investing

Tarnished gilded age

Tuesday, July 14
Posted 2 p.m. EDT

It appears a significant amount of gilt has chipped off America's new gilded age.

According to the annual Merrill Lynch CapGemini World Wealth Report, the decline of global millionaires from 10.1 million in 2008 to 8.6 million today is the largest drop since the survey began 13 years ago. Total wealth fell 19.5 percent, from $40.7 trillion to $32.8 trillion.

And now we read the news that some of the luxury enclaves that were thought to be recession-proof are taking a dive. This article in Forbes notes that the country's wealthier areas, like Santa Monica, Calif. and Lincoln Park in Chicago, are on track to drop 15 percent to 25 percent.

Unsold properties in pricey Manhattan are at their highest levels in a decade, according to the article, and on the West Coast, in Santa Monica's exclusive ocean-view areas, real estate listings are up 60 percent since last year, and the number of days on the market has doubled.

During the Gilded Age of the late 19th century, which gave rise to lavish lifestyles of big-name industrialists like Cornelius Vanderbilt, John Rockefeller and Andrew Carnegie, Americans saw a rise in philanthropy, which left a legacy of universities, libraries and museums that we benefit from to this day.

We are also left with evidence of that era's high living in the opulent summer and winter "cottages" in places like Newport, R.I. and Palm Beach, Fla., that we enjoy as tourists. Those mansions often were unintended endowments from heirs forced to donate them because they couldn't afford the upkeep and taxes.

Might we look forward to the unsold mansions in ultra-exclusive neighborhoods like Sagaponack, N.Y., which currently sports an average listing price of $6.1 million and 143 unsold properties, becoming the Newport of the future?

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