Matrix Blog

Luxury, Super, Ultra, Mega

Aspen Sales “Nosedive” as U.S. Luxury Market Returns to Sea Level

August 16, 2016 | 3:40 pm | delogo | Charts |

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When compared to the rest of the U.S. housing market, Aspen Colorado is a really a niche luxury market with an overall median sales price of $1,407,500 in the second quarter of 2016. This was 27% higher than Manhattan in New York City – with a current condo reportedly under contract for around $250 million – whose market-wide median sales price was $1,108,500 in the same period.

I saw a Denver Post article in my twitter feed yesterday that had an SEO friendly headline: Aspen real estate in a first-ever sustained nosedive and a subtitle: Brokers struggling to explain sudden, precipitous drop in luxury real estate market.

Some noteworthy superlatives used in the article were:

  • nosedive
  • precipitous
  • sudden
  • evaporating
  • boogeyman
  • jaw-dropping

If you use the article’s June year to date residential sales volume for the entire county, it is clear that 2015 was an outlier. However because most real estate brokers on commission tend to look at the market in the short run, there was an expectation that the sales trend from 2014 to 2015 would continue into 2016. Because of the uncertainty described in the article, Aspen buyers – who are by definition “luxury” buyers – are clearly pulling back (and in many U.S. luxury markets).

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I author a market report that covers Aspen for Douglas Elliman’s market report series, which I began writing in 194. The year over year drop in Aspen 2Q16 sales was 52.5%. Here is the breakdown of sales at the high end:

2q16aspen-$10M

Based on the behavior of the luxury market in high end enclaves like Manhattan, The Hamptons, Greenwich, Miami and Los Angeles that are also covered in our report series, the prevailing pattern for housing remains “soft at the top” and it looks like Aspen is no exception. The impact of the 2012 on Aspen sales didn’t seem as pronounced as this year if you believe that is a significant cause. However my theory is that the heavy luxury volume of the prior year (2015) may have poached demand from 2016, exacerbated by the 2016 election and other items of uncertainty like Brexit, the U.S. economy and the financial markets.

Think snow.

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Tracking the Flock of (Ultrawealthy) Seagulls

March 6, 2016 | 10:02 am | nytlogo |

There has been voluminous discussion in recent years about following and marketing to the high end of the demographic scale, especial the real estate market. It’s been the focus of much of the new housing development action of the past five years, especially in big U.S. coastal cities. The high end development market has been widely chronicled here and within my weekly Housing Notes newsletter.

For buyers in the super luxury housing market, owning multiple homes is less about a primary residence with a second home and more about owning “stops on the big circuit.”

And as the rich own a greater share of real estate, major cities like New York, Los Angeles and London are going through a kind of “resortification,” familiar to posh beach towns or ski resorts, as their populations become more seasonal.

For Manhattan, these birds are rare in February and squawking on all treetops (bad pun for super tall condo penthouses) at full capacity in June.

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And no, I never liked that band.

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Bloomberg TV’s Surveillance on 12-31-2015

December 31, 2015 | 8:00 pm |

On the last day of 2015 I was invited to guest host for the 6am hour on Bloomberg TV’s Surveillance with Mike McKee, Vonnie Quinn & Erik Schatzker. I was paired with Michael Holland, Chairman at Holland & Co. I’ve never met him before but really enjoyed his insights on the stock market.

The first segment was largely stock market talk which was out of my bailiwick but in the second segment I got to articulate my views on the New York City super luxury market. Today’s Max Frankel New York Times editorial was brought up – “Make Them Pay For Views” – which I thought was a ridiculous premise – despite the legendary author.

And a second segment talking about professional services used for acquiring assets.

After the hour was up, I ran over to Bloomberg Radio’s Surveillance with Mike McKee (at 33 minute mark) [Listen to clip]

Gotta go. The Spartans are playing in the Cotton Bowl now.

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Billionaires’ Row: I Can See For Miles And Miles, Until You Can’t

December 21, 2015 | 2:12 pm | nytlogo | Favorites |

UPDATE: The following article made the front page of the NYT today, my 13th A1 appearance (but who’s counting?).

New York Times’ Matt Chabin writes a piece about the “Super Tall” phenomenon on Manhattan’s West 57th nicknamed “Billionaires’ Row” called Developers of Manhattan Spires Look Past 1,000-Foot Neighbors.

“It’s like the Who song,” said Jonathan Miller, president of the appraisal firm Miller Samuel. “You can see for miles and miles and miles. Until you look into your neighbor’s building.”

The changing skyline is a well worn and controversial discussion throughout much of Manhattan’s storied (pun intended) real estate history. It’s quite amazing to appreciate how much the skyline has changed over the past century, nearly always moving taller. In the current iteration of growth, the potential benefit seems to be the financing of affordable housing.

billionaires row skyline

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[Three Cents Worth #291 Ski] Aspen Sales at $10 Million and Above Stay Consistent

August 31, 2015 | 6:19 pm | curbed2 | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed Ski. Whether I’m on the trail, on the lift or in the lodge, I’m always taking notes with my gloves off.

