Attention bargain shoppers: The late Brooke Astor's duplex at 778 Park Ave., with 14 rooms, six terraces and a brass-trimmed library with red lacquer walls, would have cost more than $40 million just three years ago. But today, less than a year after the listing debuted, the trophy property has a new broker and a new price tag: $29 million--a 37% discount.
All across Manhattan, but mostly concentrated in the Upper East Side, owners of luxury residencies are cutting prices by 20% to 25% on average, according to Stribling Executive Vice President Kirk Henckels, the broker of Astor's estate.
Tuesday, February 17, 2009
Sunday, February 15, 2009
Luxury Real Estate in Manhattan Drops Off
When it comes to Manhattan’s luxury $5-million-and-above real estate market, last year turned out great. Record-breaking, in fact.
But that’s due only to strength in the year’s first half. After that, things changed.
“That’s an understatement,” said Kirk Henckels, Stribling’s executive vice president and director of private brokerage, saying there was still an “absurd amount of money in the market and luxury spending was unabated” in 2008’s first six months.
Then Wall Street melted down and news broke about Bernard Madoff’s alleged Ponzi scheme. That helped drag down co-op sales 37.9% in the second half, compared to a year earlier, while condominium re-sales fell about a quarter, Stribling reported. Townhouses were a bit luckier, slipping 8.2%.
But that’s due only to strength in the year’s first half. After that, things changed.
“That’s an understatement,” said Kirk Henckels, Stribling’s executive vice president and director of private brokerage, saying there was still an “absurd amount of money in the market and luxury spending was unabated” in 2008’s first six months.
Then Wall Street melted down and news broke about Bernard Madoff’s alleged Ponzi scheme. That helped drag down co-op sales 37.9% in the second half, compared to a year earlier, while condominium re-sales fell about a quarter, Stribling reported. Townhouses were a bit luckier, slipping 8.2%.
Monday, February 9, 2009
Predicting 60% Decline for Manhattan Property
A very effective guide for long term home values is actually median home price to income. Houses actually don’t gain in value over the long haul. Urban density and usage shifts can dramatically change the value of real-estate, but outside of that real estate is just a flat asset. Here is an academic paper showing the value of prime real estate in Amsterdam over a 400 year period, it's a break even proposition.
A home is only worth what people can afford to pay for it. If you can squeeze more people onto a given area of land and create more homes then you can maximize the value of the land such as in Manhattan over the last few decades.
Over time the utility function of real estate is scarcity relative to the available income of those seeking the homes. I mention this relative to an article posted in June 2007 which anticipated a 20% nationwide property decline using this metric.
A home is only worth what people can afford to pay for it. If you can squeeze more people onto a given area of land and create more homes then you can maximize the value of the land such as in Manhattan over the last few decades.
Over time the utility function of real estate is scarcity relative to the available income of those seeking the homes. I mention this relative to an article posted in June 2007 which anticipated a 20% nationwide property decline using this metric.
Tuesday, February 3, 2009
New York area homes lost $130B in value from 2007 to 2008
Sky-high real estate statistics usually don't faze us. A $10 million price tag on a SoHo loft doesn't even raise eyebrows. A dilapidated brownstone in Harlem fetching millions doesn't make us flinch.
But even normally unflappable New Yorkers may be shocked at the latest sky-high real estate number: $130 billion.
Homeowners in the NY metro area lost $130,291,409,688 in home value in 2008, according to Zilliow.com. In the U.S. as a whole, home values dropped about $2 trillion, the study found.
More than half of this $130-billion loss - about $75 billion - came in the fourth quarter, as the Wall Street crisis and other economic woes hit the real estate market - hard, the study found.
But even normally unflappable New Yorkers may be shocked at the latest sky-high real estate number: $130 billion.
Homeowners in the NY metro area lost $130,291,409,688 in home value in 2008, according to Zilliow.com. In the U.S. as a whole, home values dropped about $2 trillion, the study found.
More than half of this $130-billion loss - about $75 billion - came in the fourth quarter, as the Wall Street crisis and other economic woes hit the real estate market - hard, the study found.
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