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Manhattan Luxury-Home Prices Drop For 8th Straight Month Amid "Glut In Overpriced Apartments"
The poor are getting poorer but the rich, it appears, are no longer getting richer. With apartment vacancies at 9-month highs, Bloomberg reports that Manhattan's luxury-home market is rapidly losing its luster. Prices have been dropping every month since February, when they reached their highest point on record, and, as one analyst notes, "the downward trend in that decline hasn’t abated, and we haven’t seen it wavering in any way."
The vacancy rate in November was 2.87 percent, up from 2.31 percent a year earlier and the highest since August 2006, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Landlords eager to fill empty units lured tenants with the most concessions since 2011.
The rise in vacancies suggests tenants are reaching the upper limits of what they’re able to pay after more than four years of almost continuous rent growth, according to Jonathan Miller, president of Miller Samuel. In November, the median monthly apartment rent climbed 3.9 percent from a year earlier to $3,361. Leasing costs have jumped more than 18 percent since the end of the recession in June 2009.
“We’re reaching the point where things can’t go up as much,” Miller said in an interview. “The economics don’t make much sense anymore.”
...
“The conditions that are driving rents higher haven’t changed,” Miller said. “What’s changed is the acceptance of it, the affordability of it.”
The luxury-apartment market, the top 10 percent of all rentals by price, was the only category with a decline in prices. The median rent in November fell 1.4 percent to $8,537.
“Complaining about high rents in Manhattan is nothing new, but now it’s becoming more visceral to tenants,” said Miller, who’s been tracking the apartment market since 1991.
“We’re hitting the point where affordability is really becoming a much bigger issue than it has been in the past.”
And now luxury home prices are falling...
Prices for luxury homes are moving in the opposite direction from the broader Manhattan market, where values are still rising and discounts are few. New York’s high-end inventory has ballooned in recent years as developers focused on building large and lavish units in an appeal to wealthy investors, who now appear to be more hesitant to buy. Listings for more moderately priced homes, meanwhile, haven’t been replenished because the high cost of land makes building in that range unprofitable, and owners are reluctant to sell because they can’t afford to trade up.
The result is a pool of listings that’s light on the properties that more people want to buy, Lightfeldt said. In the third quarter, the supply of homes for sale in the top fifth of the the market rose more than in any other segment, jumping 8.9 percent to 4,055 units, according to StreetEasy. For the other four levels combined, listings declined more than 3 percent.
The Federal Reserve, in its December Beige Book of regional economic conditions, noted the same bifurcation in the New York market, citing a “supply glut” of high-end homes and slackening buyer demand for them. The top price tier was also the only one in which sellers as a group didn’t get their full asking price in the third quarter, StreetEasy data show.
“Every asset has a threshold in pricing and once you push past it, you’re going to see the buyers resist,” said Donna Olshan, president of Olshan Realty Inc. and author of a weekly newsletter on the New York luxury market.
Olshan, who defines luxury as units listed for at least $4 million, described having had four good sales weeks out of the past four months, with prospective buyers choosing to pause rather than submit to ever higher prices.
“We have a lot of overpriced apartments on the market and that’s the reason for a slowdown,” said Olshan, who said she believes the market has plateaued rather than peaked.
“Tremendous overpricing means that marketing periods are longer, and the people who are overpriced are going to have to correct.”
The luxury market “has been over-served and the demand seems to be fully satiated,” said Lightfeldt of StreetEasy.
The firm’s price index is based on a representative sampling of resales in a given month, which are compared to their previous sales prices.
Demand for the most-expensive homes has also been dimmed by the weakening of the euro against the U.S. dollar, gyrations in the Chinese stock market and a losing year for hedge funds, Olshan said.
“You take all of those factors and you sprinkle them onto a real estate market that was overpriced to begin with, and you’re going to feel it,” she said.
* * *
So what market's property bubble explodes next?
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guess lots of people had more than a few bucks tied up in Chipolte stock and now can't bankroll a few extra luxuries
Manhattan Luxury-Home Prices Drop Amid Government Policy Seeking to Keep the USD Low For 8th Straight Month Amid "Derth of Overpriced Chinese Asset Floaters"
I like bubbles, they are fun. My kid says. Could not agree more.
