Economists calculate that 23% of all national income is going to the top 1% …As the financial world has exploded in size across the west, this has made bankers rich, and – equally importantly – pumped up the value of their assets, such as stocks and bonds. And, of course, Aspen real estate.
This spring, an intriguing pattern has developed in the real estate market in Aspen, the upmarket Colorado ski resort. Properties that are worth more than $10m – those sold to mega-oligarchs – have generally held much of their value in recent years. Meanwhile, condos (or flats) that are valued at less than $1m are continuing to sell to vacation companies, albeit for less than five years ago. However, properties worth between $1m and $10m are seeing a dearth of bidders. The reason? Locals are apt to blame the “bonus belt” problem. More specifically, although some global oligarchs appear protected from economic swings, the top- tier bankers who were splashing around their cash before 2007 – and who typically bought those $1m-$10m ski lodges – no longer feel so flush. Bonuses have been squeezed, jobs are being cut, and many wealthy residents have suffered paper losses on their assets – including real estate in places such as Aspen.
By Gillian Tett, Financial Times, April 21, 2012