Bubble Wrap: September 2009

O Stuy Town!

The Observer looks at the Stuy Town sale to Tishman Speyer as a possible stroke of good fortune for tenants of the mega-complex as their bid to buy the property was rejected three years ago.

In a new twist, it’s now at least conceivable that the tenants—along with other former bidders—might just have another crack at Stuy Town, this time at presumably a much less inflated price. Tishman Speyer is on pace, before the end of the year, to exhaust the reserve fund that has been helping it to make debt payments, as Realpoint reported the fund had just $33 million left as of September, down from $400 million in 2007. Since June, the report said that between $7 million and $19 million has been taken out of the reserve fund each month.

Madoff's Estate Sales

While The Observer reports on the recent selection of two Sotehby’s brokers to handle the sale of Madoff’s Upper East Side Penthouse, and The Real Deal reports on two Corcoran brokers chosen to market his Palm Beach home, The Post gets word on a flurry of activity on his Montauk beach house, which has been on the market for just over a week.

Bernie Madoff’s Montauk beach house has at least four offers. And there are so many more interested buyers in the Ponzi putz’s $8.75 million listing that Corcoran Group broker Joan Hegner, who shares the listing with her husband, Raymond, is already having the busiest September of her life.

The new estates on the block

The Star Ledger reports on the growing trend in New Jersey of luxury properties being put on the auction block to attract buyers, with one mansion, Froh Heim, being auctioned to the highest bidder after being on the market for $8.9 million. According to the Otteau Valuation Group, inventory of properties priced above $2.5 million is 3 times the state average, making it an attractive category for auctions.

“There’s no question that the level of inquiries increased with respect to luxury homes—sellers seeking an alternative way of marketing,” said Jeff Hubbard, an executive vice president of Sheldon Good & Co. Auctions Northeast, in Manhattan. “In the luxury-homes segment, you will probably see it increase 30, 40 percent next year.”

Deeds & Don'ts

Hamptons Cottages and Gardens looks at the mixed real estate market with pockets of activity entering into the Fall. Brokers are optimistic, but with prices not clearly going in one direction or the other, buyers are taking their time and looking at more properties than ever.

The current debate among buyers—and sellers—is what is market value is these days. Will it recover to old highs set in 2007 or will prices linger for a couple of years until the next big upturn—or downturn occurs? Those who still persist in overpricing their properties are ignoring world events.

Some pundits feel that significant appreciation is a long way off. Others are all too eager to see price spikes spiral upwards.