Super deluxe condominiums are on the rise on Long Island

January 1,2018

Media

In case you missed it, The Ritz-Carlton Residences, North Hills was featured in a story in Newsday about super deluxe condominiums. Read an exceprt from the story below.

By Maura McDermott | December 22, 2017 

Super deluxe condominiums are rising on Long Island, with starting prices at $1 million or more, amenities including pools, golf simulators and private cinemas, and staff that will deliver poolside snacks and cocktails, offer lifts to the train station, bring fresh flowers and even walk residents’ dogs.

Demand is strong. Some buyers are purchasing two multimillion-dollar condominiums and combining them to make room for visiting relatives, friends and clients, or for an expansive collection of art and furniture.

At the Ritz-Carlton Residences in North Hills, which opened last year, all but four of the first 110 units have sold, at prices from $1.5 million to $6 million. Uniondale-based developer RXR Realty initially planned to offer 124 units, but 14 buyers each purchased two adjacent units and combined them into homes up to 3,800 square feet.

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Aileen and Alvin Murstein in the two condo units they purchased an combined into one unit at the Ritz-Carlton in North HIlls Nov. 3, 2017 Photo Credit: Newsday / J. Conrad Williams Jr.

Those buyers “are still downsizing from a 6,000-square-foot home, or 7,000- or 10,000-, but they’re not going down so far as to feel like they’re in a small apartment,” said Gail Holman, an associate broker at Daniel Gale Sotheby’s International Realty who is handling sales at the complex.

RXR took note of the demand for larger condos and is constructing roomier residences — up to 3,700 square feet — as it builds 120 more condos, due to be completed in early 2019. Forty of those have gone into contract, the developer said.

The boom in luxury condominiums is a relatively new trend on Long Island, where condo developments were once mostly “utilitarian,” said Jonathan Miller, chief executive of Manhattan-based appraisal firm Miller Samuel. For high-end buyers, he said, “it’s less about downsizing and more about having someone else taking care of the lawn, the roof, painting . . . and also getting these common-area amenities that they wouldn’t get in a single-family home.”

Baby boomers downsizing from 5-acre estates on the North Shore and affluent families and singles seeking an easy commute to Manhattan and the Hamptons are among those driving sales, brokers said.

Developers and real estate brokers express optimism about the prospects for new high-end condos.

To be sure, multimillion-dollar condos remain a sliver of Long Island’s housing market. Condo sales make up only 14 percent of all sales on Long Island, and they trade for a median price of $290,000, the most recent report from Miller Samuel and brokerage Douglas Elliman shows.

But sales of condos for $1 million and up have spiked since 2014, Miller said. That’s when the luxury housing boom in Manhattan — where condos and co-ops now sell for an average of $2 million — began pushing even affluent buyers to less costly locales such as the Island, he said.

From 2013 to 2015, the number of condo sales for $1 million and up on Long Island soared from 13 to 225, Miller Samuel figures show. Long Island had 159 such sales last year, and 111 so far this year, Miller Samuel figures show. The figures include most sales of condominiums in multifamily buildings, plus town houses and free-standing homes with homeowners associations.

Online real estate listings show condominiums in multifamily buildings selling for $1 million and up in places ranging from the North Shore and Long Beach in Nassau County to waterfront communities in Suffolk County such as Northport and the East End.

In an indication that developers are building pricier units, the expected cost of construction is rising. So far this year, builders have taken out permits to construct 236 developments of five or more units in Nassau County, at an estimated construction cost of nearly $340,000 per unit, census figures show. That’s the highest average cost in at least a decade; over the previous 10 years estimated costs ranged from about $29,000 to $217,000.

It is unclear what impact the tax overhaul signed into law on Friday by President Donald Trump will have on demand for high-end condominiums. Some real estate and tax industry experts predicted the new $10,000 limit on federal tax deductions for state and local taxes, and the $750,000 cap on mortgage debt eligible for interest deductions, will prompt affluent buyers to scale back their budgets or delay purchases. Others believe lower tax rates will put more money in the pockets of high-income buyers, potentially spurring sales.

But wealthy Long Islanders can expect tax savings that could range from a few thousand dollars for a salaried employee to roughly $50,000 or more for some business owners, said Wes Kirchhoff, a certified public accountant and professor at Molloy College in Rockville Centre.

To be sure, the loss of certain tax deductions will be “bothersome,” he said. But, “I don’t care who you are, $50,000 in your pocket is a good thing, so I see that as a plus for the market.”

Kirchhoff said he has several friends who have been shopping for high-end condos on Long Island. Such buyers, he said, “want luxury rather than space.”

That was the case for Aileen Murstein, who is in her 70s, and her husband, Alvin Murstein, 80, who combined two units at the Ritz-Carlton Residences. The move from their house in Old Westbury was about the “peace of mind” that comes with a staff to handle maintenance, security and day-to-day tasks such as sending clothes to the dry cleaner, as well as amenities that include indoor and outdoor pools and a fitness center.

Their desire, she said, was to “lock the door, go on your trip, not worry about anything. A lot of empty nesters feel the same way — they don’t want to have to worry about snow removal or leaks.”

Now, Aileen Murstein said, she and her husband have shorter commutes to their jobs — Aileen is a real estate associate broker in Roslyn, and Alvin is chief executive of a financial firm in Manhattan — and she makes regular use of the gym. And their spacious three-bedroom home has enough room for their collection of sculptures, paintings and photographs.

Downsizers make up a majority of buyers at the Ritz-Carlton, said Joe Graziose, senior vice president at RXR. Many, he said, “are not looking at single-family homes at all, they’re looking at communal living.”

At the Ritz-Carlton, Graziose said, “I’m selling a lifestyle.” The amenities include poolside food and drinks service, a screening room, billiards room, concierge and valet service and rides to the train station in a black Cadillac Escalade. Housekeeping and dog-walking can be arranged for extra fees. Monthly common charges and taxes range from about $3,000 a month for a 1,700-square-foot unit to about $6,200 for a 3,400-square-foot, selling for $4.6 million.

Compared with the costs of maintaining a single-family home with a pool and landscaping, Graziose said, “it’s a good value proposition.” RXR also is constructing The Beacon, a 167-unit condo building in the massive Garvies Point development in Glen Cove, where asking prices range from $575,000 to $2.7 million and about one-fourth of the condos have gone under contract.

Read the full Newsday article here.

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