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But I’m Different

A report from Bloomberg on New York. “The developer Cary Tamarkin bought at the top of the market. His $50 million purchase in 2014 wasn’t a luxury apartment though; it was a former Catholic school at 555 West End Avenue, on New York’s Upper West Side. Tamarkin and his partner, CL Investment Group of China, decided to convert the building into 13 luxury condominiums. They later announced that the apartments’ prices would start at $7.9 million, and construction began in late 2015.”

“Tamarkin was not in a cave and is not blind to the market. ‘There’s a huge amount of very expensive penthouse apartments that are lingering on the market,’ he says. ‘There’s still a group of buyers in that price range, but the reason [apartments] are lingering, to my mind, is because the economy is questionable, and buyers don’t have to make a decision quickly these days unless there’s a sense of urgency.'”

“Yet, Tamarkin’s building will begin sales next week with prices that land squarely in the market’s weak zone. Given that Tamarkin acknowledges New York’s ‘glut of high end apartments,’ it would stand to reason that he’d pivot to cheaper, smaller apartments instead. He admits that if he did so, the units would probably move faster. He’s sticking with the original plan, he says, because he believes that his building is unique. ‘I’m banking on it being very special,’ he says.”

“The building will have a 24-hour doorman, fitness centre, recreation room, bike storage, and individual storage units. ‘When I walked through it recently, I thought: We should actually raise prices,’ Tamarkin says. ‘Not by being a greedy developer, but because we think the value is there.'”

“That assertion remains to be battle-tested by the New York’s current real estate market, which shows no signs of picking up soon. ‘Right now, we have something in the order of four years of excess supply,’ says appraiser Jonathan Miller. ‘Even though developers are aware of the competition, it still feels like the same dialogue from five years ago, which is: ‘But I’m different.’”

The Orange County Register in California. “An oceanfront palazzo in Laguna Beach’s secluded Irvine Cove that hit the market five years ago for $65 million sold this month for $32.7 million. The asking price dropped several times since 2013, and was entered into the Multiple Listing Service on Sept. 12, the day the house sold, at $38.9 million.”

“The estate, with 17,000 square feet of living space, is one of only five homes directly above the sand in the guard-gated community. Completed in 2010, the main house at 2585 Riviera has towering glass doors and a foyer with terrazzo floors inspired by those at the Getty Villa in Malibu.”

This Post Has 18 Comments
  1. ‘sold this month for $32.7 million. The asking price dropped several times since 2013, and was entered into the Multiple Listing Service on Sept. 12, the day the house sold, at $38.9 million’

    So they accepted $6 million less the day it was relisted.

  2. ‘Given that Tamarkin acknowledges New York’s ‘glut of high end apartments,’ it would stand to reason that he’d pivot to cheaper, smaller apartments instead. He admits that if he did so, the units would probably move faster. He’s sticking with the original plan, he says, because he believes that his building is unique. ‘I’m banking on it being very special’

    This is a peculiar aspect of mania thinking we’ve seen in numerous places. Luxury apartments and luxury student housing. Knowing full well there’s a glut, and they spend years and many millions to add to it. Phony Yellen bucks looking for a place to die.

      1. I’m not sure it’s him, but rather the foreigners financing this debacle. He is just the public face and after all without it he might have to get a real job.

        April 19, 2018

        From Bisnow on Florida. “‘Palm Beach is completely on fire,’ said Todd Michael Glaser, a high-end homebuilder who made his name in Miami but has lately been concentrating on Palm Beach County. ‘I’ve never seen the amount of $8M to $70M homes as in the last three and a half, four months. It’s staggering.’ It’s not just single-family homes that are hot, but a new wave of high-end condos and mutifamily apartments, especially in downtown West Palm Beach.”

        “Kolter Urban President Bob Vail, who is developing the Alexander, said that there is something of an arms race for amenities in the new supply of high-end homes. ‘You see that across the U.S. There are [apartment] buildings in Atlanta, Denver and Dallas that are nicer and more fully amenitized than condominium units, because that’s what it’s going to take to get people to choose that building,’ Vail said. ‘It’s just sort of a differential advantage. It’s really become a race in those more in-demand markets.’”

        “Though the market is healthy now, the developers agreed a slowdown is possible as new supply takes time to be absorbed, construction costs rise and actionable sites get harder to find. Low salaries in Palm Beach County mean that not many workers can afford high rents. When an audience member asked whether they were concerned with an economic downturn, Vail responded half-jokingly, ‘Condo developers, we don’t forecast those kind of things, you know what I mean? We’re just go, go go,’ he said. ‘And the faster we go, the faster we get to the closing, and then, I’m not going to say we don’t care, but … ‘ The audience chuckled as he trailed off.”

        http://thehousingbubbleblog.com/?p=10407

  3. ” We’re just go, go go,’ he said. ‘And the faster we go, the faster we get to the closing, and then, I’m not going to say we don’t care, but …”

    I guess that would explain the shoddy construction quality of just about every bubble-era condo complex.

  4. Hackers have been ripping off gullible shack purchasers thanks to complicit or lacksadisical realtors and their non-secure Internet sites and haphazard security practices.

    https://www.yahoo.com/news/hackers-target-real-estate-deals-devastating-impact-015558592.html

    Washington (AFP) – James and Candace Butcher were ready to finalize the purchase of their dream retirement home, and at closing time wired $272,000 from their bank following instructions they received by email.

    Within hours, the money had vanished.

    Unbeknownst to the Colorado couple, the email account for the real estate settlement company had been hacked, and fraudsters had altered the wiring instruction to make off with the hefty sum representing a big chunk of the Butchers’ life savings, according to a lawsuit filed in state court.

  5. I expect if you are going to spend 7million on a condo you are well past “need”. You likely aren’t living in your van with winter coming. Those kind of folks can afford to wait.

  6. ‘San Rafael-based Telltale Games announced via Twitter Friday that it laid off a majority of its employees “following a year marked by insurmountable challenges.”

    ‘The tweet said just 25 employees were “staying to fulfill the company’s obligations to its board and partners.” At its peak in mid-2017, the company had about 400 employees.’

    ‘Gamasutra, a technology publication, reported Friday that about 225 Telltale employees were laid off. The Verge, another technology publication, reported that multiple sources said Telltale employees were let go with no severance and given about 30 minutes to leave the building.’

    “It’s been an incredibly difficult year for Telltale as we worked to set the company on a new course,” Telltale CEO Pete Hawley tweeted Friday. “Unfortunately, we ran out of time trying to get there.”

    ‘On Friday, rows of desks and computers in Telltale Games’ offices stood abandoned. Only a few employees remained inside at their computers or laptops. Two men who described themselves as “now-former” Telltale Games employees casually conversed on their way out of the office. They said they were headed to a bar.’

    1. “It’s been an incredibly difficult year for Telltale as we worked to set the company on a new course,” Telltale CEO Pete Hawley tweeted Friday. “Unfortunately, we ran out of time trying to get there.”

      They didn’t run out of time. They burned through their fake Yellen Bux.

    2. I had predicted that Telltale was going to hit a wall a while ago. Most of it’s problems were self-inflicted from Kevin Bruner, the perpetual crunch, broken processes, refusal to outsource anything, bad C-level hires, etc. Only 2 of their games are said to have actually made a profit.

      But then what do I know? *cough*

      I feel real bad for the guy who accepted the job that that started last week…

  7. In my area, foot traffic feels like it has ground to a halt. And we’re in an area that was “less scathed” from the last housing bubble.

    Builders offering insane commission to move existing inventory.

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