With pools, playrooms and yoga studios becoming commonplace of multifamily buildings, the luxury condominium and apartment market is in the midst of an amenities war, a New York Times article said.
Luxury condos and apartments offer concierges, pet spas, gyms, one in Boston even offers a resident-only restaurant. Developers are seeking more ways to draw in residents, and keep them, by adding these extravagant perks.
But, as the article notes, the fact that there’s an amenities war means that the market is cooling at these higher price points.
From the article:
“What we have in any market cycle when the talk turns to amenities are signs that sales are slowing,” said Jonathan J. Miller, president and chief executive of Miller Samuel, a real estate appraisal and consulting firm in New York.
According to article, prices for ultraluxury condos in New York have been on the decline since they peaked in 2016, citing data from real estate site StreetEasy, which found that developers continued building bigger and better condos despite the market dictating that demand for such condos was weakening.
This caused a glut at the high end.
Again, from the article:
Workforce housing is in short supply, yet developers focus on ultra luxury because that is where they think they can make the biggest profit, said Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors.
“During the housing bubble, one of the big amenities was the pet spa,” Mr. Miller said. “That branding gives you the impression of dogs and cats lounging in chairs by the pool with a drink and an umbrella. All it was was a slop sink in a closet.”
According to these article, some of the top amenities can add add about 20% to the purchase price and 20% to 30% to the rent. Whether someone is willing to pay it is a different question.