When we use the word ‘luxury,’ what do we mean? In New York City, by definition, a luxury property is one worth more than $4 million. In the bigger picture, the word connotes something like a Lamborghini, Ferrari, or a Rolex—something more expensive than a lesser version of it would cost. Luxury items are things that people buy because they love them and see them as cool and cutting edge.
Now, when people look at luxury real estate, they may or may not expect some negotiability; I don’t think that Ferraris are highly negotiable, and when I think of penthouses, I know they sometimes sell for asking price, and they sometimes sell for less. In the last 30 days in New York City, over 100 properties sold for more than $4 million, according to an Olshan report.
"In New York City, by definition, a luxury property is one worth more than $4 million."
As real estate professionals, we want to use round numbers to price a luxury property and create impulses for the buyer. While it won’t necessarily skyrocket in value, we want to convey confidence that this asset’s price is in line with the coolness that it projects. Optimistically, there’s a buyer out there that will marry with that price.
If you have any questions about the luxury market, I’d love to speak with you. Who doesn’t want to talk about the most precious and beautiful real estate in the entire world?