Latest / Bloomberg Intelligence / Halstead's Grossman on Opportunities in NY Real Estate (Audio)

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Halstead's Grossman on Opportunities in NY Real Estate (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg eleven bo to Washington,
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  Speaker 1: the Federal Reserve in focus, and we're taking this opportunity
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  Speaker 1: to speak to the president of Halsted Property, Richard Grossman,
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  Speaker 1: about the outlook for New York City real estate against
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  Speaker 1: the backdrop of a central bank that looks like it's
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  Speaker 1: getting ready to hike the key rate. What really counts
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  Speaker 1: now for investors? Pan, Yes, Well, speaking with Richard Grossman,
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  Speaker 1: as you said, he's the president of Hall staid you
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  Speaker 1: know that Halstead closed on over a thousand sales last
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  Speaker 1: year with a value of more than one point to
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  Speaker 1: billion of dollars. We're gonna find out about the real
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  Speaker 1: Charlie from the Bloomberg News room. I Rami in essent cio.
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  Speaker 1: five tenth of one percent. I'm Charlie Palatin. That's sub
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  Speaker 1: Bloombred Business Flash. This is taking stock the FED in
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  Speaker 1: focus on Bloomberg Radio, the FED in focus the availability
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  Speaker 1: of a credit. Let's find out more when credit is
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  Speaker 1: applied to the real the state industry. Richard Grossman is
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  Speaker 1: the president of Hallstead Property and he joins us now. Richard,
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  Speaker 1: thank you very much for coming in. And by the way,
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  Speaker 1: congratulations because I believe this year you were made president
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  Speaker 1: of Hallstead. Yes, thank you very much. In fact, I
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  Speaker 1: became president this past spring. Alright, so congratulations just in
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  Speaker 1: time perhaps for what maybe a softening of the real
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  Speaker 1: estate market or tell us the state of the market,
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  Speaker 1: and then we'll talk about financing. Sure. I mean the
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  Speaker 1: state of the market is in New York there's first older,
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  Speaker 1: a lot of different markets going on at the same time.
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  Speaker 1: Either the markets say above five ten million dollars, we're
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  Speaker 1: looking at one sort of market where there's probably too
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  Speaker 1: much inventory in that area right now. And there's the
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  Speaker 1: market that I would say below three to five million.
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  Speaker 1: Below you really see that maybe the everyday person's market,
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  Speaker 1: there is still a shortage of what is available and
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  Speaker 1: properly priced things are selling. It's sorry, Kathy, I just
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  Speaker 1: want to add, you know only and you would actually
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  Speaker 1: I think, maybe comment on this, but average for three
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  Speaker 1: million to five million, I mean, the rest of the
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  Speaker 1: country doesn't think that that's I mean, it's amazing statistic,
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  Speaker 1: isn't it correct? It is an amazing thing in New
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  Speaker 1: York City to see prices at that level. Of course,
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  Speaker 1: it's it also depends on a lot, still, doesn't it
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  Speaker 1: on where in New York City you want to buy,
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  Speaker 1: Because Manhattan is is one market versus Riverdale versus you know,
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  Speaker 1: beans and and even Dick Queen's many different parts. Correct,
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  Speaker 1: And in Manhattan even there as many different markets within
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  Speaker 1: the same size. There's billionaires Row that's one market. There's
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  Speaker 1: the Upper east Side, Upper west Side, the Village, Murray Hill,
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  Speaker 1: UM and different places. And there are emerging markets Queens
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  Speaker 1: and the Bronx. Quite frankly, our markets that we're seeing
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  Speaker 1: still upside potential in those marketplaces, our developers starting to say,
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  Speaker 1: you know, we've kind of saturated the top and it's
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  Speaker 1: nice to sell those super luxury expensive ones. Are they
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  Speaker 1: starting to say, you know, there's still so much demand
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  Speaker 1: where I can make money if I just I'm building
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  Speaker 1: more units that the more people can afford. Sure, in
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  Speaker 1: certain marketplaces, they're certainly doing that, and that's why you're
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  Speaker 1: seeing places like Queens and Brooklyn so much construction activity there.
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  Speaker 1: In Manhattan, the construction activity for two in two thousand
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  Speaker 1: and sixteen has certainly slowed down. We went from last
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  Speaker 1: year about fifteen thousand new building permits um we're issued
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  Speaker 1: that includes cops and excuse me, condominiums and rental housing.
