Manhattan Luxury Real Estate Peaked Last February – Prices Now Down 8 Months in a Row

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William Ackman is a wildly successful hedge fund manager. He oversees $17 billion of mostly other people’s money. Forbes estimates his personal net worth at $1.7 billion. These facts alone would make him a prime candidate to buy the penthouse condominium at One57, the new luxury tower on West 57th Street.

And indeed, Mr. Ackman told The Times in a fascinating profile Sunday that he is the buyer of the 13,500-square-foot condo with an estimated price of $90 million. What is more shocking is what he plans to do with it.

Apparently content living with his family on the Upper West Side, he told The Times he was purchasing one of the most expensive properties in New York because “I thought it would be fun” and he and some close friends “bought into this idea that someday, someone will really want it and they’ll let me know.” They may throw the occasional party there.

– From the New York Times article: A $90 Million Condo Flip Shows What’s Wrong With Financial Capitalism 

Last fall, I published several posts detailing the clear evidence that London’s luxury home market had topped, as news emerged that sales for the most expensive units had plunged 26% year-over-year. This was significant since London represents the ultimate prize in the corrupt foreign oligarch/dictator portfolio. It was the canary in the coal mine for the entire global ultra-luxury real estate market, and we’re now seeing indicators that this trend is also becoming entrenched in America’s oligarch crown jewel: Manhattan.

A few weeks ago, Bloomberg published an important article that many of you may have missed since it came out on Christmas eve. It was titled, Manhattan Luxury-Home Prices in a Slide, Defying Broader Market, and here are a few key excerpts:

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Identity of Real Buyers to Be Required in Manhattan and Miami for Certain “All Cash” Real Estate Transactions

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The Financial Crimes Enforcement Network (FinCEN) today issued Geographic Targeting Orders (GTO) that will temporarily require certain U.S. title insurance companies to identify the natural persons behind companies used to pay “all cash” for high-end residential real estate in the Borough of Manhattan in New York City, New York, and Miami-Dade County, Florida. FinCEN is concerned that all-cash purchases – i.e., those without bank financing – may be conducted by individuals attempting to hide their assets and identity by purchasing residential properties through limited liability companies or other opaque structures. To enhance availability of information pertinent to mitigating this potential money laundering vulnerability, FinCEN will require certain title insurance companies to identify and report the true “beneficial owner” behind a legal entity involved in certain high-end residential real estate transactions in Manhattan and Miami-Dade County.

– From today’s announcement: FinCEN Takes Aim at Real Estate Secrecy in Manhattan and Miami

Anyone with a pulse and more than a couple of functioning brain cells has been aware for years that corrupt foreign oligarchs, politicians and dictators have been using global high end real estate as their preferred means to launder billions if not trillions of funds collectively stolen from their host populations. While London seems to be the preferred venue, Manhattan is not that far behind.

To get a taste of the problem, here are a few excerpts from the 2014 post, Introducing Ghost Skyscrapers – NYC Real Estate Goes Full Retard:

“The Census Bureau estimates that 30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year.”

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Luxury London Real Estate Prices Plunge 11.5% Year-Over-Year

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Two months ago I published a piece titled, Luxury London Home Sales Plunge 26% – Has this Mega Real Estate Bubble Finally Burst?. I wrote:

It appears the music may have finally stopped for one of the world’s largest luxury real estate bubbles: London.

It’s well known that foreign oligarchs love London real estate as a means to launder funds, typically “earned” by soaking their host countries dry via corruption and fraud. This has caused absurd and irrational spikes in high-end residential real estate in the English capital, as well as a flood of new construction.

With emerging markets now completely collapsing, the seemingly endless flood of foreign money is drying up, and with it, London real estate.

So has the London real estate bubble popped? Probably.

Now we see the following from Bloomberg:

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Luxury London Home Sales Plunge 26% – Has this Mega Real Estate Bubble Finally Burst?

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It appears the music may have finally stopped for one of the world’s largest luxury real estate bubbles: London.

It’s well known that foreign oligarchs love London real estate as a means to launder funds, typically “earned” by soaking their host countries dry via corruption and fraud. This has caused absurd and irrational spikes in high-end residential real estate in the English capital, as well as a flood of new construction.

With emerging markets now completely collapsing, the seemingly endless flood of foreign money is drying up, and with it, London real estate.

So has the London real estate bubble popped? Probably.

From Bloomberg:

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