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NYC's Luxury Apartment Bubble Bursts

There's now a glut of pricey listings on the market

By Kristina Loew, Newser User

Posted Oct 8, 2008 8:15 PM CDT

(Newser) – New York’s top real estate agents subscribed to an 8-word mantra last year, the New York Observer notes: So many eager buyers, so few trophy properties. But 2008 has brought a dose of cold reality. More than 168 luxury apartments and townhouses are on the market, dozens more than just 6 months ago and more than twice the number of 2 years ago.

“Last year, New York co-op sales were up 50%; condo sales, 66.5%,” says a broker. “Maybe ’07 was not economic reality.” With buyers trying to flip properties for triple the purchase price, the boom created a bubble that was breathtaking—and bound to burst. Many of Manhattan's most expensive addresses are still on the market. “Apartments asking $15 million are meant to be devoured, not ignored,” says a deflated observer.

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File photo from Christopher Vika (http://www.shutterstock.com/pic-1869850-two-buildings-in-new-york.html)

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One of the reasons we are so deceived by bubbles is the same reason that we are deceived by professional magicians.
- Yale economist Robert Shiller in his book "Irrational Exuberance"

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NYC's Luxury Apartment Bubble Bursts