Every now and then I catch myself talking almost dismissively about a million dollars. That two bedroom co-op is a STEAL at $1,300,000. This one bedroom condo with a bath and a half is extremely well priced at $1,450,000. Doesn’t this buyer understand that you can’t buy anything in the West Village for under $2,000,000?
Then I catch myself. Good Lord, I think, we are actually talking about a MILLION DOLLARS! Now admittedly, a million dollars does not mean what it did when, in my childhood, the shadowy figure of John Berresford Tipton gave that amount away each week on the TV show “The Millionaire.” At that time, a million dollars could pretty much buy you anything. My parents bought their 14 room apartment on Park Avenue in the 1950s for around $15,000 (which my grandfather thought was an enormous amount to pay for an apartment; it wasn’t, after all, as if they were buying a house!) When Mr. Tipton’s secretary presented the random recipient of his largesse with the million dollar check (no question of a big tax bite, at least on TV), they could buy whatever they wanted: yachts, palatial homes, big jewels. And I, watching “The Millionaire” wide-eyed on our giant wood-boxed console TV, could not have imagined there would be a time when my colleagues and I would see $1,000,000 as barely entry level for a property in many of the sought after parts of New York City.
What has happened here goes beyond inflation. Inflation alone cannot explain the change in the value of my childhood home from $15,000 in 1958 to $15,000,000 today. There has been a sea change in the way New York residential real estate is perceived; it has morphed from being a sunk cost into a speculative investment. Apartments have become, in their own way, art. They are a hedge against the more volatile financial markets, they confer status and importance – while once apartments just were, now they represent! And because they represent, because they are trading in aspiration, they are much more than just square footage. They are a lifestyle choice, a point of entry. In many ways they commodify desire.
At some point residential real estate in New York, and Los Angeles, and a few other communities graduated from being where you live to being a significant portfolio asset. It always was, of course. But the degree to which it is now seen that way transforms its value. The sky is now the limit because the real estate isn’t only about itself, it’s also about you. Who you will be if you own it. Who your neighbors will be. How your life will be transformed, just as that knock on the door transformed the beneficiaries of John Berresford Tipton’s largesse in front of my eyes 50 years ago. A million dollars is still a lot of money, and we agents should never take it lightly or for granted. But for real estate in its role as a branded luxury item, as Warhol, or Candela, or Van Cleef and Arpels, a million isn’t much.