In just six months, the price of a New York City apartment has dropped by $6.5 million, revealing that the real estate market might be in flux even in one of the most expensive cities in the country.
A four-bedroom apartment at 111 West 57th Street with Central Park views is now going for about $22 million. In June, the home was listed for $28.5 million, showing a drop of about $6.5 million in just six months, according to data from Processed Webdata by Pricing Culture provided to Newsweek.
The home boasts 4,492 square feet, four bedrooms and a Great Room with 14-foot ceilings and floor-to-ceiling windows showcasing Central Park.
The kitchen also has a view of Central Park, with bedrooms revealing southern skyline views.
The apartment's drop in value might reflect a larger trend, as New York City listings have declined by about 11 percent over the past year.
"We have seen many luxury homes being sold at somewhat discounted prices," title and escrow expert Alan Chang told Newsweek. "This might be a sign in changing preferences prioritizing space and privacy over a trendy location. For the same amount of money or less, you could have acreage with a larger and more luxurious home in a safer neighborhood, and less taxes."
During the COVID-19 pandemic, many wealthy New Yorkers fled the city and settled in other states as remote work became more prevalent, but prices soon surged again when remote work became less popular.
"With remote work becoming increasingly a thing of the past and most major employers in locations like New York calling employees to return to the office, we saw a surge in pricing of many properties in the city in 2022 and 2023 that hoped to cash-in on this return to the city for some," Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
"However, with that window quickly fading, some sellers are coming to the harsh reality those pricing premiums may not be able to fetch their asking prices."
Beene said buyers should expect to see even more markdowns on high-end properties, especially from sellers eager to get the homes off their hands.
Rising interest rates have also slowed the real estate market by making mortgages more expensive, likely reducing demand, said Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group.
"Additionally, a surge of high-end housing units hitting the market simultaneously increased supply, giving buyers more negotiating power," Thompson told Newsweek. "This reflects a shift in consumer preferences, as buyers are becoming more cost-conscious in today's economic environment."
Now that interest rates are in the 6 percent to 7 percent range, the lower prices could be a new normal unless a significant shift forces them lower, Thompson added.
"Artificially low rates in the past drove housing prices up, making homes unaffordable for many across the country," Thompson said. "This adjustment period may take time to resolve, and patience will be key as the market works through these changes."
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