Ultra/Mega Mansion Sales Up

[erpowers]

Barron's has reported that even though the lower level housing market is slowing the ultra/mega mansion sector of the real estate business is on the rise. In addition, analysts seem to see no sign of slowing in this sector. Ultra/mega mansions are considered houses that cost $20 million or more. In one case a luxury home realtor reported to Barron's that they put an eight figure home on the market and it was bought that week. Barron's reports that the rise in ultra/mega mansion sales is do the the 10% rise in the number of millionaire. Barron's reported that there are now 84,000+ millionaires worldwide.

The same thing seems to be happening in the Houston area. River Oaks is one of the elite areas of Houston. According to Wikipedia, houses in the River Oaks area range in price from $1 million- $20 million. Houston Business Journal is reporting that home sales in the River Oaks area is on the rise over last year. Even the time of the sale of these ultra/mega manisons decreased. According to Houston Business Journal and Barron's, last year it took about a year to sell homes like this; however, this year it is taking considerably less time to sell these homes. Houston Business Journal gives attributes this rise in home sales to the rise in oil prices and the increase in oil executive pay.

[The Anti-Neo Con]

1. Sickening!

I've read where people who own multi-million dollar mansions often don't own only one, but own several.

Meanwhile the average working man in the US struggles to pay rent/mortgage on ONE roof over his head.

[erpowers]

4. The Barron's Article

The Barron's article mentioned that fact. One of the realtors started talking about the people who own such houses. This realtor pointed to Hollywood and people like Cher, Sly Stallone, and Eddie Murphy. I think the realtor mentioned that Cher has eight of these types of homes across the country. The thing that got me was that even though there are billions of people in this world only 84,000+ of those people are millionaires. In this case I think reporting the number of ultra wealthy is better than reporting the percentage.

[rfranklin]

5. The average Joe financed these palaces...

through tax cuts, tax credits and other handouts that the Bush junta has doled out to one-tenth of one percent of the population.

[Libby2]

11. Cripes

right now we are struggling to pay for gas and power.

[fasttense]

2. Even though I worry about making my mortgage payment, I'm glad

to hear mega billionaires have mansions to live in. I was worried the riches 1% would have to live in middle class homes. What a relief. :sarcasm:

[KharmaTrain]

6. The Bigger The Mortgage/Property...The More Deductions

Thanks to creative financing, these mega mansions can be a tax haven in themselves. As mortgage interest is deductable, the larger that interest payment, the bigger the write-off. For example, a $2,000,000 mansion...mortgaged at 15 years at 6.5% or so (sorry if I don't have the exact current rate) with say a 10 or 20 percent downpayment can mean thousands paid in interest that in-turn is used to offset earnings. It's a big selling point among investment planners and real estate agents these days...there's little to be made on the growing glut of low and medium priced housing in the area that has stagnated in value.

[Lasher]

3. The growing divide

Worsening gap

After World War II, America made genuine progress against the wealth gap, as an "opportunity society" with a growing middle class. The GI Bill of Rights and other opportunities opened doors, enabling millions to share the American Dream. Through the 1970s, all economic groups rose equally. Income roughly doubled (in inflation-adjusted dollars) for each quintile of the U.S. population.

But in the past quarter-century, a sad U.S. reversal has occurred. Lower income groups are slipping backward, while the elite reap astonishing bonanzas. Census Bureau figures show that the top 5 percent of Americans have enjoyed 75 percent growth in yearly income since 1979, while the bottom 20 percent suffered 2 percent loss. The wealthiest 1 percent now own 44 percent of all U.S. investments, and the next 9 percent own most of the rest. Average compensation of top corporation officers is 400 times greater than worker pay — a condition unknown in the rest of the industrialized world.

"The United States is now the third most unequal industrialized society, after Russia and Mexico," write Chuck Collins and Felice Yeskel, authors of Economic Apartheid in America. "This is not a club we want to be part of. Russia is a recovering kleptocracy, with a post-Soviet oligarchy enriched by looting. And Mexico ... has some of the most glaring poverty in the hemisphere."

<snip>

Why is America slipping farther into a society of haves and have-nots? Part of the explanation is technological. Almost every industry has been transformed by labor-saving machines, wiping out millions of manual jobs, the former domain of less-educated people. West Virginia’s coal employment dropped from 125,000 to 15,000 because of machines. The computer revolution is hastening this process. New developments usually give those at the top more ways to slash payroll and boost earnings. As industrial armies were drastically downsized, labor unions lost their power to fight for little people.

Another cause of the widening gap lies in Republican national administrations favoring the affluent. Starting with President Reagan in the 1980s, gigantic tax giveaways have been lavished on the rich, while the safety net for low-income folks shrinks.

http://www.wvgazette.com/section/Editorials/200607055

[Swamp Rat]

7. God will smite them all!

[npincus]

8. everyone wants one: McMansions

everytime I visit my Mom in Bayside, Queens NY, I notice more of the modest, charming single family homes being replaced by overscaled, badly-proportioned, monstrosities... skinny, 2-story high doric columns supporting tiny porticos at the "grand entry", above is an enormous window usually revealing a Liberace-themed chandelier... UGH. Really gross. And depressing.

[NJCher]

9. what you're seeing

Is the tail end of the building. There was an article in the Wall Street Journal that discussed the sale of McMansions and they are losing value fast. This article appeared about two or three weeks ago.

Sellers who want to get rid of McMansions are having to shave off hundreds of thousands. They are having to make a lot of other selling concessions, too.

The reason they are losing value is the increase in what it takes to heat and cool them, plus the fact that the people who have lived in them say they don't need that much space. They say they closed off most of their house and just lived in the rooms they needed.

What's in biggest demand now for the middle class (again, from the article) is the typical 2000-square foot house with three bedrooms and a couple baths.




Cher

[B3Nut]

10. I like a decently big house....

but not these new pieces of slapped-together trash. Give me an historic old home, like a classic 100+ year-old Victorian. We have a craftsman-style home that is over 100 years old. The detached garage still has the old original outhouse in it...the house was built before the advent of indoor plumbing. It's really interesting. I laugh at these new McMansions and cookie-cutter homes that development companies pepper the landscape with...when those pieces of crap start falling apart, the old craftsman and Victorian homes will still be standing.

And the new neighborhoods suck...too homogenous. Give me a colorful historic district, or a farmhouse out in the boonies (but not too far out that you can't get broadband...hehehehe). These cheesy new developments blow chunks. No character whatsoever...

Even the tract homes built after WWII had more charm, I lived in a neighborhood of postwar housing in Battle Creek when I bought my first house. It was a rather small little ranch, but it was cozy and more than enough for me and a dog. That little house was built like a freaking tank! Stout little thing...I loved it.

Todd in Beerbratistan