With so many short sales in South Florida it makes you wonder how has the downturn in the market affected the luxury home market.
There is a part of our county that you all know as Palm Beach Island. Palm Beach island is home to the worlds' biggest billionaires and movie stars. The Kennedy's even had a nuclear resistant bunker built out off the island on Peanut Island. You can take boat rides over there to see it and the Maritime museum. Donald Trump's Mara Lago is here on the island. Donald Trump and his X wife Ivana Trump have properties on the island. Jimmy Buffet and Rod Stewart both have mansions on the island.
Here is the famous Breakers Hotel on Palm Beach Island where many rich and famous people stay. This hotel is our favorite here in Palm Beach County. It is right on the beach and is listed as one of the world's top 10 beaches according to travel T.V.
This island of Palm Beach has been immune against the downturn in the market. The one area that was still in demand was the multi million dollar properties on Palm Beach Island. This area became known as bullet proof.There are only a little over 10,000 people who live on the island and only 5800 households.
Well, now it looks like a bullet may have pierced this market with the fraud permeated by Madoff on this island. With the billions of dollars lost with Madoff here on the island it remains to be seen if this is going to affect the property values on the island. I have a hunch it will.
There are some hedge fund managers that own mansions on the island and depending on how much they have lost will determine if they are going to have a fire sale on their mansions. How would you like to pick up a mansion worth $ 9 Million for about $7 million?
The other day someone went into the Madoff mansion and stole a very valuable statue of two copper lifeguards sitting on a bench valued at $10,000 from his mansion worth 9.5 Million dollars. Currently Madoff is under house arrest in his New York $7 million dollar apartment. There is a lot of anger around here towards Madoff.
Could this all mean that we may get some multi million dollar short sales on the island? Most of these people pay cash for their properties but you never know! For instance back in the spring of this year Randolf's Hearst's widow could no longer pay for the upkeep of their $30 million dollar mansion and she started to take out large loans just to pay her taxes and upkeep. The Hearst mansion was sold on the courthouse auction block for $22 million dollars.
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Copyright © 2008 By Katerina Gasset, All Rights Reserved.*Palm Beach Florida Luxury Homes- Short Sales In The Luxury Market?*
Nestor Gasset and Katerina Gasset- Realtors®, CIPS, ABR, SFR, GRI, REOS
Does nine million to seven million mean that much too the folks that have that kind of money?
Katerina, It will be interesting to see how it all plays out!
What a deal - only 22 million for the "Hearst" "Mansion". I'm bummed I missed it! Maybe the banks who end up owning such real estate could redevelop the properties as multi-family units - it would be a better use of the land, no doubt.
Jeff- That would NEVER happen on the island. This is a small island with only 10000 people. This has some of the nicest beaches in the world right here. There is one side of the road that has condos. But the condos start in the 1 millions for the ocean front side and of course for the name so there are multi family units but in the regard that you are probably thinking. There will NEVER be affordable housing on the island. This island is home to WORTH AVENUE which is the East coast version of Rodeo Drive in Los Angelas with extreme upscale shopping. The land is just a tiny spot of the world.
Katerina, "The Donald" says that most of the members of the Palm Beach Country Club are out millions a piece. One member commented, he lost 113 mil. That was about 1/3 of his total worth. Others are in for a larger % of theirs. I suspect there will be a major fall out in the PB Real Estate market from Madoffs shenanigans.
I wondered if people were going to try to get back at that guy. For many of those people I bet money is their life and when its lost there is not much else left. I can't imagine how angry his clients are! Interesting take on it affecting the real estate there...keep us posted. Happy New Year!
Its a good question regarding the effects of Madoff's ponzi scheme on local real estate. I have read a couple of articles about that here in Manhattan. It tends to be that some people had their life savings with this guy and the only real asset they have left is their co-op apartment. That being their only real asset left, they might have to sell it if they get pinched for cash.