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Minyan Mailbag -NYC Real Estate

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Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.

Toddo,

New thesis. There is no "native" real estate bubble. Looking back at random in a New York magazine from this summer it became clear what is going on. Of the buyers this summer, over 15% alone were Russian. A significant portion from the UK or EU countries.

So that's where foreign flows are coming from bro. For these folks with either new found wealth or a very strong currency buying NYC real estate is a good hedge and a relative bargain. If you could buy a 2 million dollar home for 1.3 million, you would wouldn't you?

The trick of course is what happens in a correction. Most likely for these folks that would come with a currency correction in their favor, the U.S. dollar appreciates while prices drop leaving them net/net in ok shape. Essentially neutral. Waiting out any such correction they've likely bagged a good bargain.

The impact for locals of course is higher than normal prices due to this demand. I wondered how NYC was producing so many millionaires locally with a relatively moribund economy. Turns out we are importing them.

Minyan Bryan McCormick

MB-

Interesting perspective and thanks, as always, for taking the time to share.

Toddo


R.P.

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No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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