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Note: When BlackRock announced in May that it would be buying $15 billion of UBS's sub-prime mortgages, for some market participants it signalled the bottom of the mortgage-backed securities market. But house prices are still falling. Is US real estate still too risky? Helen Avery goes doorstepping.
IOs -- an alternative play on mortgages
WHAT DO SANDY Weill, Lloyd Blankfein and Dan Loeb have in common with a Nascar driver, Sting and a cartoonist? There is a joke in there somewhere, for sure, but the less humorous answer is: they all bought apartments in 15 Central Park West, Manhattan. Known locally as 15 CPW, it is a "place to live graciously in New York".
With 210 apartments with views of Central Park, a 14,000 square-foot gym with lap pool, 20-seat cinema, a library, 30 climate-controlled wine rooms, suites for domestic employees, a club floor with a games room, terrace and meeting room, 15 CPW is the most prestigious apartment building in Manhattan, and in the spring the building was finally ready to be lived in. With all sales completed in March last year, 15 of the condos have reportedly already been sold on to second buyers. Some of the building's most prestigious residents paid as much as $45 million for an apartment.
If there are concerns about the worst residential real estate slump in US history, they are not to be seen at 15 CPW. Nor in the rest of Manhattan. "We are not seeing the 20% increases in property value we have experienced the last several years and it is taking longer to shift property, but it's not a downturn yet," says a Manhattan real estate broker. She says the prices of condominiums in New York City are rising at about 5%. But nor are declines visible in the prices of single-family homes prices in the surrounding suburbs.
Denial of a housing crisis on Wall Street is less common than it was five months ago but there are still those who appear oblivious. "Oh yes, the real estate market in the US has really tanked but it's not as serious as it's being portrayed," says a Wall Street banker. Maybe he should hop on the ferry and take the 15-minute trip across the Hudson...