Sales of luxury homes have slowed faster than those of lower-end homes. The value of cryptocurrencies, tech stocks and proptech plummeted. Is the economic slowdown impacting wealthy buyers more?
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we all housing recession; Here’s the new one: “Rich Sessions”.
Many people who benefited from the raging economy and housing market, and whose net worths skyrocketed thanks to tech salaries, tech stocks, cryptocurrencies, and more, soon saw their worth shrink.
It’s a “rich session”. wall street journal which has already been hit in many ways, including the luxury real estate market.
Several recent reports and agents specializing in luxury real estate say they are already seeing the ongoing recession impacting sales.
Aaron Kerman | Christie’s International Real Estate
“I had a need to sell a house that was heavily crypto-heavy and I have had multiple people willing to sell their homes at deep discounts to get cash off the books. ”said Aaron Kirman. leading luxury agent With Christie’s International Real Estate in Los Angeles.
new term coined by wall street journal It explores the impact of the economic and housing slowdown in recent months on high-income Americans.
The outlet reported that the gap between the rich and the poor has narrowed since the start of the COVID-19 pandemic, and that this gap may continue as high-paying companies shrink their workforces.
Many of the layoffs that have already taken place are among high-paying tech companies (contains a number so-called “proptech” companies that bridge the gap between technology and real estate).
Facebook’s parent company, Meta, laid off 11,000 jobs in the fall (roughly 13% of its global workforce). Microsoft laid off about 10,000 people. Amazon dropped 18,000.
collect, Forbes quote The number of layoffs at tech companies, often with high salaries, is close to 150,000.
Prices of assets such as technology stocks, cryptocurrencies Non-fungible token It surged in 2020 and 2021 and then plummeted in 2022, impacting a huge source of wealth used to buy luxury homes.
On the other hand, low-income earners are generally understaffed. in particular, WSJMore There are currently around 1 million more open vacancies in the leisure and hospitality industry than there were before the pandemic, according to reports.
Several reports seem to confirm that the luxury market has been hit harder than others during the so-called ‘housing recession’. Red-hot first year of COVID.
Home sales in the top third of the market fell 25% from August to November 2022 compared to the same period last year. WSJMore Reported citing data from Zillow. The bottom third was down 11%.
A new report from UrbanDigs, which provides market data for New York City, found a “significant” decline in the number of homes priced above $4 million.
“the current [contract signings] It seems that the level of luxury properties is close [the] A low end of historical activity,” the report reads, “suggesting that trading volume may have already bottomed out.”
Contact signatures are still above 2019 levels, but well below the last two years. Pending luxury goods sales in Manhattan are at their lowest level in five years.
Luxury brands are fading while a handful of discount and cheaper stores are attracting wealthier customers.he WSJMore I got it.
“The surge in the value of speculative assets such as tech stocks and cryptocurrencies in 2020 and 2021 has made it less difficult for wealthy homebuyers to splash out on homes and vacation properties.” WSJMore report“But right now the housing market reflects the financial pressures facing these kinds of buyers.”
Kirman said of ultra-luxury homes:I’m talking about the $100 million+ crazy stuff.
“There was this guy in the tech industry whose stocks crashed and he was forced to sell,” Carman said. “It’s a really weird and volatile moment that I think everyone has a hard time defining. “
There may be new words that help define it.
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