Haute Residence hosted its 2017 Luxury Real Estate Summit at New York City’s CORE: Club, on April 28, when the biggest names in the industry discussed what’s next for the New York City and South Florida homebuyers.
The summit featured three panels: the NYC Titans of Business, Florida Titans of Business, and Power Brokers––moderated by Peter Grant of The Wall Street Journal, and Jennifer Gould Keil of the New York Post.
Following the NYC Titans of Business, the panel featuring the Power Brokers––Senada Adzem, Noble Black, Stephen G. Kliegerman, Dolly Lenz, Adam Modlin, Lauren Muss, Neal Sroka, and Cody Vichinsky––spoke about the best neighborhoods for buying property, where the majority of money is coming from, and the election of President Donald Trump’s effect on real estate.
Adam Modlin of The Modlin Group highlighted that more recently, not all buyers are international; most are domestic. “One of the recent trends that I’ve seen is that everyone likes to talk about the foreign buyer,” he said. “I know in discussions with clients and colleagues in the industry, usually every owner that we go to meet with, who wants to sell their home, whether it is worth $50 million or $100 million, they always ask, Do you know a rich Russian? Do you know a rich Chinese guy? Howard Lorbort told me that if the rich Russian or the rich Chinese guy overpaid for every property, then it wouldn’t be a rich Russian or a rich Chinese guy. More recently, I’ve seen that some of the most important buyers are in the market are actually domestic buyers. And that’s what I’m seeing as a trend: fewer of the foreigners at the high-end market and more people domestically.”
Agreeing that buyers are largely local homeowners, Stephen G. Kliegerman of Halstead, added: “As a city, most people are coming here to own, and buy, and live. The majority of buyers…are domestic buyers. This is their primary residence or secondary residence, but they’re here an awful lot. So, yeah, there will be a few buildings in the city, most likely the more prevalent ones that are super tall that have a lot of lights out. But there’s a lot of lights on as well.”
Dolly Lenz of Dolly Lenz Real Estate affirmed that knowing exactly who the client is is not always necessary in this market. “We don’t have to do KYC here, right? So, it’s not a factor. We’re not under any requirement to know where the money is coming from, who’s it is, or anything else. The bankers have to know. The other people may have to know, but we do not have to know.”
Senada Adzem of Douglas Elliman explained that security is an important factor that buyers consider, and rely on, when purchasing property. “I have many clients from Brazil, Colombia, Venezuela, and when they come to Florida, they get to enjoy and drive their nice cars, wear jewelry, enjoy their life. They feel comfortable,” she said. “That’s the primary reason why they buy in Florida. [The] secondary reason is that they can have a safe place. They know there’s a box in Brickell or Miami Beach. There’s a box overlooking the ocean. They know what the value is, but most importantly, they really get to enjoy it. It was 70/30 in Florida, but now it is 50/50 (domestic/international).”
Appropriate pricing is another major buying factor that Noble Black of Douglas Elliman pointed out: “You have to figure out. If it is problematic, what are the problems, and where do people think it’s going to go? Because people still may pay more than what it’s going to go to, but they want to know that they are getting a buffer. [With] 157 [W. 57th St.], as it was sinking, no one really knew where the pricing was. And again, people were chasing it down. You can sell anything if it’s priced right.”
In terms of the best areas to buy in New York City, Douglas Elliman’s Lauren Muss said: “The most up-and-coming neighborhood is NoMad––and the 20s, between Fifth and Madison. I think there are some amazing buildings that are coming up right now. I think it is a very central location, where you’re half down and half up. I see a lot of people from downtown and uptown moving there as a middle ground. At the end of the day, Central Park is Central Park, and you can’t recreate that anywhere.”
Cody Vichinsky of Bespoke Real Estate offered his take on how the election of President Trump has influenced the luxury market, “On the very high-end of our market, there was a lot of analysis that began in the beginning of 2016, as the economic volatility started to take shop with the political volatility around the world, and the election was on the horizon. I think when Trump was elected, there was relief and also a bit of concern… A lot of our buyers who came into the market––Q1 and $10 million-plus segment––they were deal hunting… There was a lot of optionality in Q1 on the very high end because again, I think Trump’s economic climate, at least for the first hundred days, was very good for people who have good liquidity.”
On a final note, Neal Sroka of of Douglas Elliman added, “If I was a young broker starting out today, I would be selling anything I can in Europe to American buyers. You have a discount that doesn’t exist and is never going to exist again. You could buy in Southern Italy for far less than you could buy in the Hamptons.”
Images courtesy of Jason Malihan