The high price of Manhattan real-estate is usually measured by sales prices. But for many buyers, it’s the maintenance fees that break the bank.
Monthly maintenance fees in Manhattan have soared to an average of $1.70 per square foot, meaning that a 1,200 square foot condo will cost you $2,000 a month in maintenance fees, on top of your mortgage, utilities and (usually) property taxes. (Read more below the video.)
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Maintenance fees have continued to climb throughout the recession even as prices dipped. Average maintenance fees have risen 30 percent since 2008, according to Jonathan Miller at Miller Samuel, the New York appraisal firm. That’s more than twice the rate of overall inflation.
The increase has been driven mostly by higher costs of building insurance, underlying mortgages, fuel and building staff, like doormen and supers.
But Miller said high maintenance fees can derail a deal or cause even wealthy buyers to sell if the fees get too high.
He said that some of the newer developments that came with high prices and high maintenance fees were forced to reduce their prices when buyers balked at the high monthly payments.
“There was an assumption during the boom that the wealthy didn’t care about maintenance and you could saddle an apartment with high fees and not have an impact,” he said. “That turned out not to be true. There is an inverse relationship between carrying costs and market value.”
Still, some rare apartments have both sky-high prices tags and high maintenance fees. The 18th floor of the Sherry-Netherland, currently on the market for $95 million, has monthly maintenance fees of $60,000.
The apartment is part of the hotel, so the fees include twice-daily maid service, spa services and other ultra-plush amenities.
But the apartment is proof that some of New York’s wealthy are still willing to pay more in monthly maintenance fees than some Americans pay for their house. We’ll see, of course, whether the apartment sells at its price.