Luxe Redux: New York's high-end home buyer return

Last spring, the New York real estate agent James Keogh and his wife wanted to move closer to the sea. The couple, who brought his four children and a 13-year-old dog with them, sold his 2,450 square foot with four bedrooms in East Hampton, Long Island, for $ 1.6 million and exchanged it for a 4,500 square foot in the nearby amagan for $ 2.2 million.

to make the trade that was closed in May 2021, Keogh turned to act about cryptocurrency, with which he had started about 18 months earlier. After paying the capital gains tax, he used his Ethereum profits for 50 percent of the down payment of the new house, which corresponds to hundreds of thousands of dollars.

"So that I can make a deposit while my whole money is in my other house, I had to go [other] places," he says. So he turned to his digital wallet.

and Keogh is not alone. Several brokerage companies with which the FT spoke reported on an increase in buyers who want to benefit from their cryptocurrency profits.

"[LAST YEAR] We saw the emergence of [the] super-rich crypto buyer," says Garrett Derderian, Director of Market Intelligence at Brokerage Serhanhant. He calls buildings like the 432 Park Avenue in Manhattan's so-called Billionaire’s Row as an example of a building that is popular with crypto buyers.

Shaun Osher, managing director of the brokerage company Core, quotes Rose Hill, a new development in the nomad district of Manhattan, as popular with buyers who made a package with crypto investments and sometimes bought units over $ 20 million. "You want sexy, high ceilings, incredible views [and] great amenities," he says. "Some still lived in a one-room apartment two or three years ago" and are now looking for apartments with "wow effect".

"You want something that nobody can have. You want something big - you want a penthouse," says broker Ryan Serhanant, who claims to have been addressed by about a dozen cryptocurrency investors who would not qualify for traditional loans.

broker Tal Alexander says that he was also contacted by buyers who wanted to spend their cryptocurrency gains for houses in Miami. While most investors first convert their cryptocurrency into cash (a transaction that is subject to capital gains tax) and then traditionally structured purchases, Miami-whose NBA team plays in an arena that is named after the FTX cryptocurrency-is directly accepting the home of luxury developments. A penthouse near Arte, a building in Surfside, sold its lower penthouse last May for $ 22.5 million in a pure cryptocurrency business, and the developers say that they will accept it for future projects.

Owner of cryptocurrencies, however, could begin to question the profitability of their portfolios - and the potential to convert them into hard assets: the price of Bitcoin fell by about 30 percent last year, also Ethereum.

Keogh could have sold his house at the right time - to a lawyer for digital assets.

Although the number of buyers of cryptocurrencies is still very low, this is a strange development for the luxury property market in the New York City area, whose assets have changed since the pandemic. The industry was in a doldrum two years ago. Newly developed apartments, often worth several ten million dollars, slrewed on the market and sometimes remained unsuccessful for years after completion.

In the past few months, when the city has recovered from the blow, which was inflicted by the Covid 19 pandemic, demand has exploded-especially after luxury real estate in Manhattan and Brookly.

In January, 102 new contracts for Manhattan's luxury property were signed-those with a price of $ 4 million or more-twice as many as in January 2020. According to a report by broker Douglas Elliman, the amount that was issued last year for the city's luxury real estate was the highest annual total for more than a decade-and almost twice as much as in the year 2020.

According to a study by Serhann, more houses were sold for over $ 10 million last year than in 2019 and 2020. "I have never seen such a lack of quality inventory in the main markets," says Serhan-broker Chase Landow. The offer is so scarce, he says that his customers make compromises in amenities such as private outdoor and gatekeepers.

Nancy Wu, economist at the Real Estate Portal Streeteasy, simply attributes the rejuvenation of the luxury market to "the people".

But that is not the case everywhere, says Wu. "We see that the prices fall at the lower end of the market", because it is the homeowners who are "financially affected by pandemic". You have no digital wallets that you can fall back on.

Shivon Duncan's parents who emigrated from Grenada half a century ago taught her the importance of your home, and since her youth it has been her dream to have a condominium. She wanted a home in a building with amenities, but with rising prices. "It is how, what do you do?" She asks.

In the quarter of Mill Basin in Brooklyn, she found exactly what she was looking for. Duncan, who works in the city's public hospital system, bought a one-room owner apartment with a garage and driveway for $ 280,000 in November. She is now looking around and sees young people who need double earners households to live comfortably-they can't do it alone. And she also needed help.

Duncan applied for the HomeFirst-Federal Aid Program of the New York City Department of Housing Preservation and Development, which provides up to $ 100,000 for the down payment or final costs for qualified buyers. "In my opinion, it would not have been possible without this help," she says.

New York City has a well -known affordability crisis, but pandemic has put further obstacles in the way of residential property. "People who lost their job had to move out of the city or their houses forced," says Wu. A larger offer in this market level leads to lower prices if the demand is not that large.

Queens was hit particularly hard by this reality-in the 12 months to January, the district's average offer price fell by 5.7 percent to $ 584,000, the lowest level since 2016.

Neighborhood Housing Service of New York City, a non -profit organization that offers people with low to medium -sized income, offers credit services and education to residential property, usually helps 100 to 150 people annually when buying a home, says CEO Derrick Griggs. In 2021, this number fell to less than 25, since customers lost jobs during the pandemic and accepted loan losses.

Before Covid, banks accepted debt income of around 45 percent if they were considering mortgages, says Dan Martin, Managing Director of NYC Housing Partnership, another non-profit organization. Since the banks did not want to take any additional risk during the pandemic, they lowered the acceptable relationship to 40 percent and excluded many potential buyers.

In Queens, investors buy houses in quarter with low to medium-sized incomes and displace communities by suggesting homeowners that the sale is financially financially, says Yoselin Genaoestrella, Managing Director of Neighborhood Housing Services in the district.

Homeowners in the Astoria district in Queens recently reported to their MPs in the State Council, Zohran K. Mamdani, exploding energy and care calculations that "force the Astorians to ask themselves whether they can afford to stay in their houses and in our neighborhood," he says.

The New Yorkers of the working class have been fighting for decades with the market power of gentrification that is pushing them out of their houses. It could be more difficult to stick to them because this pandeme -related economic pressure.

Steff Chávez in a correspondent from FT Chicago

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