In Manhattan, one of the cheapest apartments can be found in one of the island's swankiest neighborhoods. In a report from Bloomberg.com, a two bedroom apartment in the building known as Carnegie House would only cost a buyer $849,000.
The building is a co-op of 21 floors and is located on 57th Street near Central Park. The price is low because the ground underneath the building is owned by a third party. Now, the building and its homeowners pay rent to the owners/investors of the ground. This diminishes the value of the property and it is expected that the rent for the ground would increase by at least five times its current value or even more within the decade. Ten years from now, the lease over the ground beneath the building would be subject for review. This time around though, the said valuation would be near or in the neighborhood of current land values in Manhattan.
The median asking price for the listings for Carnegie Tower units stood at $629,000. Across Manhattan, the median home price was at $980,000, according to appraiser Miller Samuel Inc, and brokerage firm Douglas Elliman Real Estate.
Just nearby is the renowned Plaza Hotel, which is undergoing a price crisis in itself. While it has been a favored tourist destination and pop culture icon (Remember Home Alone?), it has become a bad real estate investment.
In a report from nydailynews.com, the prices of the condominiums in the prized hotel address have fallen miserably behind. In a report from cityrealty.com, as quoted in the nydailynews report, the increased number of high end condominium units in the posh neighborhood has dampened the demand for these older historic units. Many buyers are opting for the newer residences, showing off their wealth and financial capacity, instead of choosing to purchase elegance and style.
Such is the issue in the area known as "Billionaire's Row", one not owning the land it stands on and the other being set aside for younger newer models.
