Even as the economy improves, Americans continue to be wary of buying condos. Fool me once, shame on me, but fool me twice? Well, you get the picture. As a result, a new trend seems to be emerging in the world of renting: the rise of high-end rental buildings. No pun intended.
The preference for luxury apartment rentals is evident in cities across the nation–and not just the ones you would expect. In Minneapolis, for example, the Twin Cities skyline is getting facelift in 2014 when two high-rise luxury apartment buildings reach completion–the first to be built there in decades.
Many developers of luxury condos have been forced to rent out their pricey digs because they’ve been unable to convince people to buy. This is most evident in Frank Gehry’s sparkling New York city skyscraper.
Once intended to include a combination of luxury condominiums and apartment rentals, Gehry’s masterpiece is now renting out every single unit, largely due to the fact that even the wealthiest Americans are opting to rent instead of taking out an expensive mortgage to buy a condo.
Chicago is seeing a similar phenomenon take hold. High-end rental buildings are springing up along the Windy City’s coastline as owners begin to realize that there’s an increasing demand for luxury apartments.
In Silicon Valley, it was big news when the ritzy 360 Residences condominium building made the switch from selling condos to renting apartments. It seems they weren’t able to sell a single condominium, despite the area being full of tech-savvy millionaires.
So what gives? Why are people who would normally jump at the opportunity to buy a sprawling, luxe condo in America’s shining metropolises choosing to rent instead?
To begin with, renting gives would-be condo owners more flexibility. If you have a high-paying corporate job that requires a great deal of travel or may ask you to move to a new city at a moment’s notice, why deal with the hassle of buying? Renting a high-end apartment will give you access to the same perks and amenities as buying, but you won’t need to feel tied down to a particular building or neighborhood.
Renting a luxury apartment instead of taking on a mortgage and buying a condo also frees up a bit of extra cash flow for investing, whether it be in the rising stock market or your own business.
Whatever the reason, luxury apartment rentals seem to be taking the place of condo-buying, and the fact that these sparkling buildings continue to spring up in cities across America indicate that this trend will continue.