Robert Frank is CNBC’s reporter covering the ultra-wealthy. He had a story in the New York Times late last week looking at the record number (27, if you go by official numbers, or 40-50 including the properties for sale informally) of nine-figure homes listed around the world. That figure is more than twice the number listed in 2014 which, it turns out, was the peak of the ultra-luxury real estate market
The last time a sudden pop in $100 million-plus listings occurred was in 2007 and 2008, just before the housing crash. In 2008, at least four homes in the world listed for nine figures. Only one ended up selling for close to that. A mansion in Palm Beach owned by Donald Trump and listed for $100 million sold for $95 million.
It turns out that home was bought by Dmitry Rybolovlev who also happened to be a major buyer of eight and nine figure art at the time. That raises an important question: are both markets responding to an underlying retreat of buying power?
Interestingly, Frank doesn’t think so. Instead, he suggests that 2014’s peak, where five of the 15 $100m homes sold in the previous half decade, was spike but not a bubble. Quoting Dan Conn of Christie’s International Realty, Frank sees a market where trophy properties continue to transact:
Brokers promoting the listings say their properties are one-of-a-kind masterpieces — like Picassos or Modiglianis — that rarely come on the market. They add that the more than 1,800 billionaires in the world see property as a safer store of wealth than stocks or art. Mr. Conn estimates that of the 27 nine-figure listings, a third will sell for under $100 million, a third will sell for around $100 million and a third for far more.
A Worrisome Pileup of $100 Million Homes (NYTimes.com)