by Wolf Richter, Wolf Street:
“You can’t lose money in real estate” – until you do.
The demise of the Manhattan house price bubble has a new and beloved for-instance.
Standup comedian and actress Amy Schumer is a total hoot on stage. And she’s a raging success. So it would have been nice if she could have made some money on her Manhattan co-op that was billed as a “penthouse.” But it looks like she ended up in the hole. Manhattanites, even funny ones, are now once again finding out, along with home sellers in certain other trophy cities, that “you can’t lose money in real estate” – until you do.
Her 850-square-foot 1-bedroom apartment occupying the entire top floor of a historic 20-foot wide townhouse – so this is not exactly a palace – at 129 West 80th Street near the Museum of Natural History went into contract on December 23, as reported today by Dow Jones unit Mansion Global:
The “Trainwreck” star has been trying to unload the home for over a year, first listing the one-bedroom, one-and-a-half bathroom unit with Compass for $2.075 million. She’s since cut the price multiple times. It was most recently selling for $1.625 million, according to a listing by the Modlin Group.
The asking price was last slashed in August to $1.625 million. So after more than a year of trying, and after the asking price has been cut by nearly 22%, she was able to unload it.
Yet, it’s a mini-jewel with wood-burning fireplaces in the bedroom and living room, “a claw-foot soaking tub” in the bathroom, and a staircase “to your private rooftop garden, a perfect place to unwind or entertain all while enjoying beautiful views of New York City,” as Modlin’s listing puts it.
Alas, she’d bought the unit in 2014 for $1.695 million. So if she actually sold it at the asking price, and not below it, and not counting real estate agent fees and other expenses, she is $70,000 in the hole. A 6% broker fee would add another $100,000 to the loss. Other costs would be sprinkled on top.
Schumer is reportedly moving up to a larger even nicer place more befitting for her success, also on the Upper West Side, which sold in October for over $12 million. Surely, she can laugh off a little dent like that to her finances.
But this has now become a common occurrence in the Manhattan market – as well as some of the other glory markets around the country.
As a result of a historic construction boom, new supply of high-end condos is flooding the market and will continue to flood the market for years.
This is coinciding with impeccable timing with all-around slack enthusiasm about these prices that have reached crazy levels after surging for years as part of the grander package of the magnificent Fed-engineered asset-price inflation.
And then there’s some growing disinterest from foreign buyers, after the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) expanded its program it had kicked off in January in Manhattan to identify and track secret homebuyers who hide behind shell companies. It’s making people from certain other jurisdictions nervous.
This – the construction boom, the crazy run-up in prices, and the Treasury Department’s crack-down on secret foreign buyers – has turned into the perfect trifecta to puncture the Manhattan house price bubble now happening in slow-motion before our very eyes.
At the glamorous Trump Tower in Midtown Manhattan, which has become even more glamorous now that its most famous resident has become President Elect, not all is well. Read… Is it Just Trump Tower? Or is the Entire New York City Housing Bubble Unwinding?
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