Recently, in a number of luxury neighborhoods in New York, homes are staying on the market longer and sales are falling. This affects even the wealthiest Americans, who are unable to exit their investment without losses.
For example, Sonia Morgan, the ex-wife of John Adams Morgan, great-grandson of the founder of J.P. Morgan Chase, since way back in 2008, has been trying to sell his five-story building on the Upper East Side. The property is built of brownstone and has six bathrooms. This forces her to sell the property by auction today. Its starting price is 1.75 million USD. This is a far cry from the USD 9.1 million bid announced in 2008.
Luxury real estate listings that contain "Million Dollar Listing" or "Buying a bargain property in Beverly Hills" often portray selling high-end homes as easy. However, even with an elite zip code and the pedigree of a famous or wealthy seller, closing a deal can prove difficult. Michael Jordan, for example, was unable to sell his mansion outside of Chicago for more than 11 years.
The crux of the problem is that the more expensive a home is, the fewer potential buyers there are — this is a worrying scenario against the background of slowing demand and growing economic uncertainty in the US, writes the American publication Businessinsider. The lack of demand from traditional buyers has led to a growing number of ultra-wealthy homeowners, including Florida Gov. Ron DeSantis, renting out their homes or selling them at auction rather than waiting for buyers.
Many luxury real estate clients may already have a primary home, so they are likely looking for a new investment rather than a place to live permanently. "As a result, while typically less affected by high mortgage rates, customers are strongly affected by the overall economic outlook," said StreetEasy Senior Economist Lee.
This is partly why more luxury property buyers are considering renting out their homes instead of selling them.
Lee pointed to another obstacle for luxury homeowners -- their tendency to customize their homes with features that may or may not appeal to the average buyer.
„Many houses and apartments in New York were built before the war. "For this reason, it's common for many homeowners to go through renovations to make it more livable and more to their taste," adds Lee.
Another factor contributing to the difficulty of selling luxury properties is the high costs associated with their maintenance.
You can see detailed statistics on average property prices in Bulgaria by cities and neighborhoods HERE