This story is brought to you by The Daily Upside. For more crisp and insightful content, you can sign up for the free Daily Upside newsletter here.
Buoyed by record-low interest rates, demand for larger homes and general exuberance - home prices are soaring across much of the country.
But much to the chagrin of secretive billionaires, the ultra-luxury real estate market in Manhattan has (with some exceptions) not participated in the boom.
According to Bloomberg, the 58th-floor condo of a prominent luxury tower recently sold for $16.8 million, a 51% markdown from its purchase price in 2014. It’s the largest loss for any condo at One57, the building that set off New York’s high-end construction boom in a neighborhood known as Billionaires’ Row.
Following the 2008 real estate crash, deep-pocketed foreign investors rushed to buy newly-constructed condos atop Manhattan’s skyline - often as a way to shelter money. The New York Times found in 2015 that $8 billion was spent annually on NYC properties costing at least $5 million.
Interestingly, more than half of those purchases were made via shell companies by owners that rarely set foot in the residences.
Many buyers had very little practical use for the properties - viewing them more as a store of value. Lately, that hasn’t been working out - at One57 four other condos sold at a 40% loss last year.
Double The Pain: Meanwhile, on Jan. 1, Congress passed a bill that will prevent buyers from shielding their identity behind LLCs.
Why It Matters: Unless you are a Saudi sheikh, it probably doesn’t.