Matrix Blog


[Video] China’s investors and the safe haven of American real estate

August 31, 2015 | 4:10 pm | yahoo!financelogo | TV, Videos |

Here’s a summary of potential future actions by Chinese investors with the recent spate of volatility in the financial markets.

According to Jonathan Miller, president of appraisal firm Miller Samuel, the tumult in China may lead to even more money finding its way into American residential and commercial real estate. “There are not a lot of investment vehicles in China,” said Miller. “You have the [Chinese] housing market, which is a pretty significant bubble. You have thousands of ghost cities that have been constructed. On top of that, you have a pretty volatile stock market situation. So there is some speculation that there actually will be outflow as a result of this and maybe that will end up in the U.S.” Costello concurs with Miller, noting that China’s insurance companies have been allowed by their regulators to invest in foreign real estate only since 2012. “Unless and until they have to cover losses at home, they’re not going to sell these properties,” said Costello. “They’re going to hold them for the long term.”

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Will London (or any large city) Become a Bad Version of Dubai?

July 15, 2015 | 2:24 pm |

Dubaization Defined.

This video is an epic condemnation of the new wave of architecture associated with super luxury housing that is redefining the London skyline presented by – The Guardian.

Alain de Botton goes full on, providing heavy criticism that is well worth watching for the answer to the question: Why we are seeing the super luxury/starchitect phenomenon occur?

But the rest of the piece slips into full scale whining.

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[Video] Fox Business Risk & Reward w/Deirdre Bolton 7-2-2015

July 5, 2015 | 8:53 pm | foxbusiness | TV, Videos |

Samantha DeBianchi of Million Dollar Listing Miami and I joined with Deirdre Bolton to speak about foreign buyers and a little Grexit (but what does anyone really understand about that?). Touched on record setting Manhattan housing prices as well.

And waiting in the green room ended up more like a party.


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Bloomberg View Column: Invest in a Painting, Not a Condo

May 4, 2015 | 11:00 am | BloombergViewlogoGray | Charts |


Read my latest Bloomberg View column Invest in a Painting, Not a Condo.

bvasset chart

Here’s an excerpt…

A couple of weeks ago, Laurence Fink, the chief executive officer of BlackRock Inc., observed that “the two greatest stores of wealth internationally today is contemporary art … and apartments in Manhattan, apartments in Vancouver, in London”…

[read more]

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[VIDEO] Chinese Housing Bubble Version of ‘The Truman Show’

April 29, 2015 | 9:31 am | nytlogo | TV, Videos |

To keep the sales going, developers in the massively bloated Chinese housing market are getting more creative. This NY Times short documentary is fantastic and surreal. I’d chalk it up to simply bizarre, if there wasn’t such a desperate undertone to it.

It reminded me of “The Truman Show” movie where everything Jim Carrey’s character saw was fake, made for him. However in the Chinese version, everyone knows it’s fake but embraces it.

With the massive oversupply, no wonder savvy Chinese investors are extracting as much wealth as they can and investing overseas in anticipation of that day of reckoning.

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Good and Bad Super-Luxury Condo Buyers Love the LLC

February 9, 2015 | 9:46 am | nytlogo | Favorites |


One of the great ironies of modern residential real estate has been the expansion in transparency of information, along with greater secrecy of ownership. I think the latter coincides with the much greater wealth that is being put into hard assets like real estate. Privacy and security are indeed very important to many, including the wealthy and especially those near the top of the financial pyramid. There is nothing sinister or unseemly about the desire for privacy. The use of limited liability corporations (LLCs) has been a legal vehicle (and a gift) from lawmakers who created it that allows people to keep certain transactions hidden from view. However the LLC also provides an opportunity for bad actors to shelter their often ill-gotten assets too.

Louise Story and Stephanie Saul of The New York Times have explored this in “Towers of Secrecy: Stream of Foreign Wealth Flows to Elite New York Real Estate,” an epic data visualization along the lines of “Snow Fall: The Avalanche at Tunnel Creek” This article is a must read covering the hypersensitive subject of high end real estate and privacy.

The ongoing debate about the dying middle class versus the booming fortunes of the wealthy, the lack of affordable housing versus the super-luxury residential tower boom and municipal governments grappling to keep construction and development moving forward to keep tax revenue flows coming in, have made this effort long overdue.

Towers of Secrecy” is careful not to stereotype users of LLCs in high end real estate transactions as exclusively foreign buyers. Within the Manhattan market, foreign buyers are not the majority of overall high-end real estate purchasers. However they tend to be concentrated around the Midtown central business district (aka ‘Billionaires’ Row’) whereas domestic purchasers tend to favor markets found to the north and south of Midtown.

UPDATE There’s a great recap over on Curbed NY too:
Scandal-Plagued Foreigners Park Millions in Midtown Condos

Here are a few screenshots of the embedded videos within the “Towers of Secrecy” piece.


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Bloomberg View Column: Housing Market Blows Hot and Cold

February 8, 2015 | 5:32 pm | BloombergViewlogoGray | Charts |


Read my latest Bloomberg View column Housing Market Blows Hot and Cold.


