(Photo: James Leyne/Corbis)

New Luxe
The past two years have seen a parade of trophy penthouses hit the market, their prices escalating as sky-high as the apartments themselves: the $27 million penthouse at One Beacon Court, a.k.a. the new Bloomberg tower across from Bloomingdale’s; the $30 million duplex atop Trump Park Avenue; the $42 million raw space capping Time Warner. The mega-million sales generate tons of buzz, but will these apartments still be worth the same if the much-contemplated bubble pops? Probably not. The prices have run up too fast for properties that, unlike their prewar equivalents, are not a finite resource. “There’s a certain sexiness in owning a $20 million [new] property that may not be so sexy when the market falls,” says Jeff Jackson, of leading residential real-estate appraisal firm Mitchell, Maxwell & Jackson. Every new marquee building gets a marquee penthouse, and there’s a very limited pool of buyers for these things, all of whom can easily decide to buy something else, like a townhouse. There’s a mitigating factor, of course—they’re rich enough not to care about market downturns—and for now, they’re still shopping. Douglas Elliman dynamo Dolly Lenz says she recently sold a $25 million apartment to a client who “barely batted an eyelash.” When asked how he felt about such a commitment, he told her, “I just bought a $19 million painting. To buy a $25 million apartment is not such a big deal.” Then again, a Renoir will still be a Renoir no matter what; an overpriced Trump apartment is, well, that.

Risk Factor: 6.0