While the suburbs are making a comeback with homebuyers as seek out more space for themselves during the pandmic, investors are playing a longer-term game, betting on condos and a return to the city when the pandemic subsides.
The Wall Street Journal says that investors in Manhattan are being lured by reduced prices and are now scrambling to buy up inner city condominiums in bulk. Many investors are particularly interested in opportunities to buy up individual apartments wholesale, prompting the Journal to label them “Costco shoppers for condos.”
Those buying up large numbers of condos include fund managers and real estate firms. The Journal says they’re buying anything from 3 or 4 condos to more than 100 at once at steep discount prices. For the time being they intend to try and rent out those condos to eke out some profits, but in the longer term they intend to sell them on once the housing market gets back to normal. Developers might be enticed at the prospect of a bulk sale since many new projects in big cities are lingering for a lot longer than they bargained for, the Journal said.
Even so, most developers would prefer to keep these deals quiet, as individual buyers may be upset to learn about the significant savings that can be had by purchasing condos in bulk, as opposed to buying just a single unit.
Douglas Elliman Real Estate broker AnneMarie Alexander told the Journal that she’s working with a number of investor groups that have been making offers to buy dozens of newly built condos in bulk, and those offers are typically 25% to 35% lower than the regular asking price.