MarketWatch: Weekly Real Estate Update for Riverdale, Bronx – 5/29/2023 – 6/5/2023

Did You Know?

In Europe, the luxury industry took off over the past decade and had its best years ever during the pandemic. Record stimulus added trillions in new wealth, much of it in the hands of the very rich, who spent a good chunk of it on high-end goods. The luxury industry – fueled by LUXE-flation – has been ruled for centuries by Europe with about 66% of global luxury sales revenues flowing to Europe. 40% of Europe’s TOP 10 companies are LVMH, L’Oreal, Hermes and Dior. Hermès now has margins over 40% up from 25% in 2010 and above that of even Microsoft.  Luxury companies serve a clientele that is increasingly price-insensitive. The price of a Chanel handbag has doubled over the past 5 years to about $10,000. (FT)

Water resources in Europe are growing increasingly scarce because of the deepening climate emergency, with record-breaking temperatures through spring and a historic winter heatwave taking a visible toll on the region’s rivers and ski slopes. Reservoirs in Mediterranean countries like Italy have fallen to water levels typically associated with summer heatwaves in recent weeks, threatening agricultural production, while protests have broken out over water shortages in both France and Spain. (CNBC)

U.S. regulators are preparing to force large banks to shore up their financial footing, moves they say will help boost the resilience of the system after a spate of midsize bank failures this year. The changes could raise overall capital requirements by roughly 20% at larger banks on average. (WSJ)

In Greenwich CT, Bill Andruss shares that year-to-date, there have been only 175 single-family sales in the first 5 months of 2023 vs. 263 for the same period of 2022 – a 33% decrease……and inventory is HALF that of 2021. The lack of inventory is becoming a global issue, especially in highly desirable locations where demand far outstrips supply! 

Uninsurable? Insurance companies are not charities: they exist to make profits. Building and replacement costs have soared in recent years making insuring anything – especially homes in higher risk areas – much more expensive. Insurance fraud has pushed rates up too. Now in several parts of the country, insurance companies are withdrawing completely. State Farm recently publicized what other insurance companies have been doing quietly for several years by refusing to renew policies and pulling out of communities at risk for wildfires. (LA Times)

While family offices still have almost half of their assets in North America, over a quarter are planning to increase allocations in Western Europe over the coming five years and almost a third are planning to raise and broaden their allocations in the wider Asia-Pacific region. (UBS)

Pickleball is the hottest, fastest growing sport in the US. But it comes with some quality-of-life challenges for neighbors as it relates to noise…. not unlike tennis balls, pickleballs make a sound. When the hard surface of the pickleball racket connects with the hard surface of the ball, sound waves vibrate rapidly, registering a decibel level of ~70 dBA at 100 ft from the court. (Tennis is closer to 40 dBA.) which is not far from the noise generated by a vacuum cleaner.  Unetich found that using softer plastic balls can drop 1-3 dBA from the average sound of a pickleball match, and thicker paddles with softer faces can be up to 7 dBA quieter than typical models.  (YALE)

Courtesy of Melora Love, Wells Fargo