Following the Money in Residential Real Estate

on May8
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Nearly half the money spent on residential real estate in Manhattan during the first quarter of 2019 (45.4 percent, to be exact) was spent on the most expensive homes — those that sold for more than $4 million — according to information collected by Jonathan J. Miller, president of the appraisal firm Miller Samuel.

As for the most affordable homes — those priced under $1 million — only 14.5 percent of the money spent on real estate went toward buying them.

That might not seem surprising, but rewind to the third quarter of 2001 and you’ll find that ratio nearly inverted: 14 percent of the money spent went toward properties over $4 million, while 42 percent went to those under $1 million. (The share spent on homes in the middle, between $1 million and $4 million, has remained relatively unchanged.)

Why the huge growth at the top? Simply put, the high cost of land combined with easily available capital made building anything but the highest-end properties unappealing to investors and developers, said Mr. Miller, who began charting the dollar distribution among these price ranges in the days following the Sept. 11 attacks, anticipating that the event might affect the market.

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