It’s not always easy being a luxury home owner, especially if you’re one of many hot young tech entrepreneurs whose company’s stock has lost its luster not long after closing.
Such is the case for a number of new company owners who come out of Silicon Valley, or New York, or elsewhere, with the internet’s next shiny object of investor affection.
Take for example the founder of monthly dinner subscription Blue Apron, who last year bought a Manhattan apartment on Madison Avenue for a little under 9$ million, according to Mansion Global.
That seemed like a smart buy for Matthew Salzberg when his company’s stock hit the market at $10. As of this writing, the stock is barely trading at $3.00/share.
Of course, we don’t know if Mr. Salzberg is at all worried about his purchase, but it nonetheless under-scores how tenuous a rapid rise to wealth can make a person’s financial standing.
Luxury home buying is taking on an entirely new facade of late, post-recession, shifting from its one-time aura of lifetime reward to one of deserved status. Buying a big, expensive home is just another something you do when you come into all kinds of money all of sudden.
But should it be?
Wall Street investors are a fickle bunch. When they want money back or start to worry they may not get what they were promised, it’s funny how soon “worry” can creep into a story about a new company’s stability, or maybe the dreaded term, “over-valued.”
Industry is littered with the carcasses of one-time tech darlings who rose through the ranks in a flash, buying up material luxuries quicker than someone can say “pivot.”
(Pivot is the start-up world’s euphemism for “start over with something new.”)
The Mansion Global article went on to cite a couple more examples of youthful technologists possible getting in over their heads, such as Dropbox’s founder buying a $9 million unit in a San Francisco tower that is now sinking (literally) under the weight of lawsuits, along with his company’s valuation.
The problem lies in the fact that so many of these luxury mortgages are tied to company equity, not actual cash assets.
if that sounds eerily familiar to the cause of the Great Recession, it’s because it is.
Now, to be fair, a net worth overvalued at $100 million might still very well be worth $50 million, so it’s not like the bank isn’t able to collect something should a mortgage account run dry.
It also helps that many of these properties will be bought quickly, especially if even the slightest whiff of a discount emanates from the listing contract.
All said, the Las Vegas luxury market continues to move along in a healthy direction.
Our properties tend to offer a great deal more resale value as a result of our price points. A two-million dollar home in Las Vegas offers a great deal more for your money than the same home in the Bay Area.
We’d love the chance to show you what you’re missing in our market, one of the most under-valued luxury markets in America.