.
Deals in Midtown East include a renovated townhouse at 319 East 51st Street which sold for USD9.95 million and most significantly a super-prime residence at 1 West 57th Street which has just closed for USD100.5 million (GBP72m); making it the most expensive residential sale ever in New York City. In an interesting repeat of history, this exact location was once the site of the Victorian-era Cornelius Vanderbilt II mansion, which in its day was considered one of most expensive and lavish residences in Manhattan.
There are now over half a dozen luxury townhouses on the market in Midtown East asking USD10 million or more, so there could be some further large transactions in the district during 2018.
The final address that has benefited from the luxury upturn is Brooklyn Heights, the waterfront district to the south of Manhattan island. Here the average sales price has risen by 13 per cent since January 2017 to USD6.8 million (GBP4.9m) and sales volumes are up 52 per cent.
Jed Garfield, President at Leslie J Garfield & Co, says: “Like the Reagan era the Trump administration has decided to supercharge the American economy with a focus on tax cuts for the wealthy and large corporations, boosting Wall Street, job growth and USD1 trillion of public borrowing for infrastructure and defence spending. During the Reagan era the luxury residential market in Manhattan boomed, something Trump in business himself benefitted directly from. He now seems to be aiming at replicating this under his own administration, and certainly the New York City real estate data from the last 12 months indicates that its starting to have an effect. How this will all play out remains to be seen, but certainly Manhattan’s most exclusive addresses are seeing an upturn in enquiries, sales and values, and our own business has benefitted significantly.”
Rick Pretsfelder, Partner & Managing Director at Leslie J Garfield & Co, says: “Trump is committed to talking up America, he has decreased taxes for pass-through-entities, his tax reforms are lowering bills for firms and wealthy Americans and he is engaged in the largest expansion in government spending since 1945. All of this is aimed at producing a more robust economy, a booming stock market and upturn in real estate demand and values. In our view it’s a big economic gamble and Trump remains a very polarising figure in America. However what is not in dispute is the fact that Manhattan’s most exclusive addresses, led by the Upper East Side, are seeing an upturn in sales volumes, values and enquiries.”
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