Manhattan Real Estate Feels a Russian Chill

(The New York TimesWho doesn’t enjoy a good yarn about Russian oligarchs who throw their fortunes at New York real estate? Take the Russian fertilizer king Dmitry Rybolovlev, who is linked to a record-breaking $88 million sale at 15 Central Park West, or the composer Igor Krutoy, who bought three apartments at the Plaza Hotel. Yet these tales of excess could soon fade into memory.

Moscow may be 4,500 miles from Manhattan, but with tensions intensifying over the annexation of Crimea, an Arctic Russian blast could chill the high-flying luxury real estate market here.

Wealthy Russians have been sinking fortunes into some of the priciest condominiums in Manhattan, including the Plaza Hotel, far left, 15 Central Park West, center, and the Marquand, at 11 East 68th Street. CreditMarilynn K. Yee/The New York Times


And some personal thoughts on the story....

This column got quite a bit of attention. Megan McArdle wrote a blog post on Bloomberg View riffing of this idea. She points out that too many foreign buyers in a market can result in a repeat of those Chinese ghost towns we have all heard about, noting, "outside of construction jobs, the ultrarich don’t add much to the city -- their apartments sit vacant for most of the year, which means they don’t generate demand for much except one-time construction jobs. String enough of those together and you’ll kill the streetscape."

I was also asked to go on Yahoo! Finance to talk about the topic. Other than looking a bit hunchback in the segment (note to self: do not lean over the anchor desk while wearing a blazer), I hopefully get the salient points across.