Young Buyers Trade Prestige of Luxury Co-op Ownership for Amenity Packed Condos

Past decades of New York’s most exclusive luxury cooperatives located along Park and Fifth Avenue claiming the title of what has been described as the “pinnacle of New York luxury” seems to be losing some of its cachet. The residential market is seeing a shift among younger affluent buyers towards the trendier, amenity-packed new condominiums in Manhattan’s Downtown neighborhoods, or for those that want to be uptown, the “super high-end condo” projects. Despite representing a symbol of “old-money elegance and exclusivity,” in recent years the spread of the sale price fetched between co-ops and condos selling for over $10 million has become “unnaturally large.” Between 2014 and 2024, the median price of condos within the over $10 million market rose 45% to $19.25 million. In contrast, sales of co-ops within the same market and timeframe saw a more moderate median price growth of around 16% to $15.49 million; and although based on a “relatively small number of transactions, they speak to a broader trend of co-ops slipping behind” according to reported data and comments by real estate analytics firm UrbanDigs. In comparison to condominiums, “residents don’t own their apartments, but rather buy shares in a corporation.” Contrary to the operating structure of condo boards, the structure of the co-op system that has been around since the late 19th century “allows residents tight control over nearly everything that takes place in the building.

Further impacting the attraction of these exclusive Park and 5th Avenue co-ops, many are within buildings dating back to 1920 and despite their elegance it has been estimated by real estate agents that at least 50% are in need of some degree of renovation, which in addition to facing unpredictable costs, the co-op buyer will also have to deal with the guidelines of the co-op board. .” Looking beyond the attraction of the wide variety of tenant amenities packed into the newly constructed luxury condominiums, today’s younger people have a different relationship with their homes and unlike their parents and grandparents that “might have been tethered to New York most of the year,” the young wealthy buyers of today have become increasingly mobile thanks to remote work and technology, making the requirement that co-op shareholders be full-time residents incompatible with their lifestyle.

Source:    https://www.wsj.com/real-estate/luxury-homes/new-york-co-op-apartments-trends-0085110f