moscow / nyt

bubble world tour: next stop moscow.......

MOSCOW — Does an apartment building originally constructed for Heroes of Socialist Labor have market cachet?

Just ask Peter Falatyn, an American living in Moscow. Real estate prices have doubled in the last year, pushing him out of the apartment he has been renting for the last six and half years. “.....

.....many owners in Moscow, have found themselves sitting on gold mines and decided to sell, sometimes forcing out renters like Mr. Falatyn.

Evans (www.evans.ru), a real estate agency with offices just two blocks away, says two apartments in Mr. Falatyn’s building are for sale. One is the same size as his — 74 square meters, or almost 797 square feet — and is listed at $792,000. (He initially paid $1,200 a month, but that was increased to $1,700 a month last year.) ( this is a picture of the building)

According to Karina Kheifetz, one of Evans’s two managing partners, listing prices in Moscow now average a little more than $5,000 per square meter, or about $463 per square foot. In the Patriarch’s Pond neighborhood, they are a minimum of $10,000 per square meter, or almost $926 per square foot.

At the very top of the market, Ms. Kheifetz said, some apartments are selling for as much as $30,000 per square meter, or almost $2,780 per square foot.

In Mr. Falatyn’s building, she added, prices are $10,700 per square meter, or $990 per square foot. And as for rentals there, three-room apartments now range from $3,000 to $4,200 a month. (....., apartments in Russia are categorized by the total number of rooms, not the number of bedrooms.)

The unsettled political and investment climate in Russia might decrease future demand for real estate in Moscow somewhat, but there would have to be a drastic change in supply and demand to bring the prices down significantly, Ms. Kheifetz wrote by e-mail from New York, where Evans has just opened an office in SoHo.

“Even though it sounds crazy, it is a fact,” she wrote. “The reasons for the hike in property prices are the rapid growth in demand (more cash and mortgage money available), lack of other trustworthy investment instruments and extremely limited supply of housing.”

Muscovites generally want to trade up from their cramped Communist-era quarters, where three generations often shared one tiny apartment. And just about anyone in Russia who has profited from the booming oil and commodities market wants a piece of Moscow real estate, either as a home or an investment.

Foreigner investors, Ms. Kheifetz said, have little impact on the market. ....

Location is everything in Moscow. So, in desirable districts, even ugly prefabricated Soviet buildings with facades that look like moldy bathroom tile can cost as much as top-of-the line housing in neighborhoods with less cachet. .....

Lining the hallway wall are prints from his favorite Parisian shop, to remind him why he has not bought an apartment in Moscow. “In the Sixth and Seventh Districts in Paris, in Saint Michel and Saint Germain, you can buy an apartment for 10,000 to 12,000 euros a square meter,” or about $1,200 to $1,445 a square foot, he said. “It will be in a beautiful building, overlooking parks.

“You don’t have pools of sewage in the basement.” .....

He is not alone, Ms. Kheifetz said. “A client of ours, who has relied on the rental income from a small Moscow apartment for a while, is considering trading it for a villa in Italy, which she can afford at the current price levels.”

When Mr. Falatyn does buy a home, he said, it may very well be Stateside. “I’m very seriously considering Palm Springs,” he said. “For $300,000 to $350,000, you can buy a house with a pool.” (uhhhh. i hope he can wait.....da sollte er besser noch warten)