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  Speaker 1: This year that's down to six hundred and fifty. So
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  Speaker 1: the top of the market, there's probably about a thousand
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  Speaker 1: units coming in at the prices at ten million dollars
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  Speaker 1: and above, and we absorbed that at about fifty units
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  Speaker 1: plus or minus fifty seventy five units per year. Tell
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  Speaker 1: us about the mortgage market. Is it easy to get
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  Speaker 1: a mortgage? It's more it's it's it's more difficult to
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  Speaker 1: get a mortgage today than it was let's say, eight
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  Speaker 1: years ago before pre Layman. They're still gonna be looking
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  Speaker 1: at good credit scores, They're still gonna be looking at
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  Speaker 1: a larger down payment than they did in the past,
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  Speaker 1: and they're gonna put It's it's not how much how
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  Speaker 1: much would you have to put down? Typically in New
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  Speaker 1: York City you're probably looking but down a minimum ten
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  Speaker 1: percent and and not a typically twenty because most of
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  Speaker 1: our housing is cooperative, and most of the buyers who
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  Speaker 1: are buying in New York City been at these price points,
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  Speaker 1: is points are putting large down payments down. So is
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  Speaker 1: it a case where Okay, we know the Federal Reserve
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  Speaker 1: is getting ready to hike the key rate, and they
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  Speaker 1: may just take it once this year, and who knows
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  Speaker 1: if they're gonna you know, one or two next year.
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  Speaker 1: It isn't much, but it could help move mortgage rates up.
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  Speaker 1: If if ten you're the bond market sells off and
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  Speaker 1: the yields on, you know, that's how the mortgage is
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  Speaker 1: really priced. They don't price on the short end. But
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  Speaker 1: I guess my question is more along the lines of
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  Speaker 1: does it make that much difference to buyers right now?
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  Speaker 1: If I have a job, if I can afford the
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  Speaker 1: down payment, does it make much difference? How much that
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  Speaker 1: moere I. I don't think it's going to make a
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  Speaker 1: difference in in in absolute dollars. I think that buyers,
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  Speaker 1: you know, if interest rates go up, you know, two
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  Speaker 1: or three percent, I think you're gonna start seeing some
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  Speaker 1: effect in the marketplace. But if you get a half
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  Speaker 1: a point a point a point and a half rise
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  Speaker 1: of the interest rates, I think people are expecting that
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  Speaker 1: and be at these price points and would amount they're
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  Speaker 1: putting down they can afford to. They can afford this,
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  Speaker 1: not just not to keep it so a New York
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  Speaker 1: centric all the time? Where are buyers coming from? Where
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  Speaker 1: do you see the most activity and the healthy uh
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  Speaker 1: participation of potential owners? Well, I mean, you know, the
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  Speaker 1: New York cities and international city, so we see buyers
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  Speaker 1: coming from all over the world. That's still true today
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  Speaker 1: as we've seen in the past. That said, our market
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  Speaker 1: is for a local market is a very healthy market.
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  Speaker 1: Chances are the person who's going to be buying your
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  Speaker 1: apartment in your home um is going to be a
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  Speaker 1: New York based person buying for them for their own
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  Speaker 1: uses of primary residence. So, uh, what would have to
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  Speaker 1: happen for And I'm I'm thinking of potential buyers out
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  Speaker 1: there who just wish it prices would cool off a bit.
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  Speaker 1: What would have to happen to really knock prices back
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  Speaker 1: down significantly in New York City? I think you'd have
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  Speaker 1: to see a recession. And I don't think a recession
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  Speaker 1: is on the offering in offering a New York City
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  Speaker 1: in the next few years. Why, I think the unemployment
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  Speaker 1: is good, interest rates are low UM and all the
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  Speaker 1: and and and we're not building enough housing to to
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  Speaker 1: to saturate the demand for middle class housing in New
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  Speaker 1: York City. And I'm talking middle class housing three three
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  Speaker 1: to five million below housing as an investment worthwhile right
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  Speaker 1: now as your primary residents, I think it's absolutely great
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  Speaker 1: investment to have as a spectral h of investment. It
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  Speaker 1: could be, but you have to have the risk to
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  Speaker 1: take that. There may be some ups and downs along
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  Speaker 1: the way. If I want a great buy, where did
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  Speaker 1: I look right now in this area, I would look
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  Speaker 1: in a few places. I would look in Queens, I
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  Speaker 1: would look in the Bronx. I would certainly still look
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  Speaker 1: in uh in parts of Brooklyn. And if you're looking
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  Speaker 1: outside of New York City itself, I would certainly say,
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  Speaker 1: you know, going to some of the suburbs with this
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  Speaker 1: um Westchester, Fairfield County, in the northern suburbs of New
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  Speaker 1: Jersey are phenomenal opportunities. Right now, Boy, what maybe I'll
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  Speaker 1: just I'll just take Richard Grossman of Halstood Property along
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  Speaker 1: with me on the hunt, President of Hallstad Property as
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  Speaker 1: of spring twenties sixteen. Richard, thanks for joining us in
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  Speaker 1: studio today. Thank you for having me much appreciated. So
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  Speaker 1: from New York City, Manhattan real estate to Johannesburg and
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  Speaker 1: stocks that's coming up. I'm Kathene Hayes along with Pim
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  Speaker 1: Fox and this is Bloomberg. Coming up on taking stock,
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  Speaker 1: will be speaking with the chief executive of the Johannesburg
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  Speaker 1: Stock Exchange, Nicky Newton Kane, talking about US rates and
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  Speaker 1: the effect on the South African ran That's next