The market for real estate costing $10 million or more has been flooded just as market turmoil and government regulation have discouraged wealthy buyers.
Even with every conceivable amenity, the eight- and nine-digit prices attached to trophy homes with helicopter views and high-end finishes never bore much relation to actual value. Rather, a class of superrich investors primarily drove the market, choosing high-priced real estate as their asset of choice, because it was less volatile than other investments and they could use shell companies to hide their identities.
But today a four-year construction boom aimed at buyers willing to spend $10 million or more has flooded the top of the market just as global market turmoil has caused wealthy investors to pull back and the federal government has moved to scrutinize some all-cash transactions….
…In the Miami area, 216 homes and condos priced at $10 million were on the market at the end of June, a 43 percent jump from a year ago, according to data compiled by Esslinger-Wooten-Maxwell Realtors. “By anyone’s measurement, that’s more than you’d like to have,” said Ron Shuffield, president of that firm, pointing out that only 26 houses and condos in that price range sold in the 12 months through June.
“The global misperception was that the demand would be endless,” said Jonathan J. Miller, president of Miller Samuel, a real estate appraisal firm. “The reality was the market was not as deep as what was thought.”