A quarter of NYC's post-2013 luxury condos are unsold

Originally published at: https://boingboing.net/2019/09/14/towering-inferos-r-us.html

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Shhhh, be quiet! Listen carefully…do you hear that? It’s the sound of the world’s smallest violin playing for greedy real estate developers.


There are only so many billionaires, corrupt foreign politicians, and shady oligarchs in the world who can afford ultraluxury real estate, and luxury real estate in global alpha cities is priced out of reach of even the upper middle classes.

mooting the idea of bulk sales to vulture funds at massive discounts.

Which will only ensure that housing remains unaffordable, because the private equity greedpigs will either hoard the units, leaving them empty in anticipation of a future market upswing, or rent them out at astronomical rates.


Gotta love this simulation we’re in. Could be nearing the end of game #1.



I’m slightly skeptical about the specific numbers, since they don’t seem to add up between the NYT article and the blog post, and Streeteasy.com is not a renowned research institution anyway.

But if it is even close to the truth that 25% of new condos are unsold, and 38% of the rest are being rented out, that would mean that at least half of these properties are waiting to sell. It doesn’t matter how patient of an investor you are, there is no reasonable scenario where you’ll ever make money on one of these – it’s like holding on to a warehouse full of Milli Vanilli merchandise in the hope the market will pick up.

So the question isn’t whether the real estate market will collapse at the ultra-high end – it already has – the question is how this will affect the human property market. It seems like the property industry is willing to absorb a lot of losses here in order to conceal the problem, and that suggests they’re afraid that the infection could spread from this small sector into the market as a whole; if it gets out that supposedly $20million properties can’t sell for $5million, that’s going to make it hard to sell “normal” homes at $2million, and then you’re talking about losses of trillions rather than billions.

But schadenfreude aside, I’m not sure if there’s any silver lining to this. There could be a shock effect, with millions of regular people’s savings wiped out, but ultimately, even if you get family doctors and school principals moving into apartments that once cost $20million, you’ve only added a few thousand more normal-people homes to the supply, and the demand is the same as before. So a collapse in the market won’t, by itself, solve the problem that people can’t afford anywhere to live.



Ugh. Just… ugh.


OMG, that’s so sad I’m wringing my hands in anticipation.


Billionaires losing money? I’m sure help is already on the way.




There is no problem- you just need to clap harder for tinkerbell.

Housing has gotten beyond reasonable prices and the invisible hand is administering a spanking. If you’re a pure free market capitalist you should be cheering right now.


Working as designed, right? Of course if you’re a reasonable person… :wink:


Yep - if you’re a wealthy investor losing money- you should be singing the praises of the system as it works perfectly. You lost because of your flaws - both moral and intellectual. No way you’re going to seek any government intervention.


I mean, that would be wrong, right?!? The free market is the most moral of systems, right? Government intervention of ANY kind is immoral, right? Isn’t that what Saint Ayn said?


There are a lot of homeless people in U.S. cities.

There are a lot of unoccupied housing units in U.S. cities

“How can we ever solve this homelessness crisis? It seems impossible; I guess the only solution is to ban homeless people from U.S. cities!”

Just some food for thought.


I am somewhat upset - every empty luxury condo represents wasted floorspace that could have been used for up to half-a-dozen regular apartments, after all. (At which point only a tenth of them would be unoccupied, on average…)

Yeah. I keep reading about - and seeing, every time I leave the house - the homeless crisis here in California, where we have most of the country’s homeless. The usual, knee-jerk response is to frame it as a housing shortage: “obviously we need to build more housing!” (After decades of often runaway development and destruction of green spaces.) The problem with that is: L.A., which has a particularly bad problem, has 50-60 thousand homeless people, but they have literally twice that number of unoccupied apartments. The SF Bay Area, which has a similar homeless problem, has perhaps 100,000 empty homes. It’s wholly a market problem, not an actual shortage of buildings in which to live, clearly.


As always it ain’t the lack of resources, that’s the issue; it’s the selfish greed which motivates almost all decisions.


Huh. It’s almost as though building luxury housing for the money laundering market isn’t a sustainable business model. Who could have predicted that?


Also in the NYT recently & appropriately: Dumbo Project to Include 700 Luxury Apartments