Photo of Trump Tower via Krystal T’s Flickr
Sales prices at the tony Midtown condo building at 721 Fifth Avenue have dropped sharply since Donald Trump began his presidential campaign, according to the Wall Street Journal. The median sale price and average price per square foot are down since 2015 and are now reaching the lows experienced during the last financial crisis. Brokers aren’t exactly sure whether the “Trump effect” has caused the slump–including issues specific to the tower such as heightened security, protests, and a general antipathy toward all things Trump–or it’s part of an overall softening of the luxury condo market.
Gabby Warshawer, director of research at CityRealty, said that though units are now indeed a bargain, “There is no way of knowing whether prices have taken a nose dive because of the restrictions that are now associated with living in the building—such as the Secret Service and police presence—or because the Trump brand so closely aligned with the building is having a depressing effect on prices.”
Though observers saw price reductions on listings during and after the election, hard sales numbers are just now becoming available. In five transactions so far this year, the average price per square foot in Trump Tower of about $2,100 was down 13 percent from 2016 and 23 percent from 2015, according to sales data compiled by CityRealty. That was the lowest figure since 2009. The median sale price of $2.2 million so far in 2017 was the lowest since 2007. By comparison, price per square foot throughout Midtown Manhattan has risen 0.3 percent since 2015 (excluding new developments), while the median price has increased 5.6 percent according to figures from Brown Harris Stevens.
Other Trump-branded properties have slid in value as well. At Trump International Hotel and Tower, built in the 1990s, sales have slowed and the average price per square foot is just over $3,600, down 24 percent from 2015 and over 11 percent since last year. A spokesperson for the Trump Organization said, “Despite that, Trump buildings have continue to be a leader in average [price per square foot] against competitor. We cater to the most discerning buyers in the world, and while we can’t control the ebbs and flows of the market, we are incredibly proud of the overall performance that Trump properties continue to achieve.”
It isn’t clear how much of a Trump effect there really is, because the most sluggish sales in the building have been among larger, more expensive apartments, making comparisons difficult. Four of the five sales this year were for one-bedroom units; six bigger units remain on the market. Appraiser Jonathan Miller of Miller Samuel Inc. said that appraisals in the building haven’t confirmed a slide in values.
But that may not be enough to quell concerns among sellers, many of whom have cut asking prices. Keller Williams NYC broker Richard Tayar, who has two listings at Trump Tower, said international buyers were looking to buy there while many New Yorkers and Americans avoiding the building. Foreign buyers “don’t have a very strong problem with the presidency,” he said. “They believe in the building. It is an iconic address. You have cachet that other buildings might not have.”
[Via Mansion Global]
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Neighborhoods : Midtown East