Please join the conversation over at Bloomberg View. Here’s an excerpt…

The northern third of the U.S. is locked in a straitjacket of snow, ice and bleak weather better suited to staying at home than going out and hunting for a new one. I can almost hear it now: Remember how awful last year’s polar vortex was for the fledgling housing-market recovery?…

[read more]

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VIDEO: Fox Business Risk & Reward w/ Deirdre Bolton 2-18-15

February 2, 2015 | 8:00 pm | foxbusiness | TV, Videos |

Always a pleasure to join Deirdre Bolton and talk housing.

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Top 100 Cities Worldwide: Most New Residential Buildings

January 22, 2015 | 12:00 pm |

Here’s a companion table to my Bloomberg View column published today: Living the High Life. The volume of tall buildings recently completed or under development is staggering. Within the list are generally mixed use but have some element of residential included (i.e. rentals or condos) The data was tabulated in stunning detail at the Council on Tall Buildings and Urban Habitat’s. Skyscraper Center.


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North America Leads Luxury Housing Trends in 2Q14 – Knight Frank

July 30, 2014 | 12:34 pm | delogo |


Knight Frank published their quarterly Prime Global Cities Index today and North America led the way as a region with a 14.5% rise in prices. “Prime” translates to “Luxury” in US housingspeak. We provide research for their Manhattan and Miami results through the Elliman Reports we prepare.

The report conclusion succinctly summarizes the state of high end housing today and speaks to the global phenomenon:

…the index’s annual increase of 6.2% in the year to June is above the long-run average of 4.6% recorded since Lehman’s collapse in the third quarter of 2008, underlining the extent to which prime property has become a favoured asset class globally.

Here’s the table…

[click on table to open report]

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[London Calling] ‘Mike Mulligan and his Steam Shovel’ New Development Edition

June 9, 2014 | 10:41 am |


I read Mike Mulligan and his Steam Shovel nearly every night to my 4 sons when they were younger (probably an unnecessary qualifier). It was also my favorite children’s book as a kid.

As it turns out, this story preempted current London construction methodology (h/t

So, many of the squares of the capital’s super-prime real estate, from Belgravia and Chelsea to Mayfair and Notting Hill, have been reconfigured house by house. Given that London’s strict planning rules restrict building upwards, digging downwards has been the solution for owners who want to expand their property’s square-footage.


This trend reflects the appraisal concept of highest and best use for the equipment despite the inherent wastefulness. Does it make sense to leave the equipment in the basement? With all the concern in the US about below grade empty oil tanks and the environment, I wonder how this practice is allowed, cost effectiveness aside.

Given the exceptional profits of London property development, why bother with the expense and hassle of retrieving a used digger – worth only £5,000 or £6,000 – from the back of a house that would soon be sold for several million? The time and money expended on rescuing a digger were better spent moving on to the next big deal.

You really need to read the book.

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Contrary To Popular Belief, The World Has Manhattan All Wrong

May 18, 2014 | 11:00 am |

[Source: Time-Life]

Today, when I speak to friends and relatives in other parts of country, I find a consistency in the image Manhattan currently conveys and it’s completely skewed. Here’s a little background.

1985 to 1995 [Wild West] I moved to Manhattan in 1985 and it was perceived by outsiders as a very dangerous place. “Manhattan-bashing” was in vogue. My relatives in the Midwest saw Manhattan as a place where tourists were getting mugged and stabbed in broad daylight (It didn’t help that my father was mugged twice in Midtown outside of our office in broad daylight on a weekday). They feared for our lives.

1996 to 2000 [Dot Com Boom] Manhattan now had “Silicon Alley” as well as NASDAQ – which was soaring. Midwesterners were caught up in the stock market frenzy as evidence by conversations of trades of Microsoft and Caterpillar stock over potato salad and cheeseburgers and bottles of Faygo.

2001 to 2008 [9/11 to Development Boom to Lehman] The 9/11 tragedy struck New Yorkers hard but the subsequent rise of NYC from the ashes into an eventual new development housing boom was simply amazing. The Manhattan housing boom peaked in 2008, two years after the US housing market had peaked. This period ended with the collapse of Lehman Brothers and access to credit worldwide immediately evaporated.

2009 to 2010 [Collapse and Rebound] There was a surprisingly rapid improvement in the regional economy in the year following Lehman’s collapse and housing rebounded faster than expected.

2011 to 2014 [Playground of Wealthy Foreigners] Manhattan and Brooklyn become a favorite safe haven for international investors to park their money in real estate.

But now we stuck with a Manhattan housing market exaggerated stereotype (represents 90% of media coverage) in 2014:

  • Most sales are all-cash transactions.
  • Most purchasers are made by foreign buyers.
  • Most sales are millions of dollars (i.e. $5M and up).

When in fact, the 2014 Manhattan housing market reality is:

  • 45% of sales are all-cash transactions.
  • Foreign buyers are a small part of the market – i.e. 60% of all sales are co-ops and foreigners don’t purchase them.
  • More than half of all sales are below $1M (i.e. $5M+ is way up in the top 5%).

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