Bloomberg on decline at the top

I think it is because the high end Russian money cannot so easily expatriate cash in the face of the Russian recession. Even if they have USD cash on hand, it looks bad to buy a trophy apartment in Manhattan to their government.

Thoughts?

Who cares ?

budda, the price decline is in the segment whose buyer pool shells out $10 million easy-peasy. How many $30 million condos are needed? It almost doesn't matter when so many are being built all at once. If there were only one 432 Park Ave. under construction it would sell out quickly. When there are several like buildings, with more announced "coming soon," .... eh. But if 432 Park Avenue subdivides it's previously planned $30 million units into two $17.95 million units, does that put them within reach of the people desperately searching for classic 6s? As the article says: "Prices for luxury homes are moving in the opposite direction from the broader Manhattan market, where values are still rising and discounts are few"

Two thoughts: the first is that it will eventually chill the broader market, since lots of people can't do math, and the second is that SE's definition of "luxury" (top 20% of what's trading) puts their average price right where Miller Samuel/Elliman's entry point of luxury is (Jon Miller uses top 10% of what's trading, IIRC). SE's definition seems broad to me, since people who are shopping for ~$3 million homes are often buying them as primary residences, not as safe-deposit boxes.

ali r.
{downtown broker}

Ali, is the market for 2.5-3 million slowing down and going south?

@lowery I don't think so. My sense when I was recently out with clients in the $3 mm range is that the unrenovated or flawed stuff is sitting, but the renovated stuff is going quickly. To try to get away from anecdote/singular experience, UrbanDigs numbers (which admittedly are a larger cachement of up to $5mm) show an increase in pending sales since October.

The real tell will be when bonuses drop, but it looks so far like the equity market and Wall Street are doing okay, which are both big market positives, and the rate increase, if anything, moves to get people in the game.

I think the real estate market will cool -- just because the up part of the cycle has been running for six years now -- but I don't think for a year, or maybe even two.

ali r.
{downtown broker}

I called the peak in Q2.

Ali, down in the lower reaches of the market there's been a flood of people cashing out on gains and moving to larger spaces in cheaper areas. Trickle down actually feels like a flood. That's why I'm interested in whether the crazy-luxe market trickles down to the next level down, or whether there's wide a gulf between the top tier and the next tiers.