The most expensive apartments in New York City’s wealthiest neighborhoods are often vacant for large chunks of the year.
According to a New York magazine article, citing Census Bureau data, 30 percent of Apartments Between 49th Street to 70th Street Between Fifth Avenue and Park Avenue, are not occupied for at least 10 months out of the year.
The reason? For starters, many of these apartments are owned by wealthy foreign investors. Indeed, international investors poured $50 billion into real estate in the U.S. in 2012. But many of these overseas investors are simply looking to hide their cash — or generate big returns — by pouring their money into New York City property. Actually living in these properties for any length of time is not necessarily part of the plan.
The influx of international players has also reduced inventory and, in the process, driven values up on high-end apartments. That turn of events has priced some potential buyers out of the market.
At the same time, the new towers that are home to many of New York City’s ritziest apartments cost property developers a bundle to construct. Typically, developers need to sell these top-end apartments at prices around $5,000 per square foot. This is about 30 percent higher than the record price paid for a penthouse in 2004. At those rates, developers are finding it difficult to sell units to any but the super wealthy. And these days, that’s often buyers from budding economic superpowers like China and Russia [NY Mag] — Claire Moses