The Manhattan LUXURY real estate market is a market that addresses about 10% of the population….the very wealthy. The top 10% is experiencing what economists would consider full employment. Maybe this explains the very active real estate market we are witnessing?

According to a study from Northeastern University’s Center for Labor Studies, unemployment for those in the top income decile–individuals earning more than $150,000 a year–was 3% in the fourth quarter of 2009. That compares with unemployment of 31% for the bottom 10% of income, and unemployment of 9% for the middle decile. The differing rates of underemployment–including those working part-time for economic reasons–are also notable. Underemployment for the top 10% was 1.6%, while the bottom was 21%.

The report added that, “There was no labor market recession for the nation’s affluent.”

This would be news, of course, to the tens of thousands of people laid off in finance and other white-collar occupations. And it is unclear how the numbers compare with prerecession employment numbers.

Yet the numbers may suggest an emerging theme in our economy: The wealthy/luxury market is recovering while the rest of the country isn’t. As such, the data raise questions about the theory behind what is informally known as “trickle down” economics, since full employment at the top doesn’t seem to be translating into more jobs below. Of course, the current environment may be the exception, with the global financial crisis making the preservation of capital far more important than chasing even modest returns on investment. And real estate is a good money placement option when big returns are not expected…..especially if its your home.