With the $147M sale in East Hampton, NY, it has been a busy couple of weeks for the .0000000000000000001% of the home buying public in the US. With the 3rd US home sale to close above $100M in 2014, it has left many thinking – why isn’t NYC in the fray?
After all, NYC arguably legitimized the US “trophy sale” frenzy a few years ago when Sandy Weill sold his penthouse at 15 Central Park West to a Russian oligarch for double what he paid for it. I’ve argued that this $88M sale was the launchpad for the new trophy market in NYC even though the transaction appears to be a divorce strategy. After that sale closed, the subsequent trifecta of trophy sales back then seems relatively affordable now.
As journalists tell me…three data points make a trend.
2014 US Sales over $100M
$147,000,000 Further Lane, East Hampton, NY
$120,000,000 Copper Beech Farm, Greenwich, CT
$102,000,000 The Fleur de Lys, Los Angles, CA
So is the era of US $100M+ sales a trend?
Yes, although it is probably more accurate to call it a “phenomenon” than a trend.
In NYC? Eventually.
To a few real estate brokers I engaged with on this topic, the idea that NYC would see the $100m threshold broken in 2014 seemed inevitable, only because of this 2014 US trifecta. It is the belief that we are experiencing a momentum swing over the $100m threshold because 3 sales by May, compared to a sale a year means a shift.
Meh. I view this phenomenon as “product-specific” and not “location-specific.” There is a randomness to the locations where these sales occur. However I do believe the probability is high that NYC will see such a sale in the not too distant future.
Then again, does it really matter? Do these $100M+ sales have anything to do with the remainder of the US housing market? No they don’t. But it’s fun to talk about.
The Manhattan $1M Average Sales Price Threshold broken in 2007
I remember when the Manhattan $1M average sales price threshold was broken in 2007, foreign media went gaga, struggling to find a deeper meaning to housing. There wasn’t. I always viewed it as simply a number on the spectrum.
Definitive proof that I have “hipster” tendencies – my never ending search for irony.
Yesterday’s announcement of the 3rd US $100m+ sale was one of record breaking irony: the announcement of NYC mayor’s 10-year plan to create 200k affordable housing units. The need for affordable housing – low and middle income – has always challenged NYC. The mayor’s affordable housing plan “moon shot” as the New York Times has described it came out on the same day as the $147M East Hampton sale story broke. Irony.
Tags: trifecta, US, East Hamptons, Los Angeles, Greenwich CT, Mayor Bill de Blasio
[…] The view of some RE agents on this subject of plus-$100MM NYC residential sales: ‘the idea that NYC would see the $100m threshold broken in 2014 seemed inevitable, only because of this 2014 US trifecta. It is the belief that we are experiencing a momentum swing over the $100m threshold because 3 sales by May, compared to a sale a year means a shift.’ (Source) […]
The run up here in US is basically due to heavy investment by foreigners in the housing market. Some 60 Bil was invested during 2012-2013 time period and the lack of new construction has added fuel to this. Inventory is low and until sellers step up the prices are going to go up. This report by the Association of Realtor suggest a move into the luxury market also: http://www.marinhomelistings.com/blog?post=SURVEY-FINDS-13-PERCENT-OF-CONSUMERS-READY-TO-BUY-A-LUXURY-HOME&xid=040600-02