Thursday, September 08, 2005

The Extra High End in NYC

This article from The Economist describes the ultra luxury real estate market in New York City. Given the sharp increase in NYC condo and co-op prices it's not hard to imagine that real estate in the suburbs, including the Jersey Shore, would also experience sharp gains. I'm sure that plenty of people with cash to throw around have been buying in both places. Also, anyone that bought a reasonably priced two bedroom condo in NYC in the 90's probably could take profits and buy a much larger single family place in Jersey, and would want to, especially if they have kids.

[Ms Lenz credits the current boom to a mood swing among the rich after the attacks on the World Trade Centre four years ago this week. The market sagged briefly along with the rest of the local economy, she says, but then came roaring back, especially at the top end, when people with money decided that they should enjoy life while it lasted, and that if New York could survive 9/11, it could survive anything.

Another big change in the market, says Ms Lenz, has been the arrival of the “hedge-fund guys”. Fifteen years ago she was selling to doctors and lawyers as well as bankers, most of them wanting an eight-room apartment for life somewhere on the Upper East Side. Now, along with international investors and a few celebrities, her biggest customers are hedge-fund managers and other Wall Street lions who expect to change properties after two or three years like other people change cars. She tells of one hedge-fund manager, 33 years old, who bought a $24m apartment in an hour, explaining that he had “just bought a $19m painting at Christie's, and he was not going to put it up on a $2m wall”. The potential buyers for the Park Avenue penthouse include another “hedge-fund guy” she says, and a “royal-family-type person”.]


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