A few days ago, when we looked [5]at what is one of the last tax havens in the world, the principality of Monaco, we uncovered not only the world's most expensive Penthouse costing a whopping $400 million, but got some perspective on how far one's dollar really goes, or doesn't. Because when it comes to asset inflation there is a world for the "rest of us", where according to Janet Yellen "inflation is noisy" and any spikes should be ignored, and one for the 1%, where inflation is essentially off the charts. In fact, a world where as the following anecdote fiat prices hardly matter.
Case in point: if a billionaire has a measly $1 million burning a hole in their pocket, they have a choice: they can spend it in Monaco where, "for $1 million, you could buy about 15 square meters (160 square feet) of space" or they can spend it in Wall Street's favorite summer retreat, the Hamptons, where the seven figure number would buy them... a trailer.
[6]
As the NYT [7]reports, via Gothamist [8], a family just sold their trailer in Montauk for a million dollars.
The transformation of the whole of the east end of Long Island into a 1% paradise is something remarkable. The Times traces how just a few years ago Montauk was still something of a well-off worker's paradise, replete with drunken firemen and cheap crash pads. But now even Jimmy Buffett has been unsuccessful in purchasing a trailer in Montauk Shores, which sits at the very edge of Long Island.
“It was the Wild West back then,” Cherie Doughan, one of the former trailer owners, told the Times. “Or I guess you’d call it the Wild East. People sure knew how to party.”
Doughan recalls her father sitting in a bathtub in their front yard, beer in hand, inviting passersby to join him for a dip.
“I hate to sell it. I don’t want to sell it, I just don’t, but there it is,” Doughan said, explaining that they need the money to help pay for her mother's assisted living home.
Of course it is not the motor home itself that is being acquired, it is the land beneath it:
With dark wood paneling, two stuffy bedrooms and an intact 1970s kitchen, the Doughans’ mobile home will almost certainly be replaced. The new owners will be basically buying the land, paying more than 100 times what Mr. Doughan did, for one of the primest parcels in Montauk Shores.
It may not be one of the plots directly on the bluff over Ditch Plains, but it is on a larger, 2,000-square-foot lot, with room for a double-wide mobile home and a new deck, a luxury the narrower waterfront parcels, each 1,200 square feet, do not enjoy. The added space can mean a lot to someone willing to pay seven figures for a beach retreat. And the Doughans’ plot still has unobstructed ocean views, out over a plaza in the center of the park.
So $1.1 million for a 2,000 square foot lot? "Insanity", most people will interject here: this is such a clear signal there is an epic bubble that the only question is when does it burst. Well, sure. But others are trying to spin even this:
While residents insist the general vibe of the mobile home park hasn't changed, the idea of someone who could afford a $1.1 million dollar parcel of land on which to build a new trailer seems to negate the vibe of a blue collar paradise. Not so, according to the Corcoran real estate agent quoted in the piece: “If you think about it, it’s still one of the best deals on the East End,”
And now, for all those who wish to be able to afford such "best deals" in the future, back to BTFATH.
