What Housing Crisis? Why the mortgage mess hasn't hit the luxury market, yet

[EV_Ares]

Not every sector of the housing market is tanking; high-end real estate sales are surprisingly strong. A look at the country's priciest residences.
There isn't much positive news in the housing sector. Largely as a result of the subprime mortgage mess, the number of homes that slipped into foreclosure proceedings in 2007 jumped 70 percent from the previous year, according to RealtyTrac. The National Association of Home Builders this week announced that new-home sales dropped 29 percent in 2007, the industry's biggest drop in four decades. In addition to those troubling stats, there are the ever-increasing costs of energy and recession worries to be concerned with.

So why are ultrahigh-end home prices still rising, with some prices reaching up to an astronomical $175 million? It's a simple matter of supply and demand, say brokers from hot markets like Manhattan, the Hamptons, Palm Beach and both ends of California. While there's a national glut of McMansions in the $500,000 and up range, there's a shortage of trophy properties on the market and an increasing number of wealthy foreign buyers from Asia and Europe looking to capitalize on the weak U.S. dollar.

Those struggling to pay their monthly mortgage or buy a first home may be envious or appalled, but according to market data from DataQuick, sales for homes costing $5 million and above climbed 31 percent in the first quarter of 2007 compared to the same quarter in 2006. Sales of Manhattan apartments costing $10 million or more tripled in 2007, according to the real-estate company Prudential Douglas Elliman. How rich are these buyers? The brokers NEWSWEEK spoke to say many of their high-end sales represent the purchase of a second, third or fourth home.

"The rich are even richer than ever before and the very wealthy are pouring more money into residential real estate," says Laurie Moore-Moore, the founder of the Dallas-based Institute for Luxury Home Marketing, a membership and training group for luxury-real-estate agents. While Europeans have always invested in American properties, Moore-Moore says new buyers are increasingly from Brazil, Russia, India and China.

Link to entire article: http://www.newsweek.com/id/106188

[burythehatchet]

1. combine this with private security forces, private fire fighting and what do you get?

:scared:

[Yurovsky]

4. A country within a country ...

take a drive along the beach in NY, Fla, CA, etc ... all of those homes should be confiscated by the government and turned over to the homeless, Katrina victims, and disabled veterans. Just one of those disgusting mansions could probably house 5 or 6 normal families.

This country is in need of a revolution, only this time it will be on economic/class lines. The sooner the better.

[Selatius]

2. Wealthy people are buffered against the kind of economic hardships poorer people suffer.

People who run America, those hedge fund managers on Wall Street for instance, can easily take home annual compensation in excess of 20,000,000/year.

$500,000 McMansions are things the elite consider as a joke.

[El Pinko]

10. I'm dirt poor and I consider them a joke.

What could be a more blaring emblem of one's lack of class, intelligence, taste or breeding than the choice to purchase a ginormous pile of quickly-slapped-together stucco ticky-tacky that's supposed to be "classy" because it's got marble countertops and central vacuuming. Never mind that the walls are sheetrock, the columns on the front of the house are pre-formed plastic and the whole thing looks like greco-roman, tudor, spanish and mediterranean thrown into a blender on high speed...


THIS is a house.




This is a tragic waste of money and materials.






Not that I could ever afford anything like Fallingwater, But I'd definitely settle for something older, smaller and more authentic for the same price than have a hideous pile of cheap claptrap.

[Selatius]

11. The big joke is on people who think having a 500,000 home is a status symbol or a signal of wealth.

The fact is it's not.

When you get tricked into trying to keep up with the Joneses, the Joneses have already won. They will own you several times over.

[blondeatlast]

3. Sigh--doesn't this speak volumes?

"...there's a shortage of trophy properties on the market and an increasing number of wealthy foreign buyers from Asia and Europe looking to capitalize on the weak U.S. dollar."

...and to capitalize on American workers and taxpayers and soldiers.

I've got to get me son out of here, I sincerely fear for his future.

[kdmorris]

5. It's kind of odd, but...

I have three daughters, whom I love dearly and wouldn't trade for anything in the world. I've always wondered what having a son would be like, if they are different than girls, etc.

When Bush came to power, it was the first time in their lives that I was incredibly grateful that they were all girls and not subject to the draft. Then, when I started thinking about what it would be like to have a son, I realized I would be in fear for his life right about now. I feel for those of you who must raise young men in this hyper-military society. It must be as hard as it is to teach girls that beauty isn't everything.

[blondeatlast]

7. When it really hit home for me:

My son is turning 11 this month and started a new school at the beginning of the year. Anxious to make friends, I took him to the autumn carnival at his school. Great time, nice people, very enjoyable--then on our way out one could not pass the exit without going past a National Guard climbimg wall.

Of course he wanted to go on it. I was reticent, but I let him do so--with one strong caveat, issued directly in front of the NG representative. Beyond safety instruction, THEY WERE NOT TO TALK TO HIM OR HE TO THEM.

They thought I was over the top, clearly, and perhaps I was. OTOH, several other parents cheered me on and let their children climb the wall under the same instructions.

I considered it a bit of a triumph, but I was also upset that they had such easy access to children of that age (this is a K-8 school for now).

[kdmorris]

8. Wow they are starting earlier!

Good for you!!! Even for my daughters (aged 16, 18 and 20), we constantly get spammed with mail for them to join the Army or the National Guard or some such thing. The glossy pictures all make it look like so much fun. Luckily, they haven't fallen for it, but it makes me kind of mad that they try. Of course, the mail started coming when they were in the 11th grade, so having that sort of thing in elementary school is kind of frightening.

[leftchick]

6. damn! check out these places in Manhatten...

http://www.brownharrisstevens.com/results.aspx?Page=1&PageSize=10&ShowImages=1&Order=1&Ownership=1&SectUES=1&p=1&MinPrice=3000000

:wow:

[kdmorris]

9. Four of those places have contracts signed

Four people willing to plunk downs tens of millions of dollars, and we struggle to pay our mortgage on a house that we bought for $125,000 in 2001.

[SoCalDem]

12. Because there are only "so many" patches of beach and

dropdead gorgeous views are limited..and because secluded/protected hideaways are always in short supply.

[Xenotime]

13. How much space does a fucking person need?

Nevermind the large carbon footprint you are creating by owning something so huge.

[KillCapitalism]

14. It's because the uber-wealthy don't have mortgages.

If you're a billionaire, paying cash for a $50,000,000 estate is like you or I buying a soda at the gas station...it's chump change.

[Snarkturian Clone]

15. In Philly, Two Liberty Place got outfitted with condos at the top

that go for $1 Million each. Some gazillionaire took one look at them and said "I'll take five. Make them all one unit!"

[Giant Robot]

16. The author got another thing right

I cannot buy a first home and I am envious and appalled.