In a recent Wall Street Journal article a survey of those with investable assets of $ 30m+ revealed that the rich prefer commodities, real-estate, private companies in 2012 to place their investable dollars. 48% plan to increase their allocation to commodities in 2012, and 45% of respondents are looking to real estate….we see this already with the market starting off with a bang.
The message is all about the need to invest in tangible assets. Art, collectibles should do well to. Maybe this is the strongest argument that those in the know (and lets face it, the rich usually know first) feel certain that inflation is on the horizon…..we think its here already, quietly hidden by government statistics that omit critical factors when evaluating inflation. And real estate has always been a solid hedge against inflation, which bodes well for the New York luxury cash-driven market. With Metlife getting out of the mortgage business too, obtaining mortgages will be the challenge for the rest of the market.
I suspect pricing records for premium properties could be broken in 2012. We shall soon find out.