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Manhattan Apartment Prices Soar To Record On Billionaire Bid
Three weeks ago in “Beef Prices Hit Record: Up 30% In The Past Two Years,” we noted that although the Fed may continue to claim inflation is non-existent, for those Americans who can't afford a house and thus have to rent, inflation is all too real.
The soaring cost of housing is a topic we’ve covered extensively and indeed, as we showed in “America’s Housing Problem: Buying And Renting Are Both Unaffordable,” many Americans face the rather harrowing prospect of not being able to afford a downpayment (even at the token 3% level now allowed by Fannie and Freddie) while facing an inexorable rise in rents, meaning, in WSJ’s words, that many households are “stuck between homes they can’t qualify to purchase and rentals they can’t afford.”
In the latest example of the soaring cost of living in America, Manhattan apartment prices just hit a record, with average sale prices leaping 11% to an astounding $1.87 million in Q2, the highest in the quarter or so century of record keeping.
Bloomberg has more:
The average sale price of all co-ops and condominiums was $1.87 million, up 11 percent from a year earlier and the highest in 26 years of data-keeping, according to a report Wednesday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Resale apartments and units in new developments each set their own price records amid interest from both investors and buyers who intend to live in the homes.
Buyers clamoring to own property in Manhattan found few choices on the market, pushing them into bidding wars, especially for resale apartments. Listings totaled 5,730 at the end of June. While that’s up 1.3 percent from a year earlier, the inventory is still 20 percent below the 10-year average, according to Miller.
Resellers have been hesitant to list their homes because rising prices may leave them unable to trade up, Miller said. At the same time, developers adding new units to the market have focused on building ultra-luxury towers aimed at billionaire investors as a way of recouping their high land costs.
Yes, a boom in “ultra-luxury” units “aimed at billionaires”, a sure sign (not really) of a healthy market and further evidence that thanks to seven years of global QE and ultra-accommodative monetary policy that has served to balloon the assets of the wealthy, the super rich (and perhaps a few oligarchs) are now clamoring for ways to spend it all and once you’ve added to your $100 million home collection and bought a few Picassos at Christie’s, we suppose a luxury unit or two overlooking the New York skyline is just as good a place as any to park a few million. Here’s Bloomberg again:
The owners of a co-op at 360 W. 20th St. sold the property last month for $700,000 more than they were seeking after a bidding war broke out among 14 interested buyers, said Meris Blumstein, the Corcoran Group broker who sold the Chelsea property.
The sellers listed the renovated two-bedroom apartment near the High Line in March for $2.5 million, the lowest they were willing to accept. A month later, the unit, which includes a 650-square-foot (60-square-meter) yard and temperature-controlled wine storage for 240 bottles, went into contract with a buyer who agreed to pay $3.2 million.
Another seller in the neighborhood, Victor Vecchiariello, listed his West 23rd Street condo for $999,000, and attracted several bids at an open house held on a snowy day in March. On the advice of his broker, Scott Harris of Brown Harris Stevens, Vecchiariello held a second open house and ended up selling the 754-square-foot apartment for $1.28 million.
One or two of the bidders “might have said, ‘I’m going to step away,’” said Vecchiariello, a partner in Ernst & Young LLP’s tax division. “But most of them came back. They upped their offers a bit.”
So there you have it America, you are being priced out of homeownership by the bored billionaire crowd thanks in no small part to the lunatics in the Eccles Building who, if asked, will swear that any day now, the fabled "wealth effect" will finally begin to trickle down, and maybe then, you too will be able to afford to purchase a home or, at the very least, scrape together enough to pay rent on your one bedroom apartment which, as we've shown, may currently be a rather monumental task.
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What part of "QE is merely about allowing the 0.1% to offload prior to the next crash" do people not understand?
I concur. The outcome of Central Planning + Manipulated Fiat is either a hyper-inflationary implosion, or letting the invisible hand do it's thing in a deflationary correction.
The bond market will experience havoc at some point because of all this manipulation... When the cost of borrowing rises the correction will commence. Spending will have to come down, but the national debt should still be manageable. The FED owns a third of the debt anyway and they'll likely hold those notes until maturity. As a result of Operation Twist they may be disproportionately on the long end, but I think that actually helps the BS accounting as the interest on those bonds is counted as income to the treasury.