But you can go out to nice restaurants and take pictures of your food!
Wait till the Chinese start dumping their overpriced houses on Fleabay.
Only thing is they're probably fake since many of the sellers on FleaBay are fakers.
Overpriced is Obongo's middle name.
Obongo? Really? I assume you mean Obama? And just what the fuck does he have to do with any of this you stupid fuck? And if he (Obama) was even capable of intervening what would you say? You'd say he was a communist/socialist/interventionist in a "free market" of whatever price "the market" will support.
Cheer on the Shkrelis et al
In any case you are the problem. "Obama" is the least of your worries. How old are you? 23? Good luck. Please don't have any children.
Besides, it's spelled Obomba.
Are you referring to Hussein Soweto?
I believe so, the same creature that was able to travel to american banned indonesia back in the 70' on an 'American' passport, has a Connetticut social security number, and went by the the name of Barry Husseint Sotoro Obama.
IMO every law this manchurian president has signed is void.
The Chinese won't dump. It's just that simple. They will not dump.
They may not dump but they sure do spit.
I'm guessing the 20 people who own the world have all the luxury residences they can use.
The 'holidays' are always a good time to contemplate a trip to meet God! Go real estaters.
All bubbles pop. And bubbles popping sooner rather than later is better. Pop away.
"All bubbles pop. And bubbles popping sooner rather than later is better. Pop away."
"I'm Forever Blowing Bubbles"... Vera Lynn
https://www.youtube.com/watch?v=0qTqm42bCW4
The thing is my dear, it's not just the bubbles. It's the worst sort of neglect and short-sightedness in the face of inevitability. Huge cities have huge needs and unless you want to spend 50% of your life in your car going to and from work... well you see the problem. Californians seem to love it. Do they really? I doubt it. Huge cities need to be organized in able to operate and the USA is doing a fucking piss poor job - along with Mexico City and all the other huge cities of Central and South America. USA is as crap poor in planning as any of its southern neighbours. Bubbles come and go but the huge mega cities will just keep on growing. Count on it. Plan for it. Quit pretending everyone can drive to work, quit pretending there are parking spaces for the millions.
Tiny bubbles
They may be farts but they aren't tiny.
a+_jack-off, don't mess the olde' pharte.
I agree, but it's the other output that turns everything to shit.
Really rich people are now avoiding the housing dregs of New York, Boston, and Chicago. What's not to like?
"Really rich people are now avoiding the housing dregs of New York, Boston, and Chicago. What's not to like?"
Thank you M. Schmilkies! That is exactly correct!
The problem remains: where is the affordable housing in these cities for the people who who provide all of the services (ie the working class), and there are a lot of them, and they are utterly indispensable. Without them these cities cannot operate, and without affordable mass transportation these cities will be utterly choked, strangled with car, bus and truck pollution. Let's just see where all this will lead us to. The rich and ultra rich breath the same air, as will their children.
Section 8 in Brooklyn, Harlem, NJ, or the Bronx
New York, Philadelphia, Boston, and Washington all have mass transportation. You can live in any of these cities without owning a car. I have done this, and many others also. You don't even need a car to get to most locations outside of the city center area, because they have commuter trains and buses.
If you drive in these cities, there is parking available, but you have to pay for it. It is an option if you want it. These cities are not "choked with traffic," certainly not compared to Tokyo for example. After visiting Tokyo, Boston seems rather deserted.
In SF, even if I had a car, which I don't because I am blind, it is cheaper and more convenient to leave the car in the garage and get an Uber or Lyft. Shared rides on Lyft line are only six bucks for all of the city north of Army Street and East of Presidio. I have taken Lyft forays little as twenty bucks to SFO.
Typical wait times are one minute to match and three minutes for arrival. Getting out of the parking lot would take longer.
Match it with Bart and the whole Bay Area makes a private car redundant, unless your driving for Uber. City Share cars can make up the times when one really wants a car.
I live near civic center, and they have been hammering away at the old AAA parking lot for months.The old triple A HQ is being converted to a very large apartment building.
The parking just is not needed.
