Remember long, long ago, when you frequently heard complaints about Europeans coming to New York, treating it as a weak-dollar playground. Right in front of our eyes, they were plundering our homegrown luxury goods, and supposedly even Europeans with a secretary’s salary could afford to buy a second home in Manhattan. You might have even met some of these interlopers at cocktail parties, where they could be heard bashing US foreign policy, while bragging that they only return home when the need some free dental work. Once we heard a tale of a high-end real-estate brokerage that listed all of their properties in euros, but that could have been purely apocryphal.
Here’s what the New York Times wrote last December:
Jonathan Fletcher, who works in information technology, and Aine Marshall, a dentist, came to Manhattan from London to buy a $1 million investment property. Mr. Fletcher, who is considering buying in the financial district, where he believes there is opportunity for appreciation, plans to put down his deposit money first and wait for the dollar to weaken more before paying for the entire apartment. Even if he does not buy an apartment, the savings from shopping in the United States covered the cost of the trip, he said. They spent a total of $8,000 on clothes, a camera and a $5,000 drum set that would have cost about double back home.
Foreign buyers often purchase quickly because they largely view these apartments as investments like a bond or a stock. Dorothy Somekh, a Halstead broker, said that in an afternoon a Belgian couple she represented bought a $1.7 million two-bedroom condo at the Sheffield in Midtown to rent out for about $7,500 a month. After the couple signed the contract, they headed to Abercrombie & Fitch to shop for clothes for their daughters.
Anyway, er, good news(?), that’s all coming to an end.
TheRealDeal: Sales of apartments by foreign investors are down by at least 50 per cent year to date. Industry leaders say that a number of foreigners that bought downtown are being forced to sell residences as a result of the world financial crisis. According to Melissa Cohn, president of Manhattan Mortgage, mortgage financing for foreign investors is very difficult. Commercial banks which previously provided financing to foreign investors are pulling back. Earlier this year, she said she was able to secure financing from at least 10 active lenders, but today that number is down to three or four.
Technically, this doesn’t mean that we’ll hear fewer foreign accents the next time stop in the Apple store or the Burberry store, but… well, that’s exactly what it means. When the sting of reduced commerce, lower-tax revenue and declining home values, we imagine there will be more than a few people who will regret cursing the Euro influx.
But don’t lose hope. The New York Times in 1984(!) offers this hopeful note: The Strong Dollar Means Bargains In Europe.
. At such stores as Hemispheres, the chic men’s and women’s clothing store at 1 Boulevard Emile Augier in the fashionable 16th Arrondissement, the clothes can seem like bargains. Where else, for example, can you find four-ply cashmere sweaters for $177?
Of all the stores in Paris, Hemispheres offers the most satisfyingly proper but unstuffy selection of men’s clothes, such as classic English suede zip-front jackets for $330. For women, there are the tailored women’s clothes of Peggy Roche, one of the best-kept secrets of Paris fashion. Her navy knit suits, spare, dry and dignified, sell for $300.