If somehow there can be a stop to the exponential increases in spending debt to GDP could retreat from full retard mode at some point. Especially if RE deflation actually gives consumers some fixed cost relief. Sadly, President Hillary vs GOP Congress may be the best thing we can get as far as keeping spending under control and keeping this whole thing together with duct tape. Clinton vs GOP was the last time we had any spending sanity in Washington.
http://cryptome.org/2015/07/tsipras-eu-15-0630.pdf
They don't ring a bell at the top of the market,
except when they do;)
What else am I gonna do with my pocket change?
Don't you unwashed masses unnerstan nuffin?
latest offer from Greece I could find
http://images.businessweek.com/cms/2015-07-01/BN_070115_9315.pdf
This is actually good news
The "poor man's entrance" will become the "not so poor man's entrance"
They can have every square inch of property in NYC. I never plan to visit the place...ever. Nor do I want to be a landlord in the place. I guess I just don't have that Billionaire mindset.
NYC = biggest f'n shit-hole ever -- the people (in general) are the worst of any place I've visited and it's not even close. Philly is paradise in comparison.
Buyers clamoring to own property
Translation: Fools rushing to put debt millstone round neck
It's all location. Behind my parents' house, in a clean, safe, non-diverse suburb, a 1000-sqft 70-year-old house on 1/4 acre is "under agreement" for $409,000. Whereas I just bought a 1400-sqft doublewide on five acres 80 miles away for a fifth of that price.
No, it's $409,000 because the Fed has done everything to keep prices high: QE1, QE2, QE3, ZIRP, the twist, lowering downpayments at FHA, etc.
Just because a place is in a decent area doesn't mean it should be unaffordable to 90% of the people. According to the traditional standard of affordability, one should make $136,000 per year to afford a $409,000 home. The REIC allows you to borrow more than than that, unlike 25+ years ago, but that is why everyone is up to their eyeballs in debt today.
Don't forget that if you paid $409,000 for that place, you'll spend another $250,000 to tear down that old shack and build something decent.
Few more years and we’ll all be millionaires.
Another absurd fact -- many 401k plans will allow to withdraw funds in order to make a downpayment on your first home, but NOT to amortize your student debt balance. It boggles my mind, especially since it leads to the same ultimate result because the entire purpose of prepaying my student loan balance would be so I can buy a home sooner rather than later. The rules judging these retirement funds are out-dated and do not reflect the realities that many young Americans face today.
And they don't allow you to pay off your mortgage. Think bank lobby has anything to do with these regulations?
Wheeeze, we "Movin on up, to da East Side, To a Deeeelux apartment in the sky"
Damn, and I was planning on moving on up......guess I'll just have to stay in Texas.
In a separate, but equally if not more so important survey it was learned that more than 75% of that $near2 million dollar cost of the housing was paid for in CASH and 100% of the buyers followed this simple method of accumulating the cash to do so:
They Just Bought the Fucking Dip and did again on Monday and now have been able to pay the remaining 25% with some left over for a small Condo on St. Bart's, their transgender operation, and wedding gifts for the destination gay Marriage they will attend on Fire Island.
The surest way to gauyge the top of a market bubble is Manhattan real estate prices. When the locals start shaking their heads (just as they did in 2007), time to run for cover.
Have those HK apartment prices leveled off yet I wonder? Haven't read much in the news except the tensions between Mainlander shoppers dragging huge suitcases around buying everything in sight and locals at the various malls.
'There's never been a better time then now ... to be a foreign Money Launderer."
this articles and stats are full of shit, its all about keeping the illusion of a healthily real estate market for the banks and connected hedges to sell their innovatory to the joe public suckers
try and find a place! it is expensive in London, NYC, Toronto, Vancouver, HK, etc. I have had the "pleasure" of trying to find decent places in these cities. Man, it is hard. Hong Kong is what we might call a slum in other areas, and yet the prices! NYC, London, and Toronto are great by comparison.