Check out my 3CW column on @Curbedski:

Over the last decade, sales of high end Aspen residential properties have followed a logical flow, consistent with the overall U.S. housing market. Activity peaking in 2006; extinguished with the Lehman Brothers collapse in 2008; weakness in 2011; showing elevated levels over the past year; all tell the national real estate story. And recently…

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[VIDEO] Fox Business ‘Risk & Reward’ w/Deirdre Bolton 7-27-15

July 27, 2015 | 10:22 pm | TV, Videos |

Always great to swing by and speak with Deirdre Bolton on her Fox Business show “Risk & Reward.” However today’s show was a bit of a mess for me. Working on 4.5 hours of sleep I said I was talking about “interest-free” then changed it to “principal-free” mortgages – LOL – good grief! Note to self: “interest-only.” Plus my company name was reversed 2x and the chyron had it backwards as well. Didn’t discourage me though – always fun to do the show.

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[Video] Bloomberg TV w/Mark Crumpton 7-1-2015

July 5, 2015 | 9:08 pm | TV, Videos |

I very much enjoyed my interview with Mark Crumpton on Bloomberg TV last week concerning the state of the Manhattan and U.S. housing markets. Our just published market report for Douglas Elliman revealed a number of records int he 2Q 2015 real estate market.

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Bloomberg View Column: How Long Before a Home Lists for $1 Billion?

June 25, 2015 | 10:49 pm | BloombergViewlogoGray | Charts |

BVlogo

Read my latest Bloomberg View column How Long Before a Home Lists for $1 Billion?. This post went #1 on the Bloomberg Terminal and on the public facing BloombergView.com site for about a day and a half. Crazy.

halfbillionBV

Here’s an excerpt…

When a Los Angeles hilltop home that’s under construction was recently priced at a record half-billion dollars, it looked like a one-off in excess. The same thought occurred to me late last year when real estate investor Jeff Greene, who won big betting against the housing market before the financial crisis, priced his renovated Beverly Hills, California, home at $195 million…

[read more]


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Palace: When A $500 Million Asset Is Not A Home

May 26, 2015 | 3:15 pm | bloomberg_news_logo |

2015.05_airoletop

When I was called by Bloomberg News about a new Bel Air (LA) listing that was asking $500m and another one down the block by the same architect but different developer at around $400 million, my initial reaction was laughter. I wasn’t doubting that there could be a buyer somewhere out there somewhere…but rather at the absurdity of it. It also seems like a strike against it to have a nearby home done by the same architect, no?

As I told a bank executive/client this morning that it’s clearly a strange world when someone builds spec housing for a handful of buyers worldwide and no houses in the local market have ever sold close to half the proposed asking price (including Jeff Greene’s $195 million listing that has been on the market since December.)

At a combined $100k square feet (main house + 3 smaller houses), it will be bigger than “Versailles” a 90k square foot house outside of Orlando, Florida that was the subject of the documentary “Queen of Versailles.”

According to NAR, the U.S. median home sales price is currently $219,400.

If the Bel Air home is sold, it is doubtful this would end up as someone’s primary residence. Perhaps we should label this type of asset as something else besides a “home?”

How about a Palace?

That’s what the architect suggested:

“It’s very similar to a palace,” he said. “The house is about public functions rather than domestic living.”

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[Three Cents Worth #285 Ski] Aspen Real Estate Has Had Many Peaks, But It’s Not Peaking

May 22, 2015 | 8:00 pm | curbed2 | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed Ski, whether I’m on the trail or in the base lodge of a ski mountain near you…or I’m in the lift line taking notes with my gloves off.

Check out my 3CW column on @Curbedski:

For my first Three Cents Worth column on Curbed Ski, I felt compelled to provide a look at one of the priciest ski towns around: Aspen, Colorado. As a real estate analyst and appraiser for nearly 30 years (and a skier, of course!) I have relied on information culled during the research for the quarterly housing market report for Douglas Elliman. In Aspen, the first quarter of 2015 reflected a thorough shift towards larger home sales resulting in large aggregate housing prices gains…

3cwASPEN5-21-15

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My latest Three Cents Worth column: Three Cents Worth: Aspen Real Estate Has Had Many Peaks, But It’s Not Peaking [Curbed]

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[Video] Why The Rich Get Richer

May 4, 2015 | 11:05 am | wsjlogo |

Here’s one way to look at it.

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[Three Cents Worth #279 NY] New York’s Building Boom Doesn’t Mean More Units For Sale

April 26, 2015 | 1:57 pm | curbed2 | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out my 3CW column on @CurbedNY:

Now that I am fully recovered from Micro Week, I thought I would think a little bigger and present the Manhattan inventory picture by comparing new development and re-sales. I’ve charted it from the pre-Lehman high (PLH for those in the know) through the end of 2014 in two graphs. One shows the year-over-year change, and the other tracks inventory by units to help tell the whole story. Inventory was in a state of free fall for both types from 2009 through 2013, but in 2014 the picture clearly changed…



3cw3-19-15
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My latest Three Cents Worth column on Curbed: Three Cents Worth: New York’s Building Boom Doesn’t Mean More Units For Sale [Curbed]

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