Ups and Downs in the Luxury Markets

News from the world of luxury on the approach to Christmas 2008. Some good, some bad, but one thing is clear – 2009 is going to be a turbulent year and we are going to see more volatility.

The Miami Beach Luxury Real Estate Market saw just 7 sales in November above the $1 million mark – 3 of which were short sales. Miami beach luxury real estate. Good news or bad? Me the eternal pessimist; Ines, the writer of the post, the optimist. Lets see what 2009 brings.

The National, an online newspaper in Abu Dhabi, thinks that US Ski towns are riding out the global storm. Article. This is at sharp odds with the issues facing the Tamarack ski resort in Idaho, which is still at a standstill, and likely to rot away if it fails to find a new source of funding soon; and the ongoing saga of the Yellowstone luxury residence club in Montana. Although this one is entertaining reading – the outstanding payments due to creditors have still not been made, but I think we will have to wait until after the new year for any updates.

Bernard Madoff’s little investment scheme seems to be having effects in all sorts of places. Palm Beach is the latest in a long line of losers, and apparently listings jumped over the weekend – mostly from victims of the scheme who have been wiped out. Palm Beach Post. I must admit to having a little trouble understanding the difference between his scheme and just about everything every single bank in the world seems to have been doing for the last few years. Perhaps he is the scapegoat that has been chosen? I mean, some one some where needs to be held accountable for the current banking crisis. He seems a logical choice. It was all Bernard Madoff’s idea. I was only following orders.

Speaking of banks, if you were wondering exactly where the $20 billion of taxpayers money handed over to Citigroup recently went – $8 billion of it went to Dubai, presumably in an effort to shore up the value of Citi’s “assets,” in that country.

In retail, LVMH Moet Hennesy-Louis Vuitton have canceled their plans for a Louis Vuitton flagship store in Tokyo. “Mass luxury,” brands are likely to be hit harder than the genuine luxury market. Much of the sales growth in this area recently was driven by mid-range consumers trading up to luxury after discovering their vast wealth in real estate, and if Wal-Mart’s recent successes are anything to go by, that trend is over for the foreseeable future. Spending on luxury goods in the USA has seen a staggering 34.5% drop in the first week of December from 2007.

It is not all bad news though, and where some are failing, others are seeing opportunities. Sotheby’s International Realty are being particularly agrressive, opening the first Sotheby’s International Realty in Vietnam this month. A rare diamond sold for a record $24.3 million in a London auction. Giorgio Armani started work on the Georgio Armani Hotel in Milano, and work began on the Manzano Golf Resort in Grand Cayman.