The luxury real estate market continues to take a beating, despite the positive spin coming from certain quarters and these are a few headlines from around the world.
It looks as though the Barclays Center in Atlantic Yards is back on – although I doubt the planned 6,000-plus luxury condos will be built. And Ratner has left the announcement of the new plans so late that it makes a mockery of the whole process. To obtain the massive tax advantages of being given tax-exempt bond status, construction needs to have started before the end of this year. And with several law suits in the air, plus more likely, I can’t see it somehow.
In June, images of a brick structure resembling an airplane hangar were universally panned. The original design, by the architect Frank Gehry, was scrapped in a cost-cutting measure.
Still, Mr. Ratner must contend with a legal challenge by opponents and a weak real estate market that could undercut plans to build as many as 6,400 apartments at Atlantic Yards. The developer is also working against the clock; as a result of changing regulations, he must start construction by Dec. 31 to qualify for tax-exempt bond status.NY Times
Yet more auctions of luxury real estate are announced. Three luxury homes in Florida go under the hammer September 23rd.
Concierge Auctions will conduct a luxury real estate auction of three luxury properties in the Jacksonville, Florida area on September 23, including a country estate on more than 24 acres of land and a 4,500-square-foot home in the Marsh Landing Country Club in Ponte Vedra, the company announced. Luxury homes auction
According to the Boston Herald, the “Floor falls out of Boston’s luxury condo prices,” which sounds reasonably accurate if a little melodramatic.
The housing slump and the credit crunch continue to take a toll on Boston’s condominium market. “High-worth individuals who are the potential buyers of luxury condos watched as their stock market portfolios were decimated by as much as 40 percent in the last year,” said Michael Albano, broker-owner of Metropolitan Boston Real Estate. “They’re waiting for it to rebound before they pour money into real estate.” Boston herald
The only people I see “pouring money into real estate,” at the moment are the vulture investment funds, and many of them are sitting on the sidelines waiting for the right carcass to pick over.
The Los Angeles Times does a splendid job of showing a complete lack of understanding of the luxury retail market, as they wonder why there has not yet been a recovery in retail spending.
Affluent shoppers are the most important segment of consumer spending, which in turn drives the national economy. The top 20% of the nation’s households — with income of at least $150,000 — account for 40% of all spending, according to government data. That makes them crucial to any turnaround. LA Times
I have two words for the LATimes – Home Equity. As in – there is not a lot around at the moment, and this was the driving force behind the luxury consumption bubble. If I was in the business of selling $400 jeans, I would be looking for a new venture.
Bernie Madoff’s luxury home in the Hamptons is up for sale, along with all his other toys and possessions (except the ones that got away) says the AP.
Soon the world will see whether Madoff’s luxury penthouse apartment — perhaps the only former crime scene featuring four fireplaces, a wraparound terrace and closet space galore — also will hit the jackpot on the Manhattan real estate market. The U.S. Marshals Service plans to put the 4,000-square-foot duplex in a 12-story doorman building on the Upper East Side up for sale this week, betting that exclusivity outweighs notoriety. AP
It will certainly be interesting to see what the real estate sells for, although the case of 1990 Chateau Beychevelle Saint Julien remains missing according to the AP. I am not really sure why this was worth a mention – the stuff is only worth about $100 a bottle and it appears Mr. Madoff had no better taste in wine than he did in choice of profession.
