You may have noticed a stark increase in advertising for “ultra luxury condos” in your area lately. These swanky apartment rentals or real estate options are becoming increasingly popular — especially in larger cities. At first, you’d only find them in more “glamorous” cities like New York, Los Angeles, or Miami. However, now they are popping up in small- and medium-sized cities too.
Whether you’re a young professional or a senior citizen looking to downsize from an entire house to something with more comfort, the ultra luxury market might be perfect for you. This article will inform you on what to expect from an ultra luxury condo, how to find one, and how much you can expect to pay.
The Rise of Ultra Luxury Residences
The rise of the ultra-luxury market can be traced back to the 2008 housing crash. The resulting recession saw real estate values plummet across the country. Many real estate investors, both domestic and overseas, poured money into the buying up property at reduced prices. In some cites, like Miami, prices of beachside condos fell 50%.
A lot of these purchases were entirely in cash, since the crash made it much more difficult for the average buyer to get mortgage financing. The condo market sought to capitalize, renovating (or building) units directly catered to the wealthy buyers who could pay cash. These residences included luxury upgrades like amazing views, larger bedrooms, extra bathrooms, premium grade materials, and wrap-around balconies.
The Fall of Ultra Luxury Apartments
The good times couldn’t last forever. Although the ultra luxury condo market exploded after the 2008 crash, it didn’t last very long. By 2015, the ultra luxury apartment market was on a downward trend. Prices were falling and plenty of units were struggling to sell. Some were even left empty. In Manhattan alone, one of the biggest ultra luxury markets in the country, more than 7,000 units sat on the market last year, unsold.
The problem basically boiled down to supply and demand. With so many developers trying to capitalize on selling or renting ultra luxury residences, they ran out of buyers. Only a small percentage of the condo-buying market is willing to pay millions of dollars (in cash) for a place to live. That means prices keep dropping.
Estimated Costs of Ultra Luxury Condos
At the height of the ultra luxury boom, units could sell for anywhere between $2,500 and $9,000 per square foot. And these your tiny 900 square-feet one-bedroom units. Most of these luxury residences are at least 5,000 square feet, and can reach up to 30,000 square feet. Some quick math shows that most of these units were well over a million dollars, with many actually reaching seven figures.
The good news is that the boom is over. Prices of these ultra luxury condos are dropping down across the country. In Toronto, a luxury unit that sold a few years ago for more than $1,200 (CAN) per square foot was recently re-sold for just $728 per square foot. That’s a drop of almost 40%!
The exact price decrease will depend on the supply/demand dynamics in the city you want to buy in. Regardless, it’s safe to say that the ultra luxury market has cooled significantly in recent years. That’s good news for potential buyers.
How To Find Ultra Luxury Residences
You don’t typically find listings for ultra-luxury condos on Facebook or Craigslist. In fact, many of these listings aren’t posted online at all. Since the seller is seeking a wealthy buyer, many of these units are listed privately. That means that local real estate agents will know they are for sale, but the general public probably won’t.
If you’re looking to move into an ultra luxury unit, you should find yourself an experienced real estate agent. They will know the details (or at least know which of their colleagues to reach out to for them). If you can afford an ultra luxury apartment, you can definitely afford to help of a qualified real estate agent to guide you through the process. You don’t want to attempt to close a multi-million deal all by yourself.
The Bottom Line
Buying (or even renting) an ultra luxury condo, apartment, or unit isn’t for everyone. These places are incredibly lavish, so they naturally come with an extraordinary price tag. However, the market has cooled off so much in the last few years that the timing to get into an ultra luxury living space has never been better.
If the rising interest rates don’t concern you, as it relates to real estate shopping, then you’re in luck. There is currently a large supply of ultra luxury residences around the country, with a real lack of active buyers. With the help of a knowledgeable real estate agent, you can arrange viewings of the available luxury condos in you preferred city. You might even be able to spend less than you thought!