Rich Russian millionaires are heading back to US shores to take advantage of the favourable prices of distressed sales. With the strong rubble to back up their buying power, many are taking advantage of bargain sales to increase their real estate portfolio.
Edward Mermelstein, a lawyer has arranged and handled about 300 sales for Russian clients since 2007. He said: “The way many look at the U.S. right now is that it’s a bargain.”
As apartment prices in swanky Manhattan keep falling, those with cash take advantage of the situation. Plus the Russian ruble rallied about 13 percent against the U.S. dollar from this year’s low on Feb. 17.
Since 2007 when the US real estate were at a high, prices have fallen by 30 percent and in some instances even more.
With the oil settling at around $70 a barrel many Russian are becoming comfortable with their spending.
Apartment sales in the over $10 million pool in Manhattan has fallen by a whopping 82 percent in 2008. This has brought down the average co-operative price by 29 percent since the second quarter of 2008.
Mermelstein said in the last month he had closed deals for $1 million and $3.8 million properties in New York. Some of the bids he has received commercial real estate bids in the ranges of $25 million to $50 million for the city and New Jersey which indicates there is interest in the market.
It seems that the Russian interest levels in New York and the US is similar to other parts in the world. London real estate agents have seen similar interest in the city from Russian buyers.