Luxury Condos on the (High) Rise
If you tell someone that you're looking to buy a condominium, chances are they'll assume that you want a cheaper alternative to single family real estate. That many people associate condo properties with saving is not surprising- historically condos have been cheaper than traditional homes (and slower to appreciate), and in fast-paced (read: metropolitan) markets they are often the only realistic refuge for the average homebuyer. Today, an expanding horizon of condominium options is redefining the way the world views the property type. At the forefront of the condo craze is the luxury condominium sector.
The Market Expands
In the past, condo sales primarily interested either first time buyers (often young urban singles) or down-sizing baby boomers (often empty-nesters and retirees). That trend gradually changed through the 90's and early 21st century, with a broader array of buyers considering condos a first choice rather than a last resort.
Hallmarks of the Luxury Condo
While there isn't one "smoking gun" reason for this increased interest in condos, the rising price of the average single family home undoubtedly was a major factor. At the same time, our country has seen significant shifts in our demographic makeup over recent years (for instance, the number of non-family households has been on a consistent climb since the 1940's). With a growing number of singles, single parents, young professional couples and empty nesters in the marketplace, the emphasis on large single-family homes lessened.
The lynchpin of every lavish condominium property is the high quality of the construction itself. Designer appliances, high-end fixtures, custom cabinetry and marble countertops are the norm. Buyers of high-end condominiums expect that both private and common spaces will be designed with the utmost care and replete with the best furnishings available.
In addition, luxury condo projects typically offer some combination of on-site amenities such as 24 hour security/staff, pool, sauna, state-of-the-art fitness centers, business centers, valet and underground parking, doormen, concierge service, dry cleaning service and in some cases even maid service. Premium condo properties are also generally located close to desirable community features such as movie theaters, restaurants and shopping districts.
It's important to remember that the word "condominium" refers to an ownership arrangement, not a specific architectural style. While many high-end condos are located in the glimmering high rise towers that are cropping up in cities across the country, numerous others are located in sprawling, multi-building complexes. These are especially common in waterfront, "vacation", or suburban markets. Many locations cater to a wide variety of buyers by offering units at various sizes and price points.
Another area in which luxury condos break the mold is overall size: many upscale condominiums can tip the scales at over 4,000 square feet. The image of the "downsizing" condo owner often doesn't fit when it comes to properties at the top end of the spectrum.
One of the fastest growing trends in the condominium sector of the real estate industry is the combination condo-hotel (or "condotel", as they are sometimes dubbed). In essence, these are permanent residences located within luxury hotel buildings. Owners of "condotel" units enjoy all the perks of a world-class hotel, including fine dining opportunities, room service and housekeeping. Luxury combination condo-hotel projects have sprung up in urban and coastal markets across the U.S. and nearly every major hotel chain in the world have a condo division.
Once little more than a trend within the condominium market, condo-hotel combinations have become increasingly popular, pushing this segment of the marketplace more and more into the mainstream (for example, last year the National Association of Condo Hotel Owners was formed). Purchasing of a condo-hotel unit is generally more complicated than buying a traditional condo, and the rate of appreciation for such units is generally lower as well. In many cases owners have the option of enrolling in rental programs that allow them to rent-back their units to hotel guests while they are away.
Luxury Condominium Buyers
The brisk rate at which luxury condominium projects are being built in many markets begs the question: who's buying? No one stereotype defines the luxury condominium buyer, but there is data to support the idea that these properties are especially popular amongst both single/couples in their late 20s and established professionals in their 40s and 50s.
Are They Worth the Money?
The price tag for a luxury condo may be enough to give the average condo buyer nightmares, as many properties can soar upwards of $2,000 per square foot. Yet many buyers prefer the convenience and service of such properties over the size and privacy of single family homes located in conventional residential neighborhoods. For those with the money to spend, the whether or not a luxury condo is worth the cost becomes largely a question of living style and priorities.