Renters live it up in luxury condos that didn't sell

A glut of unsold luxury condos is providing a great opportunity for renters, who are finding deals on new buildings with lots of amenities.

It's not bargain living, but it's a lot cheaper than buying in those buildings would have been, especially during the boom.

• Is renting the new American dream?

For $2,630, tenants can get a 600-square-foot studio in Frank Gehry's New York by Gehry, the tallest residential tower in the world. And it's rent-stabilized, so the price won't rise precipitously in the future.

"People are liking the fact that they don't have to commit to a mortgage and a large dollar amount to live here," MaryAnne Gilmartin, executive vice president of Forest City Ratner, the building's developer, told The Associated Press.

In Miami, the once nearly empty condo buildings constructed near the end of the housing boom are home to tenants who are enjoying waterfront views and a vibrant urban lifestyle they could never have afforded before.

• Find an apartment in a luxury building

"Five years ago, you wouldn’t have kids fresh out of college living in luxury like this," Brandon Klein, 26, told Bloomberg. He shares a $2,700-a-month waterfront condo in downtown Miami with two roommates, giving them access to a 24-hour concierge, gym, spa and steam room.

Post continues below

In some cases, developers are turning condos they had planned to sell into rental apartments. In others, investors are taking advantage of plummeting prices and buying units to rent out.

• Buyers want shorter commutes, agents say

Either way, it's a boon for tenants.

The upscale buildings and amenities appeal to urban professionals who aren't sure they want to buy into an uncertain real-estate market.

As Michelle Conlin of The Associated Press writes:

Conflicting signals about the market have only added to the allure of renting for those who might otherwise buy. Prices and interest rates are low. But lending standards are strict. Supply is abundant. But so are the forecasts that the U.S. could be in for a lost decade of sideways house prices. It's led to a resurgence in people taking advantage of the "renter's subsidy," the idea that while real-estate prices are stuck or moving lower, it's better — and cheaper — to rent premium real estate than it is to buy.