“Silly season” is late summer, and April Fool's is still three weeks away, but Bloomberg and Vanity Fair have published tales of distress among vendors to the ultra-high-net-worth crowd. A Manhattan apartment found no takers at $45 million, so the developers have split it into three units at better price points. The aggregate price is the same -- $6,000 per square foot. Roughly thirty times the per-square-foot cost of an ordinary detached home. This is not an elitist joke. Believe it or not, there are two serious aspects to stories like this. The first is the state of the world, and the second the state of a neighborhood possibly close to yours. The state of the world The world outside the U.S. is a mess. Different messes in different corners, but the most common problem ov...
- Internationally, "devaluation" is everywhere, and it's a good reason to get your money out of there and over here.
- The state of the top of the housing market is an important local indicator.
- The ongoing housing recovery, at last mostly free of distressed sales, is appreciating bottom-up, little or no froth at the top.
- Jumbo mortgages are in an anti-bubble. Jumbo underwriting is far tougher on credit, income, income stability and appraisal.