You know that everything starts to get noisy when even a multi-million dollar penthouse in Manhattan cannot sell.
He sees the developer in SoHo, having recently completed the main construction of his high-rise condo tower, he realized that the project’s focal point is a penthouse of 45 million square meters. Feet - just a little.
"The air is very thin in this pool of the buyer," - said builder Kevin Maloney. Bloomberg ,
You will love the Solomon-esque solution that Maloney came up with.
The penthouse has a surprisingly grand name: the SoHo Summit.
Of course, he has his own indoor pool. And yes, it has 23-foot living room ceilings. In addition, he has not one, but two private elevators. One goes to the lobby; the other one means that you don’t need to go upstairs to the upper levels of the penthouse (for entertainment, spa and rooftop kitchen and grill).
But the stock market suffered a lot at the beginning of the year, and the S & P 500 fell by 11% at its lowest point in 2016, and the Hang Seng in Hong Kong fell by about 17%. In recent months, Chinese property buyers have abandoned the endangered act by real estate offices throughout the United States. And after several years of ultra-low interest rates and easy credit policies, there are now an excessive amount of iconic luxury accommodations on Manhattan Island,
Developer Solution? Change the expansive space of his project into two small penthouses - a block worth $ 11 million and 3,000 square feet (although in this size it hardly seems big enough for one set of individual suits) and secondly, 5,400 square feet of unit for a relatively cheap 29 , $ 5 million.
I will follow him and tell you whether it is for sale or not.
Red Hot Real Estate No More
These days even the rating agencies on bonds, ever late causing twists in any market, jump on board ...
Last month, Fitch Ratings noted that housing prices in San Francisco "have risen to an unbearable level of income in the area." According to Fitch, this makes the local market overpriced by about 16%, which probably means that you need to double this figure to appreciate the true “fair value” for this once-luxurious luxury market.
Only in the last few days, the National Association of Realtors has noted a weakening of demand among foreign buyers, blaming a strong dollar and rising home prices in the United States for pushing American real estate beyond the reach of accessibility, even for wealthy foreigners.
The collapse of the Chinese stock index Shanghai Composite (almost 22% only from the beginning of 2016 with the first refusal) forced many of the country's rich elites to return their purchases to the property. You can see the impact in regional news headlines around the country:
In San Francisco: "At the high end, the SF housing market is finally cooling off."
Of Boston globe : “The elite residential market is cooling.”
In Fort Lauderdale: "The South Florida Condominium is cooling off."
Will it be worse for premium real estate? I think we are still in early handouts.
War with Uncle Sam (property buyers)
In January, the story did not receive a lot of media, but when the US Treasury Department and its Financial Crimes Enforcement Network (FinCEN) announced the release of "Orientational Geographic Orders" for New York and Miami.
“GTOs,” according to a FinCEN press release, require “certain US insurance companies to identify individuals by companies based on companies used to pay all cash for elite residential real estate.”
In principle, people in the Treasury are concerned about whether corrupt foreign officials or “transnational criminals” can launder piles of dirty money through these multimillion-dollar real estate purchases.
Or is Uncle Sam just worried about the flow of Chinese money into the American real estate market? "All cash" is in fact synonymous with wealthy Chinese property buyers.
At least that was the case. As we saw in the “cooling” headlines across the country, the absence of this class of homebuyer is starting to be felt in markets across the country.
Article in New York Times Late last year really brings the influence of Chinese property buyers to the center of attention. When it comes to buying a home in America, they pay an average price of $ 831,000 — almost double the international buyers from India ($ 460,000), the UK ($ 455,000) and Canada ($ 380,000) pay for their homes in the US
In the coming quarters, I believe that FinCEN's “Orienteering Orders” most likely signify an end to the enthusiasm for speculation in the market among Chinese buyers. Government actions can only be limited to New York and Miami, but everywhere it will have a strong cooling effect. In the end, only he wants another press release from FinCEN to announce the expansion in other American cities of his investigations into the identity of these large and anonymous cash buyers.
The trend will take time when data is flocked to economists. spreadsheets. But as Chinese elites continue to retreat from American real estate, well, get ready for the moment of “Wile E. Coyote” at luxury prices for luxury homes — and more pressure on the Federal Reserve to cancel their interest rate status.
