The Real Deal New York

Does a glut of $100M+ properties portend a bubble?

There are a record number of high-priced homes on the market, and they aren’t selling

May 29, 2016 11:00AM

220 Central Park South

Rendering of 220 Central Park South in Midtown (credit: Vornado via Curbed)

From the “Le Palais Bulles” in the South of France, to a $350 million penthouse in Monaco, to a $250 million spread at 220 Central Park South, the are more properties listed above the $100 million mark than ever before. And that poses a problem.

A record 27 properties with nine-figure prices are officially for sale, according to Christie’s International Real Estate. Last year, there were 19 homes with similar asking prices and about a dozen in 2014. And according to the New York Times, if you added “whisper listings,” the actual number of nine-figure listings worldwide could top 50.

“When you have a record number of homes for sale at a price point of $100 million or more, that tells you these homes aren’t selling,” Jonathan Miller, president of Miller Samuel Inc., told the Times. “It’s not as deep a market as some might hope.”

According to Christie’s, only two homes sold for over $100 million last year: a 9,455-square-foot house in Hong Kong purchased for $193 million by Jack Ma, the chief of Alibaba, and a $132 million townhouse in London. Two other nine-figure listings sold last year (a $700 million Texas ranch and a $100 million home in Dallas), but the actual sale prices were not disclosed.

To many, this looks like a bubble that could soon burst. But many in the industry remain hopeful.

“I don’t think it’s a sign of a bubble,” Dan Conn, chief executive of Christie’s International Real Estate, told the Times. “It’s a sign of growing wealth in the world and the quality of some of the new construction.”

Still, even below the $100 million price mark, the market for luxury homes is on the decline, according to a Real Deal analysis. Luxury sales volume is down a stomach-churning 25 percent in the first 20 weeks of 2016 compared to the same period last year. Just 449 contracts at or above $4 million were signed so far this year, compared to 597 in the first 20 weeks of 2015, and 552 in 2014. [NYT]Christopher Cameron

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