Property Price Fluctuation In A Highly Desirable City

nyc csmonitor

Example 1:
Refuses offer of $80M in 2008; Accepts offer of $37M in 2009

“After shlomo Ben-Haim, an Israeli scientist-entrepreneur, made millions selling a medical-device company he’d founded with his brother, a London-based lawyer, he agreed to invest $28.9 million of the proceeds in a nine-room, four-bedroom penthouse on the 40th floor of 15 Central Park West, the Robert A.M. Stern–designed luxury condominium in Manhattan—when it was still just a hole in the ground in 2005. But months after closing, in spring 2008, Ben-Haim put it back on the market—priced at a whopping $80 million.
With its private elevator landing, 14-foot ceilings, and sweeping Hudson River and Central Park views, the apartment quickly attracted a buyer, but the threat of a huge tax bite for selling less than a year after buying convinced Ben-Haim to spurn the offer. When Lehman Brothers filed for bankruptcy that fall, Ben-Haim took his penthouse off the market. Finally, in February 2009, it was offered again at the recession-reduced price of $47.5 million, and was soon sold for $37 million to a limited liability company named after the Russian city Novgorod.”

Example 2:
10% nominal loss over 40 years

“Steinberg’s presence at 740 was first noted in The New York Times in 1981, 12 years after he bought his 37-room duplex there for $225,000 —$25,000 less than it cost new in 1929— and then went unmentioned until 1994, the same year Kravis made noise, too, for moving to a new ballroom-equipped apartment at 625 Park, purchased for $15 million. His tenure at 740 had gone unreported until he moved out.”

– from ‘Where the Money Lives: New York Real Estate Today’, Michael Gross, Newsweek, 14 Jan 2013

Even in highly desirable cities, RE prices can fall.
And, coming off an historic bubble, prices can take decades to recover.
– vreaa

18 responses to “Property Price Fluctuation In A Highly Desirable City

  1. 9th annual survey

    Click to access dhi.pdf

    Hong Kong’s Median Multiple increased from 12.6 to 13.5, nearly equal to an additional year’s median household income. Vancouver was the second
    least affordable, with a Median Multiple of 9.5, followed by Sydney (8.3), San Jose (7.9), San Francisco and
    London (7.8) and Melbourne (7.5).

    Vancouver actually “moderated” from 10.6 to 9.5.

    Somebody may want to check the numbers they used, as some median house prices are not correct. I’m not totally sure where they get the prices from because they did not get Saskatoon’s even remotely close.

  2. Naked Official #9000

    Wow is that picture taken from the parking lot half up cypress mountain?? MOST BEAUTIFUL CITY EVARRR


    Our new area code should be 888 – that would protect us from price fluctuations.

    • Pretzels...thirsty

      That’s NYC, FYI.
      No matter what the delusions, Vancouver is a 3rd tier city in the the larger scheme of things.

      • Naked Official #9000

        Loyal cadre,

        It is good to see a beautiful picture of another of our new concessionary zones and treaty ports!

        Long live the reign of the kingdom of the middle!

    • You can tell how good a place you live in by how quickly you can dial your area code on a rotary phone. Places with low first and third digits and a ‘1’ in the middle rank far above places with high first and third digits and especially with a ‘0’ in the middle.

    • Weird stuff Naked Official 9000. I thought they were going to change Vancouvers area code to 911 to capture the essence of the emergency in housing. That or 666. Yeah……it is 666.

      PS: An earhtquake is coming.

  3. @ Kevin,

    If you check out page 49 of the Demographia document, they state the following: “Median household income data is estimated using national census data or surveys for each metropolitan market, where such data is available”, which may essentially mean they are using 2006 census data for median income in Canada. The median house pricing data should be more recent, probably leading the median multiple to be skewed low.

    The data is interesting for comparing individual markets across time, however.

  4. @ told-you so,
    actually it’s the median house price number that is low.

    • I think we can agree that both are low. I do agree that the median house price appears to off by a larger amount. I have no idea where they got the median price data from, but it doesn’t appear to be current.

      Regardless of where the stats come from, the usefulness of the data lies in the changes in the median multiple from year to year.

    • Hey Kevin….are you Kevin Hegedus by any chance? Always wanted to ask you that. I suspected you might be from PWM……

      No need to answer….just curious.

  5. The property in Example 1 did not really go down in price. Only the profit was lower than expected.

    • There was a bid at $80m on it that he could have sold to. Prices/values can move without transactions.

    • Agreed that the owner profited. But, at the peak, there was a bid that would have given them far more profit. In that respect it did go down in price.

      • Nope, can’t agree with that.

        Let’s say that you own a ‘widget’ and someone offers you $10,000 for it, which you don’t take because you think that it might be worth more – at that time.

        Now, nobody really wants a ‘widget.’

        The hard part: What is the ‘widget’ really worth?

      • If you got a contractual offer for that widget for $10K, and you could have taken it, then the market value of that widget at that time was $10K (whether you accept the offer or not).

      • Exactly.

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