Monster condos on the move
The trend to huge, luxury condos is sweeping America.
NEW YORK (CNNMoney.com) - My, my, look how they've grown -- condos are ballooning to unprecedented sizes all over the United States.
The trend to mega-condo construction mirrors that of new single-family homes, which have expanded 60 percent in three decades, to an average of about 2,400 square feet, up from 1,500 square feet in 1970.
In Las Vegas, an 8,000 square foot plus penthouse went for $9 million last year, as did a 6,000 square foot place on the Potomac in D.C. In Florida, a developer is selling 20,000 square foot apartments.
"The large apartment at big dollars is outperforming every other segment of the market," says Pam Liebman, CEO of the Corcoran Group, one of New York's leading real estate brokerages. In Manhattan, the trend is intensifying.
"In 2005 we doubled the number of $10-million-plus apartments we sold over 2004, which itself was 78 percent higher than 2003," she says.
At the Stanhope, a luxury hotel converting to condo apartments (see When hotels go condo) , Corcoran has about 20 floor-through apartments available of 4,000 square feet or more. Starting price: $10 million.
"We've already had 80 people through, looking at these apartments," Liebman says.
Why are the people snapping up these monster condos? It's more than just the affluence of today's buyers, it's also the lifestyle these condos offer, says one interested observer, Paul Boomsma, executive vice president for Luxury Portfolio.
"People are looking for lower maintenance living," says Boomsma. "New condo developments continue to offer more and more lifestyle amenities. You can get your dry cleaning and housekeeping done. There are restaurants and shops. You're just an elevator ride away from your gym."
Many of the monster condo dwellers are those who, 15 years ago, would have bought the big house in the suburbs or country. Now, they want a place close to the office and to where the action is.
"They're not eager to do the yard work anymore," says Winifred Gallagher, author of "House Thinking: A Room-by-Room Look at How We Live."
It's not just convenience and simplicity, however, buyers of really impressive places have something else going on as well.
"Similar to McMansions, oversized condos are status displays," says Gallagher. "People move around a lot. When you get where you're going, no one knows who you are. One way to proclaim your status is to live in a large, expensive piece of property."
Crime and residence
In urban centers, the choice has become more compelling as crime rates have fallen. City dwellers no longer flee to the suburbs en masse to escape muggers.
"Across the country downtowns have been reinvigorated and become destination points for 24-hour living," says Jonathan Miller, a founder of MillerSamuel, a real estate research provider.
Downtowns are fashionable, convenient, and fun again, and the condo lifestyle lends itself to the surroundings. They are becoming popular even in cities that never had much of an upscale downtown residential section before, according to Boomsma, places like Reno and San Diego. Luxury condos there are rewriting the scene.
But it's in places like Manhattan, the last great bastion of the sub-300 square foot, studio apartment, where the luxury condo apartment has reached its zenith. ("Now you have 300 square feet master baths," says Liebman.) A 12,000 square foot penthouse in the Time Warner Center sold for $42.25 million recently.
Several years ago New York developers noticed that many people were buying the apartments next door and combining them, according to Miller. "The developers started saying, 'Let's build bigger apartments,'" he says.
That has sent the size of the average new Manhattan condo from 1,188 square feet in 1996 to 1,421 in 2004, according to Miller. Prices have followed. Condos of 4,000 square feet or more sold for an average of $9.2 million in 2005, up from $2.4 million in 1996.
Many of the monster condos, both in center cities and in resort areas, are bought as second or even third homes. An owner may have a main residence in Chicago, a ski vacation condo in Aspen, and a winter home in Palm Beach. And they're all big.
"They want the same kind of space in their second and third homes as they have in their primary residence," says Liebman.
How much is your home is worth. Click here.
Many hotels are converting to condo residences. Click here for that story.