While demand for affordable and mid-range homes across the country is still at a major high, the luxury real estate market is experiencing a dip as years of uncontrolled price growth start to catch up with many cities.
A Redfin (RDFN) report shows that sales of homes in the top 5% of their area's price point plunged by 44.6% between 2022 and 2023 even as sale prices were still up by 9%.
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Even though a famous seller can give a particular listing some cachet and media attention, nothing will make the sales process drag on like an overly inflated asking price.
That $19.25 Million Penthouse House Is Actually A Major Price Cut
While Jimmy Choo co-founder Tamara Mellon's $19.5 million penthouse sale was New York's most expensive real estate transaction during the week it went into contract, the price is actually a bit below the $20 million paid for it in 2008.
It is also an almost $15 million price cut from the $34 million that Mellon had initially asked for it.
One of four units in the prestigious Carhart Mansion in New York's Upper East Side, the penthouse spans 7,100 square feet and has four bedrooms and four-and-a-half bathrooms. It also comes with an additional 5,200 square feet of balcony and terrace space.
While the unit is lavish and stylishly renovated to be line with its fashion mogul owner's style, the initial asking price was over-the-top even for New York luxury standards — in 2014, Mellon first listed the penthouse for $34 million and, in no rush to sell, gradually lowered it to $23.9, $22 and $20 million.
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The last listing, which was held by Barbara Corcoran's Corcoran Group, was asking for $19.5 million. Throughout the time the house remained on the market, the duplex on 3 East 95th Street was also periodically advertised as a rental for $75,000 a month.
The buyer who sealed the deal for $19.25 million was able to remain anonymous through an LLC purchase.
Mellon, who co-founded the Jimmy Choo shoe line and fashion house alongside its namesake Choo in 1996, had purchased the penthouse for $20 million in 2008.
While she is less of a household name outside of fashion circles, Mellon was the one who secured the funding for Choo to start his own line and, as fashion assistant at British Vogue, get it that early attention and celebrity backing.
Since 2017, Jimmy Choo has been owned by the British fashion holding company Capri Holdings (CPRI) and a mainstay in the luxury fashion space.
While the penthouse's inability to sell for nine years despite many market changes indicates a particularly inflated asking price, the last few months have been a particularly tumultuous one for New York's luxury real estate.
Data from real estate consultancy firm Knight Frank found that 244 residential real estate sales worth more than $10 million took place in New York in 2022 but 2023 has been slower amid fears of a recession — while February saw a rush of sales that included the $23.5 million purchase of a penthouse owned by former Gap (GPS) and J. Crew executive Mickey Drexler, overall luxury sale fell by 38% in the first quarter of 2023 amid high interest rates and fear of a recession.
