WEBVTT - Perspectives on Luxury Real Estate

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<v Speaker 1>These sees Bloomberg Business Week with Carol Messer and Tim

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<v Speaker 1>Stenovic on Bloomberg Radio. So a story in the Bloomberg

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<v Speaker 1>that caught my attention. It noted how we have seen

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<v Speaker 1>about three point eight billion in net outflows from global

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<v Speaker 1>real estate ETFs in the past year. That includes almost

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<v Speaker 1>four hundred and seventy million dollars in the past week alone.

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<v Speaker 1>Funds focused on the US and Europe, across a range

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<v Speaker 1>of real estate investing styles all saw outflows. Meantime, last month,

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<v Speaker 1>you might recall how Bloomberg News reported on how we

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<v Speaker 1>are seeing a shift when it comes to the most

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<v Speaker 1>expensive areas to buy a home in the US, shifting

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<v Speaker 1>increasingly from New York City to Florida big times. So

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<v Speaker 1>we wanted to get that big, bold perspective and with

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<v Speaker 1>what she is seeing when it comes to global residential

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<v Speaker 1>real estate with us. As Bonnie stone Seller, she's the

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<v Speaker 1>co founder and chair of Forbes Global Properties. She joins

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<v Speaker 1>us via zoom from Jupiter, Florida. Bonnie, nice to have

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<v Speaker 1>you here on Bloomberg. How are you hi, Carol, So

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<v Speaker 1>nice to be here. Thank you well. Tell us about

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<v Speaker 1>your firm. First of all, just at the tone in

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<v Speaker 1>terms of you guys are a consortum of real estate firms,

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<v Speaker 1>right we are. We're a global platform and a membership

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<v Speaker 1>network of elite brokerages around the world that showcase and

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<v Speaker 1>sell the finest properties and homes around the world. We

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<v Speaker 1>have about thirteen thousand member agents. We're in twenty two countries,

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<v Speaker 1>four hundred forty locations, and you get and you tend

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<v Speaker 1>to be high end right, two million plus properties. So

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<v Speaker 1>that's what you're dealing with. Tell me what you, Bonnie,

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<v Speaker 1>are seeing globally, what's hot, what's not well? To start with,

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<v Speaker 1>what we saw in twenty twenty two, as evidenced in

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<v Speaker 1>our report that we just issued last month, is that

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<v Speaker 1>prices have remained high despite the fact that there's a

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<v Speaker 1>slowdown in the volume of sales. We're seeing a shortage

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<v Speaker 1>of supply and that's both ferring the prices. And it's

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<v Speaker 1>true that there are new places where the top, where

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<v Speaker 1>the top sales are arising. In fact, pomp Beach had

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<v Speaker 1>the highest price sale in twenty twenty two at one

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<v Speaker 1>hundred and seventy three million, So the price is still high.

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<v Speaker 1>Slow down and sales, it makes sense, right if there

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<v Speaker 1>are not enough properties coming out of the market basic

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<v Speaker 1>supplying demand, you're going to see those prices stay high.

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<v Speaker 1>But it's also ultimately because the supplies in there, it's

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<v Speaker 1>going to bring down the volume. Do you see any

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<v Speaker 1>of that changing anytime soon? Well, I mean if you

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<v Speaker 1>just kind of look at the trophy sales in twenty

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<v Speaker 1>twenty two, I think you would say that we wouldn't

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<v Speaker 1>see that changing soon. The top twenty the top twenty

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<v Speaker 1>five sales in twenty twenty two range from seventy three

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<v Speaker 1>million to one hundred seventy three million. These were higher

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<v Speaker 1>prices in many locations than we've ever seen before, and

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<v Speaker 1>many of these are purchased by people where a softer

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<v Speaker 1>economy a higher interest rate will have no effect. Well,

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<v Speaker 1>there's all tell me how those deals are done? Is

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<v Speaker 1>it a stupid question? Is there ash deals or how

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<v Speaker 1>was it done? All cash deals? Yes? It is all cash.

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<v Speaker 1>So who's typically buying that? Well, the billionaires around the world.

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<v Speaker 1>Just read Forbes and you'll see who they are. The

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<v Speaker 1>billionaires around the world. You know, by all of the

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<v Speaker 1>homes this year, the more than fifty percent were in

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<v Speaker 1>the United States. I think partially that's because the international

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<v Speaker 1>buyers are weren't as fluid during COVID as we hope

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<v Speaker 1>they will be in twenty twenty three. Tell me about

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<v Speaker 1>so all right, you said about fifty percent. We're in

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<v Speaker 1>the United States, so that was US buyers buy US properties. Well,

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<v Speaker 1>there are a couple of cities in the world, in

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<v Speaker 1>particular say Miami or Dubai, where there were strong international buyers,

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<v Speaker 1>but yes, mostly US buyers in the United States. And

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<v Speaker 1>just to put a fine point on it, kind of interesting,

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<v Speaker 1>but South Florida had the most top trophies in the

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<v Speaker 1>United States and that was followed by Los Angeles, and

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<v Speaker 1>then it didn't happen until we got to Hong Kong

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<v Speaker 1>that we had an international city in the top three

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<v Speaker 1>of the top sales trophy sales. That's interesting, you know,

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<v Speaker 1>and it mirrors a story that we put out about

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<v Speaker 1>mid February to talked about Miami Star Island and we're

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<v Speaker 1>talking about from Shaquille O'Neill to Rosio Donald very exclusive enclave.

