Does this trend mark the beginning of the 2017 real estate market collapse?
New York’s “Billionaires Row” Suffers Biggest Foreclosure In History
“This shows that too much leverage is probably not wise,” Anna LaPorte, an Extell spokeswoman, said of the most recent default.
A June 14 auction was scheduled for a 56th-floor apartment at the same tower. That condo was purchased in July 2015 for $21.4 million. Public records have yet to reveal any transfer of ownership for that property.
Investors across the NYC property spectrum should take note; prices in Manhattan and Brooklyn have risen so quickly they’ve effectively pushed marginal buyers out of the market and forced renters to devote a greater share of their income to housing. Today, more than 30% of Americans pay half their income in rent – the highest percentage in decades.
And with more investors in the city concentrating on luxury properties, some ultra-luxury buildings like One57 are struggling with unsustainable vacancy rates of nearly 40%.
Until last month, no apartments on Billionaires’ Row, which also includes 432 Park Ave., had been subject to a foreclosure auction, according to PropertyShark. The loss of a Manhattan residential property to creditors is a rare event, regardless of the unit’s price-tag: Only 27 new residential foreclosures in the borough in the first quarter.
Could this be the start of a trend? We think so. Which leads us to our next question: How, exactly, does one short the luxury real-estate market?
We also look forward to The Left deciding that a probe into this transaction is warranted, just in case it was some complex way to transfer Russian funds to Trump… (only half-kidding).