As a former wine professional, I am still intrigued by the comings and goings of that industry. There are many correlations between the fine wine market and real estate, especially rarefied New York City real estate.
Today’s article in The New York Times Food & Wine section reveals a struggling wine market. “The London International Vintners Exchange’s Liv-ex 100 index, which tracks trading in 100 fine wines, mostly red Bordeaux, nearly tripled in dollar terms between February 2005 and August 2008. The index has lost about 43 percent of its value since then.”
The article goes on to quote Robert Parker, noted wine critic, “In terms of wine prices, even the luxury end are soft, but have not fallen as much as real estate, art, and stock. However, buying of top wines has slowed considerably, and what unfolds over the next six months will push prices lower, I suspect.”
Remember, this is a wine expert speaking candidly and not a real estate expert. I would assert again that the indicators and the inevitable outcome for both markets will be much the same.
An expert of another order likes to use the Liv-ex 100 as an indicator of how the world’s wealthy are faring as whole. Soon, we all may need another drink!