The free shit army and those who hold down jobs that require an IQ of no more than 70 get to live near the city with awesome public transport - Newark, NJ, The Bronx, Jersey City and other shitholes. JC has some nice areas yes but still, most of it is a shithole. The biggest dumbfucks are not the free shit army and the IQ 70s but the idiots that still kill themselves every day to stay in what passes for a middle class. Why? Because unlike the IQ70s, they don't have to just commute to their jobs, but no, on top of it all, they have to spend an extra half hour every day crossing one of those shitholes. Nothing like riding NJ transit through Newark, looking at rotting and decaying buildings and crime infested shit everywhere. No signs "If you lived here, you'd be home by now" because nobody wants to live there and since the IQ70s that live there can't read anyway. If you live in CT, you get to enjoy your ride through the Bronx and Harlem every fucking morning and every fucking night - what a waste of time and how fucking depressing. And the illiterate free shit army, whores and pimps that live there? They're a 20 minute subway ride away from Manhattan and other places they'll never go. I'll figure this shit out one day.
Take this post with a HUGE dose of </sarcasm>
Bunkers for Sale
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BTW- I'm still short gold from $1080. lmfao
I'll gladly, send a screenshot." In fact", I'm SHORT gold from [twenty cents] under 1080. I even have sell orders above to cover my R/R.
I think gold is going to get slammed down in '16 January, and I'll take my booked "ponzi" paper 300:1 ratio profits and stack MOAR physical.
Fuck the bunkers.
AJAX = Toilet Bowl Cleaner
lets play
"Stronger than dirt!"
https://www.youtube.com/watch?v=3-fni9oDjeY
only bunker I ever liked was Archie Bunker
www.ViewLasVegasRealEstate.com
Hope it gets slammed down, then the rest of us can get some more. Keep stacking mofos.
When the collective buttfucking starts, good luck trying to log into your accounts. No internet will make your computer as useful as a fucking Fisher Price toy. Stack metal and pray you'll never need it.
Hope you're right about that.
Great,
if this trend continues for another 100 years or so,
luxury Manhattan real estate can then be in my price range.
This quote from the article: "The economics don’t make much sense anymore.” is simply pure comic gold.
Apparently, that person has not been out in the real world very much, or paid attention to their surroundings.
@scintillator9 Damn right!!
Try Switzerland. Try to rent any sort of flat here in any part of the country 'near work'. There is no buying here, only renting by the way. The only saving grace is a decent but overly expensive train system that will save you from a hideous car commute.
WTF
Reality show of government leeches
https://www.youtube.com/watch?v=GqvsF2bBu4oof the
I am seeing San Francisco rental prices going down, no takers even though the inventory is so low due to airbnb, billionaire chinese parking money and keeping building empty, ellis act evictions they can't rent out for 5 yrs, rich buying in the "fortress" and living in multi unit alone.
Tech will move to cheaper rent. Who wants to pay 60K per year to rent a shitty apartment, and first you have to make that 60K and pay taxes on it, which turns out to be 100K.
SF will boom/bust as it always has in it's history.
The cure for high prices is high prices
What was the awakening for ajax? I know, but , I'm going to use it later...
I went to Santa Monica promenade and boy. Looks like Asia, Latin America and Africa have taken over the real estate in SoCal. The whites here are now the minority group.
Love to all people, but I have the feeling that US is anti-whites immigration, it has been like that for at least two decades.
White single moms with no job and money cannot get help because they are not "minority" moms. Go figure the equal rights by constitution.
At least they're still white moms, you know with an IQ above 80. That counts for something.
Take solace in this: When shit hits the fan, the free shit army will have its obesity problem solved because they won't be able to raid the Entenmann's display case anymore. And they can use their disconnected IPhones as fucking ping pong paddles.
Just great. If things weren't bad enough. Now I have to share my 800 sq. feet with one of these dickheads.
It's beginning to sound a lot like Christmas
Probably sounds better when you sing it.
It also sounds a lot like DEFLATION kicking in.
Still waiting for the rents to start dropping on this side of the river... On the bright side, "Million Dollar Listing" should start to get interesting.
Great! 350 more months and a it may become affordable to non filthy rich people again. Hooray!
JUMP You motherphuckers !
No big deal. Happens all the time. Big demand for some type units and a number of developers jump in and together overbuild. Ofice space, apartments, residednes. Happens all the time.