Is 520 Park’s $130M listing a sign of a bubble?

Either way analysts say the Fed is to blame

TRD New York /
Sep.September 27, 2014 10:00 AM

This week news broke that the penthouse of the yet-to-be-built tower at 520 Park Avenue is asking $130 million — the most expensive ask for a New York apartment ever. And for some, the milestone reflects smart policy from the Federal Reserve. Others disagree.

In recent years, the Fed has eased measures, decreased interest rates and increased asset prices, which is big boon to the wealthy and makes borrowing money less onerous, according to CNBC and Yahoo Finance.

“Global QE [or “quantitative easing”] and the debasement of global currencies increases the demand for hard assets, and NYC real estate is an easy way to park a lot of money in a hard asset,” Peter Boockvar of the Lindsey Group wrote to CNBC.

However, analysts like Marc Faber see the super pricey listing as a sign that stocks will soon crash.

Faber argues that Manhattan real estate, like art and collectibles, has become expensive recently for the wrong reasons. For Faber, high prices are a consequence of the Fed’s easy-money policies, and not a sign of improving economic fundamentals. And as the Fed pulls back on these measures, stock prices are likely to collapse, Faber says. [Yahoo Finance & CNBC]Christopher Cameron


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