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Ruble Crisis Means Fewer U.S. Trophy Homes for Rich Russians

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Though the plummeting value of the ruble left average Russians investing in new Ikea kitchens, to put their savings into something real before they disappeared entirely, the New York Observer reports that the real victims here are the Russian millionaires, who feel "priced out" of prime neighborhoods in New York and Miami. Without the liquid assets to follow up on hefty trophy-home downpayments, wealthy Russians are backing out of closed real estate contracts, and in some cases, are foregoing South Beach in favor of "apartments in the Miami suburbs." The poor dears!

While New York real estate has for a while been understood as the "new Swiss bank account," the Observer holds that our impression of the Russian oligarch handing over briefcases full of cash for an apartment on Central Park West is a bit off. The "true buyer" looks more like "a millionaire who considers both financing options and bustling downtown lofts."

Corcoran associate broker Tamir Shemesh says that "in the past they really concentrated on Central Park but they were priced out from that 57th Street corridor. Millionaires cannot afford it, you really need to be a billionaire." These days, wealthy Russians are more likely to turn to SoHo and Tribeca for a sound investment, often renting out the apartments they buy, contributing to the high level of NYC apartments that are investment properties.

Around the holidays, when the ruble went into freefall, and Russia's 20 richest men lost $10B in just two days, attorney Marlen Kruzhkov says that Russian buyers approached him to flip a half-dozen contracts they had closed on $5M-$12M properties in the Miami area, such was their sudden lack of liquid assets. "An apartment in Miami, even the most glorious beachfront apartment, is not a priority right now," says Kruzhkov.

Ugh, it's like oligarchs aren't even trying anymore.

· With Ruble in Freefall, Russians Scramble to Dump Trophy Homes and Break Contracts [New York Observer]