New York City Real Estate | NYC, NYNew York City Real Estate | NYC, NYNew York City Real Estate | NYC, NYNew York City Real Estate | NYC, NY
  • ABOUT
    • ABOUT SCOTT
    • ABOUT THE TEAM
    • PRESS
  • BUYERS
  • SELLERS
  • VIDEOS
  • LISTINGS
  • JOIN OUR TEAM
  • BLOG
  • CONTACT
  • CALL SCOTT NOW

Jobs vs. Bonuses and perception of Value

    Home Uncategorized Jobs vs. Bonuses and perception of Value
    NextPrevious

    Jobs vs. Bonuses and perception of Value

    By admin | Uncategorized | Comments are Closed | November 17, 2011 | 0

    The question I am thinking about is this:
    What will drive the Real Estate Market more, strong employment, or better bonus season?

    Conversely, will weak employment and a down bonus season destroy

    any RE market momentum we have here?

    I would argue that a search for Value in the market, with many finding it, seems to have created a more stable situation, despite what could be less rosy news over the next quarter.

    We wear many hats


    I heard

    much more dire layoff numbers than what I am seeing in print.

    3000 worldwide layoffs for Citibank

    sounds much better than 20,000 or 30,000 worldwide layoffs.

    Sure, layoffs have an impact.

    But dire predictions have not materialized.

    Will they happen in 1st quarter 2012?

    Will the super committee reach consensus

    in

    Washington?

    We will have to wait and see.

    Will bonuses be down 20% this year?

    So what if people do make slightly less in 2011 than in 2010?

    My read, from working with a number of buyers in the market right now, is that 2008-2009 changed the mindset for many, but is not keeping buyers away from making real estate decisions.

    Surely, people have become even more conservative in their outlook than before.

    But if they have been renting in New York, and have a need to get a larger apartment, despite a looming lackluster bonus season, rents appear really high.

    The calculation is then just about how long someone is going to live in the city, desire to take advantage of tax deductions, desire to have a hard asset, what have you.

    I am fond of marathon metaphors, since I do a lot of running.

    A friend of mine told me, “Don’t make any big decisions on the uphills, or the downhills.”

    Applying that to this real estate market, I do not see anything overheated, other than the rental market, nor do I see major disaster ahead.

    I just see an opportunity for buyers to take a little more time, assess their options, and make a rational decision.

    My sales experience tells me that most people do make a purchase decision with their emotions, and then back it up with facts.

    Fine.

    But perhaps the emotion these days is tempered with a little more patience.
    So let’s call this combination a new normal, a search for Value.

    This

    overarching criterion, Value,

    is being applied by many, many more primary home buyers – and not just investors.

    Value is playing a bigger role across the board.

    Value could be the $2mm Three-bedroom, or it could be the $999,000 2-bedroom, or is could be the $4mm Four-Bedroom.

    And buyers are finding it.

    A casual search across any Real Estate

    website these days will reveal many more

    property descriptions touting “Value” rather than

    “Luxury.”

    Doormen, gyms,

    etc may

    seems like luxuries to those who

    do not live in Manhattan, but

    of course

    value is a matter of

    perspective.

    Wherever a buyer is across the spectrum, I would argue that value, rather than luxury, has become the new emotional decision.

    Value is exciting, value helps you sleep at night, and yet value is boring and thoughtful and lasts over time.

    Of course, I’ve been

    having a little Occupy Wall Street-themed blog entry fun over the last few days, interested to see what happens today downtown with marches and such.

    Meanwhile, many hardworking New Yorkers are happy to have jobs, wherever they are.

    They like living in Manhattan, Brooklyn, and Queens (though I don’t work in Queens, Bronx, or Staten Island, I do hear these things…).

    Yes, at the

    high end

    of the market, we are seeing new listing records,

    $88mm apartments, $90mm townhouses, what have you.

    Five sales deals over $20mm last quarter is significant.

    But

    what we can

    categorize more as the rest of the market, which we can call the 99%, ha ha- is how Real Estate Market Transaction Volume is driven by jobs

    or bonues.

    How

    many people are fearful they will lose their jobs here?

    While I am not seeing it in the news, I feel that

    mid-level positions

    at banks

    to be most at risk.

    Yes,

    new hires are making lower bonuses, are happy to have jobs, and cost the banks less- and they will drive the rental market.

    New attorneys will perhaps make lower first year salaries as pushbank on hourly rates continue.

    Looking more broadly,

    disruptive business ideas

    and new technology

    continue to destroy certain job sectors and open competition worldwide.

    But does that mean the market will give back the 31,400 jobs it added over the last 12 months?

    That is hard to say.

    I don’t see it happening.
    The biggest culprit with any job losses we may see, or lack of hiring in New York City or anywhere in the United States,

    is not banks themselves, probably not any specific industry or evil empire.

    The blame is uncertainty.

    Too many unknowns will keep companies from hiring.

    How this may translate into the market seems be more steady volume and price stabilization as buyers search and find value, without any major price increases.

    4th quarter volume may ultimately

    be slightly down, but it is so much stronger than 2009 and on par with 2010 (volume up 1%).

    I actually see some stability emerging in the new year in our market.

    I

    want to believe that a better-than-expected job situation, even with some layoffs, will be a net positive for the market here, and I do not think a down bonus season will be a disaster.

    We could see a tiny bit of softening in the $4-8mm range, but I actually don’t think we’ll see it.

    Think about it- Where these properties are priced today, many of these are value

    propositions for buyers who want to stay in New York City and need 4+ bedroom apartments.

    The “bread and butter” sales volume may actually pick up a little bit 1st quarter, but for now let’s enjoy some turkey, and wait and see.
    -S

    No tags.

    NextPrevious

    Recent Blog Posts

    • (VIDEO) Celebrating 150 Years In Residential Real Estate- And my 20th Anniversary, too. January 31, 2023
    • How to Make An Extra $1mm on the Sale of Your Townhouse January 30, 2023
    • What’s Going To Happen To All The Office Space In NYC? January 30, 2023
    • NYC, Manhattan, and The US: A Reversion To The Mean January 30, 2023
    • The Best Lead Measure in The NYC Housing Market Right Now January 30, 2023
    • How To Think About Mortgage Rates Right Now January 30, 2023
    • Are You In, or Are You Out Of New York City? The End Of Ambivalence. December 22, 2022
    • Mortgage Math- How To Spend LESS on Your Mortgage Right Now – What No One Is Telling You December 22, 2022
    • Selling To An Insider Could Cost You $150,000 December 22, 2022
    • The Unintended Consequences Of Higher Loan Limits on “Conforming Loans” November 30, 2022

    Archives

    Call us: (646) 400-0769
    Email us: sharris@bhsusa.com
    Visit us: Brown Harris Stevens
    1926 Broadway
    New York NY 10023

    © 2023 The Harris Residential Team. All rights reserved.
    • About Scott Harris
    • About the Team
    • Press
    • Buyers
    • Sellers
    • Videos
    • Listings
    • Blog
    • Contact
    • Call Scott Now
    • Brown Harris Stevens Fair Housing Policy
    • ABOUT
      • ABOUT SCOTT
      • ABOUT THE TEAM
      • PRESS
    • BUYERS
    • SELLERS
    • VIDEOS
    • LISTINGS
    • JOIN OUR TEAM
    • BLOG
    • CONTACT
    • CALL SCOTT NOW
    New York City Real Estate | NYC, NY