Luxury urban market starting to pick up.

The past two years have been nothing short of 'interesting'. The middle of 2009 (June/July/August) saw a surge of buying in the 300K and below segment. This was perceived as deals since the overall price points started to come in line with commonly used rental equations. Thus the cash on cash return was starting to get very attractive to investors and second home buyers who initially wanted to use the property as a investment vehicle since their paper investments were not performing. The luxury market, say 500K and above has been ice cold for the past 18 months and once you get into the super luxury estates or condos, that market doesn't exist today since there really are no buyers (at least in volume). An argument could be made that the luxury market could 'hang on' longer since they had more resources (money) to wait out the recession. Well it appears they can wait no longer. We are seeing distressed properties in form of short sales and foreclosures creeping into this market which in turn is attracting speculative investors. Six months ago there wasn't hardly any inquiries into luxury condos since most people were pulling their horns in to weather the storm. Now it appears that consumer sentiment is getting better, investments are performing, people are feeling more confident and thus demand for luxury distressed properties is starting to increase. I would have to say we've had 75% increase in the amount of inquiries in the luxury market over the past three months. Since the holidays that we've seen that figure probably double. I believe 2010 will be a year with allot of activity in the luxury market with a majority of it being speculative investors and move down buyers. The unfortunate part of this story is it's all based upon distressed property which means someones hardship will become someones opportunity. M.