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<v Speaker 1>And yet this is why where you're seeing some of

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<v Speaker 1>the top sales happening in the United States and kind

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<v Speaker 1>of a shift away from still New York very pricey,

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<v Speaker 1>no doubt about it. But you're seeing increasingly Florida as

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<v Speaker 1>you see more of financial professionals and just everybody seemed

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<v Speaker 1>to move down. What is it that's going on in Florida?

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<v Speaker 1>Is it like, what are you seeing in the time

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<v Speaker 1>that you've done this how many years? Is there something

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<v Speaker 1>really distinct going on in Florida right now? Well? I

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<v Speaker 1>wouldn't think. I think there's anything in particular about Florida

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<v Speaker 1>other than the that there were no taxes here. Yeah,

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<v Speaker 1>but that's not new, right right, that's not new. But

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<v Speaker 1>I would suggest that a lot of the amenities that

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<v Speaker 1>the top buyers are looking for happen to be found

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<v Speaker 1>in homes here, and those amenities number one for twenty

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<v Speaker 1>twenty two based on our research, or outdoor space. It

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<v Speaker 1>turns out that people are now investing in entertaining again

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<v Speaker 1>and being with other people, and they want that outdoor

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<v Speaker 1>space and a lot of it with which to interact.

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<v Speaker 1>The second item is being close to amenities that they

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<v Speaker 1>like to spend time with. Vacation where you live and

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<v Speaker 1>the beach in Florida is a strong factor as well. Bonnie,

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<v Speaker 1>tell me what other global cities are pretty hot at

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<v Speaker 1>this point? Yeah, So I mentioned South Florida, and that

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<v Speaker 1>was followed by Los Angeles and the third being Hong Kong.

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<v Speaker 1>But other important cities where we're seeing a lot of

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<v Speaker 1>top sales are always New York is in the list,

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<v Speaker 1>Always London is in the list. And Dubai has crept

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<v Speaker 1>up this year. In fact, Dubai has broken every record

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<v Speaker 1>that it's ever had this year. Who's buying? Who's buying

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<v Speaker 1>in Dubai? Is it again domestic buyers or Middle Eastern

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<v Speaker 1>buyers or others. I'm going to say others. A lot

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<v Speaker 1>of the turmoil in the world has sent people to Dubai.

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<v Speaker 1>Interesting in terms of non US buyers. You know, with

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<v Speaker 1>the Russian war in Ukraine, we've talked a lot about

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<v Speaker 1>Russian oligarchs over the last year. With uncertainty about the

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<v Speaker 1>Chinese economy, they came out with a new growth forecast.

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<v Speaker 1>It's disappointing. You know, we've talked about Asian buyers a

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<v Speaker 1>lot over the last year. What can you tell us

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<v Speaker 1>about buyers from Asia buyers from Russia. I would say

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<v Speaker 1>that there's been a slowdown because of COVID of all

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<v Speaker 1>the international buyers. And also think about this, the dollar

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<v Speaker 1>has been so strong that international buyers have been a

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<v Speaker 1>little bit off put by how much more expensive everything is.

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<v Speaker 1>But we're hoping to see a change in twenty twenty three,

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<v Speaker 1>as we're seeing say in New York and in Miami

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<v Speaker 1>and other places, the international buyer and Australia, for example,

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<v Speaker 1>the international buyers are beginning to come back. And just

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<v Speaker 1>quickly got fifteen seconds. No slowing down. The trends that

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<v Speaker 1>you're seeing are continuing here in twenty twenty three. No

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<v Speaker 1>slowing down in prices, definitely continued slowdown in volume of sales. Okay,

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<v Speaker 1>good to know because you did talk about this supply

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<v Speaker 1>demand being out of balance there, Bonnie, thank you so much.

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<v Speaker 1>Great conversation, Bonnie stone Seller. She's co founder in shair

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<v Speaker 1>of Forbes Global Properties. As we said, a consortium of

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<v Speaker 1>real estate firms, global real estate firms with a great

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<v Speaker 1>vantage point at what's going on in global real estate,

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<v Speaker 1>especially as she said, two million plus. But you're talking

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<v Speaker 1>about some pretty high end properties. You are listening in

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<v Speaker 1>watching Bloomberg Business Week. I'm Carol Masser, and this is

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<v Speaker 1>Bloomberg Radio.