Bonuses Trumping Interest Rates in NY Market
The NY Post concludes a brief article about interest rates’ upward trend and the possible impact on an already-softening market with this almost-throw-away comment: Regardless of what happens, Manhattan real estate might be less dependent on interest rates than the rest of the country, thanks to year-end Wall Street bonuses. So don’t count on the…
The NY Post concludes a brief article about interest rates’ upward trend and the possible impact on an already-softening market with this almost-throw-away comment:
Regardless of what happens, Manhattan real estate might be less dependent on interest rates than the rest of the country, thanks to year-end Wall Street bonuses. So don’t count on the boom ending just yet.
At this point in Brooklyn’s evolution, we’d argue that the brownstone market is also quite tethered to Wall Street’s fortunes, although most of the bankers we know are pretty much limited to Brooklyn Heights and Cobble Hill. The trickle-down effect alone should make everyone in the Brooklyn market keep a close eye on what happens on Wall Street over the next month. If Goldman Sachs is any kind of an indicator, a few measly fed fund increases won’t get between the newly-moneyed and their castles.
Taking an Interest [NY Post]
Also, I’d point out, that while there may only be a few thousand folks making seven-figures on Wall St., there are legions of mid-level folks making $250K – $500K. And that ain’t exactly peanuts, especially when you combine two incomes. These folks can still “afford” 2BR Manhattan apartments and brownstones in Bklyn (care to comment on that brownstoner?).
Whatever the direct or indirect impact of Wall St. money on the local economy, it is safe to say that Wall St. sets the pace, the mood of the NYC consumer mindset. When Wall St. is having a good year, the city is infected with a fairly positive mood – even folks in other industries are inclined to feel more positive – whether there is a good reason to or not. Perhaps it’s a matter of keeping up with the Wall Streeters.
BTW: This is something I don’t like about ‘Under The Counter’.
It is one thing to look at expensive real estate, it is another thing to look at the people, who should be able to buy them.
In my area people are not as snobby, egomaniac as implied at “Under The Counter”, but pretty normal.
One of the few things I agree with JoshK.
Yes, there are people who makes tons of money and a few of them even make into or buying the Trader Monthly, but the stereotype people seem to assume everybody on Wall Street tries to mimick is the exception…
Well said 01:02PM
It always makes me laugh when I see ppl commenting about how smart wall streeters are.
I posted about this on curbed:
http://www.curbed.com/archives/2005/12/01/curbed_roundtable_december_stateothe_marketreport.php#2126
Comment #28
Another example from me here:
http://forums.newyork.craigslist.org/?ID=29600066
The artcile I was linking to is now here:
http://www.nytimes.com/2005/06/26/realestate/26profession.html?ex=1133931600&en=54dd0398ac389e7c&ei=5070
The Wall Street guys who will get big paydays this year are not necessarily the guys who got paid the year(s) before. It rotates. This year was good for M & A and Commodities, terrible for bonds. Three years ago they were firing all the M & A people. It will be new people with money in their pocket. And Wall Streeters are notorious for being awful personal investors. They are as emotional as anyone else is (with their own money). The guys with the big money are going to trade up, the newbies will enter the market. That doesn’t mean prices will go rocketing up. There is a lot more inventory out there. Prices just aren’t going to fall out of bed. Does there seems to be more people with families staying in the City — everyone doesn’t automaticaly run for the suburbs when child #2 comes along. At the end of the day, it is demographics which dictate housing costs. More demand >> higher prices.
Not doubt about it Mr. Minerva. NYC depends on Wall Street and esp. real estate, but the notion
“Wall Street has a good year – everyboy on WS gets tons of money (and is surprised by it) (at least over 300k) – runs to the next NYC real estate office to get rid of the money asap”
is a little bit simplistic and not the reality IMHO.
But again the city depends on WS. Defenitely.
I first have to take issue with the first comment – Wall Streeters never make stupid mistakes?! Are you freakin’ kidding me?! But I have to somewhat disagree with the ‘Stoner regarding what nabes are closely tethered to Wall Street. This is New York City. We are all closely tethered to Wall Street. From the artists in Billburg who make the art that hang on the Wall Streeters walls; to the Pratt Professors and other art world types who train and flog the wares of those artists in Clinton Hill; to the director of a small non-profit that relies on Wall Streeters largesse who lives in Kensington; to the hedge-fund in-house counsel with his wife who works at the Goog in Prospect Hts; to the immigrant in Brownsville that cleans the offices at night; etc etc. I’m just using a few specifc examples to make my point, not generalizations. Obviously, If Wall St starts having problems, there’s going to be worldwide repercussions, but here in NYC we’re all gonna have problems much more directly than pretty much anywhere else. And that includes in the brownstone market in Bklyn… to get the back to the point.
Anon 10:16 is right (and funny). The bling factor is of major importance to Wall St. crowd. Some hedge fund guy just bought a place for $45 million (a record). We’ll see if other financial types follow his lead in their efforts to one-up eachother.
It’s odd to think that our economy is so driven by ego and sex. Law of the jungle, I guess. The guy with the fanciest feathers, biggest horns, or the most tricked out den gets the chick.