Posted by Leonard Steinberg on June 17th, 2014
Today word spread that another billionaire swept in to buy the French government owned duplex at 740 Park Avenue for many millions over the asking, supposedly $70 million….for a co-op….that needs renovation work. Can only billionaires pay these prices?
I have found over the past few years that many of the buyers who were buying apartments above $15 million were NOT billionaires. In fact they were far from it. Do you have to be worth a billion to buy a home costing $50 million? The answer is no. Everyone assigns a different percentage of their wealth towards the cost of their home. Many billionaires do not own excessively expensive homes, whereas those with considerably less wealth do. Someone who is worth $100 million can comfortably afford a $20 million home….and they do. Just the way many Bentley buyers are quite far from being super-rich. Of course some of these buyers get into trouble when they over-extend themselves. Many are younger and factor in growing income and wealth over time. Many want to capitalize on super-low interest rates. Some simply say “why not?”….money is to be enjoyed not hoarded.
So to all those doubters of the depth of the market for super-expensive apartments, I think your concerns are valid, but maybe the buyer pool is a lot deeper than the 1000+ billionaires everyone keeps relying on.