My most prized Chanel bag sits on a black pedestal in a walk-in closet the size of a bedroom. Behind that are rows and rows of glittery heels–the kind I might wear to an awards acceptance speech or a pole-dancing class–and next to them, a rack of silky camisoles without any built-in bras. There’s a Jackson Pollock hanging outside my closet door, and my marble fireplace appears to stretch the width of three ping pong tables. The living room overlooks a wide-angle view of Miami’s Key Biscayne Bridge.
I spin around, taking stock of my $20 million luxury apartment. This is supposed to be the apex of comfort, but beads of sweat are dampening the back of my neck. In the closet, I pivot to catch myself in the full-length mirror. When I do, the reflection is missing.
I quickly tug the Oculus Rift off my head, ending my virtual trip into a luxury apartment–a trip that costs $95,000.
“If you step closer to the fire, you hear it crackling,” Gonzalo Navarro, the Miami-based principal of architecture visualization firm ArX Solutions, tells me. He’s standing on a 14th-floor suite of New York City’s Paramount hotel, holding an Xbox controller in front of a 72-inch flat screen TV. His New York-based business partner, Nicolas Michael, a software designer in matte black frames, sits on a cream-colored couch behind him with his hands clasped in front of his knees. They’ve invited me here, to a ritzy midtown hotel on a Wednesday afternoon, to try out a technology that they say will revolutionize the real estate industry: an Oculus Rift simulator for luxury homes.
My time spent in the virtual closet–”every woman’s dream,” as Navarro puts it–is part of one such virtual reality package, a Miami apartment streaked with marble and studded with the kind of black, rectangular furniture that implies business class taste.
You might be wondering why anyone might ever need an Oculus Rift simulation of a $20 million apartment. But as Navarro explains, prospective buyers signing over millions of dollars (often in cash) want to see that their expensive tastes will be meticulously fulfilled. ArX makes its money by creating such architectural renderings and animations for developers in places like New York, Miami, Abu Dhabi, Saudi Arabia, and Dubai; these developers then show their products to high-net-worth clientele. Creating these renderings–plus a simulation–could take up to three months, depending on how many different options a client might want to see.
The problem is that some of these developers’ clients–the 1%, if not the 0.1%–don’t have the mental agility to picture a kitchen counter with one type of white mirror lacquer over another. So that’s where the Oculus Rift comes in. Navarro holds up his hands, creating a small square of imaginary marble or wood. “Some can imagine it and some cannot,” Michael says from the couch. “And most people cannot,” Navarro adds.
ArX Solutions launched as a real estate visualization company in 1998, starting with a new, 3-D visualization of a landmark gas station for a IPF, a major oil company in Argentina. But business picked up much faster in the early aughts. Developers’ clients wanted more than basic renderings; they wanted to see the leather finishes on custom-made furniture.
By September of 2008, Navarro figured that the luxury apartment market might still be insulated from the crushing destruction of the Great Recession. But ArX president Patricio Navarro warned the partners otherwise, so eventually the company laid off some of its employees, pushed the survivors to work more efficiently, and stripped down its expenses. ArX survived the crash and soon flourished in the recovery; in 2009, the company was able to open a New York office. And then new demand rushed in. “I think that luxury buildings have exploded,” Michael says.
The demand that Michael and Navarro witnessed reflects a bigger trend. By April of this year, home sales for 99% of the real estate market had dropped nearly 8%. But one segment of the real estate industry has grown much more quickly. The most expensive 1% of real estate had been outpacing the rest of the market for years, showing a 21% increase of homes sold in the first four months of 2014 alone. In San Francisco, where new tech money is rapidly reshaping the city into a playground for the wealthy, the top 1% of homes sell for 6.5 times the median price of the rest of the city’s living spaces. Miami, where my simulation transported me to, maintains one of the most extravagant gaps between luxury homes and everything else. The top 1% of luxury homes sold in Miami are nearly 15 times the median price of the rest of the city’s residential real estate.
The growth of the top 1% of the real estate market contrasts deeply with the struggle of homeownership for the middle and working classes. Only 64.8% of Americans own homes today, the smallest percentage of the populace to do so in the last 19 years. Differences in homeownership rates are even more depressingly split along racial lines, and banks are cagey about lending to low-income families. A Trulia study earlier this year found that in 20 out of the 100 largest American cities, most homes are completely unaffordable for middle class buyers. Meanwhile, millennials saddled by student loan debt and sluggish job prospects face decades of renting ahead of them, maybe for life.
In August, the Census Bureau released a report showing that while America’s middle class loses net worth in the recovery, the uppermost tiers of society are absorbing much of the economy’s new gains. Today, even despite the attention drawn to income inequality in the aftermath of the recession, the gap between rich and poor is still increasing.
The future looks different for ArX’s developers and their clients. For them, the problem isn’t buying a home; it’s being able to see the different types of finishes in a luxury condo from the comfort of their (other) homes. So, in 2013, Navarro and his colleagues began working on a version of their work for the Oculus Rift.
I’m one of the first to try it.
As I pull the Oculus Rift headset over my ears, Navarro tells me not to toggle forward too quickly–the resolution and the virtual reality’s response time is just skewed enough to create quite a bit of dizziness. I ignore him completely and vroom ahead to the low glass table in front of the fireplace, though top speed still feels like moving on a slow Segway.
It’s exhilarating. As it happens, extreme levels of conspicuous consumption–even in virtual reality–feel really, really good. Moreover, it feels like the cloud of sharp, pheromone-tinged musk the Paramount Hotel sprayed in its lobby is beginning to go to my head. I turn to the couches, which are a dusty shade of ecru. There’s a small black footstool that looks ideal for cutting lines of cocaine, and I have the strong urge to roll my dirty plebeian body all over the nice furniture until it leaves sweat stains on the cushions.
I turn toward the kitchen. I peer into a gilded basket of green, pixelated balls, which Navarro tells me are apples. In the bathroom, someone has already drawn a bath in a container that resembles a museum fountain, and if I move my head toward the faucet I can hear the hot water running.
By the time I reach the closet, which is larger than any room I have inhabited during my adult life, I’m already feeling warm and dizzy.
This past week, Navarro and Michael presented this simulation to developers in Miami. Instead of the 72-inch screen I used, they’ll be showcasing the simulation on two curved screens with hyper hi-def resolutions of 4,000 pixels.
Demand for luxury apartments might level off in the next couple of years, Navarro acknowledges, but no one really cares. The market is stable, and ArX has more than 100 clients. The company calculates that half of all the recent “high-end” projects in Miami are using its services.
But what about everyone else? What about the vast numbers of people who are now unable to buy a home in their cities, let alone a $95,000 virtual reality visualization of one?
Navarro smiles and shrugs. “That’s a big problem. We used to work with urbanists, and they were saying that teachers, firefighters, police guys–their salaries are low and they cannot afford to live in a place where they have to pay $700,000 for an apartment, so there’s got to be more affordable housing, or they move away.”
Navarro suggests that homeownership–and this kind of technology–might trickle down to the middle class, but he doesn’t sound entirely sure. “Eventually, someone’s going to take care of a market that no one else is taking care of, but honestly I ask myself the same question,” he says.
Maria Lanao, the ArX publicist who invited me to the simulation, sympathetically shows me the door. “Don’t lose hope,” she tells me on my way out. “In Miami, some go for $7 million.”