I had the opportunity to sit in on a very small meeting with Greg Heym, chief economist for Halstead Property Company, and Brown Harris Stevens.
As you may or may not know, we are sister companies each
own
ed by Terra Holdings.
One of the (many) reasons why I love working here is that our ownership is STRONG.
As in, $2 Billion sellout of 15 CPW strong, when $1 Billion sellout would have been a big success, as in William Zeckendorf selling his own 15 CPW unit for $40mm strong and buying Wasserstein’s $29mm unit, for $3mm over ask.
I am in great hands with these owners, and their economist knows of what he speaks.
I am in the front row when our ownership speaks.
They are part of what makes New York City real estate great.
But I digress.
Before the meeting, I cornered Greg and asked him what he thinks about the 4th quarter numbers.
He told me “Don’t worry, the news is all good.”
I asked him about Urban Digs, Noah Rosenblatt’s blog that tries to crunch real time numbers and give to-the-minute data on the NYC market.
I love his blog, although it’s super numbers-heavy.
Greg joked that he can’t get some brokers to understand his simplified monthly reports.
Which just goes to show you that each broker has his/her strengths, numbers not always being one of them.
Anyway- my takeaways from Greg’s talk with my office:
1) The New York Market is seeing a resurgence of cooperative sales, especially at the high end.
Pricing is up 17% year over year for coops.
This is great news.
Why?
Well, the barriers for entry to the Manhattan market are steep.
There is little difference right now in barriers to coops and condos on the purchase, in terms of downpayment- there is the board approval process, but I’d argue that a $5mm purchaser isn’t spending every last dime on his primary residence.
The big difference is the closing cost on a purchase.
There is no mortgage tax on a cooperative, which is nearly 2% of a mortgage.
When you’re borrowing at high numbers, this makes a difference.
Typically, if you tax something you get less of it, so we’re seeing the smart money go into coops on primary purchases.
2) NYC has recaptured fully 1/3 of jobs lost since 2008.
51,000 jobs of 150,000 lost.
We didn’t lose the numbers expected, and finance and high-end service jobs are resurfacing.
This is good from the top down.
For each job on Wall Street created, three additional jobs are ultimately created below due to their spending power.
Speaking of which…
3)
Bonuses- Greg Heym believes that bonuses will be UP from last year, given the Eye of Sauron will not be focused on Wall Street as it was last year.
What does this mean?
We don’t know how much of bonuses will be in stock or deferred options or what have you, and how much will be cash, but once taxes are filed, Greg can determine some of that.
Ultimately, the confidence that we have come out of a bottom in New York City is a fantastic thing.
Every buyer I speak to on the phone exudes this confidence, and while there isn’t an urgency to buy yesterday, things are healthier now, and getting more so.