At Haute Residence’s second annual New York Luxury Real Estate Summit, which took place November 18 in The Oak Room of The Plaza Hotel, New York’s real estate experts discussed current luxury real estate trends, success stories, and what’s next for The Empire State’s booming real estate market.
The summit featured three panels, the third of which was the “Next Generation of Power,” moderated by Seth Semilof, co-founder and publisher of luxury publications Haute Living, Haute Residence, and Haute Time. The first and second panels were the “East Coast Titan Developers” and the “New York Real Estate Power Players.”
In the third panel, top real estate players Oren Alexander, Matthew Breitenbach, Cathy Franklin, Lisa Lippman, Stan Ponte, and Cathy Taub discuss the current state of the luxury real estate market, predictions for the next year, and where buyers are coming from.
Semilof: What do you think of the current state of the market? Have you noticed any significant changes in the last six months? What are your predictions for 2016?
Cathy Taub: “The catch word for me now is ‘velocity.’ I think that the market is strong. We have a healthy market. It’s just we’re so accustomed and sellers are accustomed to expecting that their properties will sell very quickly… There’s a lot more product for buyers to look at and consider. Unless a property is priced really lean, there’s no sense of urgency… We just have to manage expectations for both sellers and buyers. We’ve been saying for the last 20 years, pricing is key. Pricing is always key, and it’s hard to know exactly where the prices should be, depending on co-op versus condo and where a property would be located.”
Oren Alexander: “I think we’re just going into a winner’s and a loser’s market. There’s no longer the day where every developer’s a winner. There will be winners and there will be losers. So, the best product and the best location will win.”
Lisa Lippman: “One thing that no one talked about today that I think is incredibly important for many of us who have been in the field for a long time is whenever there is a presidential election, the market is never as good. Unknowns are terrible for New York City real estate…We don’t like uncertainty. We don’t know who the new president is going to be... Everybody knows that Wall Street is essentially run by White male republicans. There’s no strong Republican candidate, and I think that that makes business very nervous. And I think once there is a strong Republican candidate that people can get behind and feel good about, it will take some of the uncertainty out of the market.”
Matthew Breitenbach: “In the Hamptons, we’re kind of tied to the New York City market. We’ve usually got a six-month delay on what’s going on in New York. The word I can put on the Hamptons market right now is ‘challenging.’…There’s a lot of new construction in the Hamptons right now––some of it not the greatest location to really push in numbers, but on the brighter side, there’s a lot of money in the Hamptons that’s still there. Buyers are still there, and I’m seeing stuff that’s priced correctly…”
Cathy Franklin: “There are 750 contracts signed year-to-date 2015 of five million and over, so, while a lot of that is in new developments as they pointed out before, that’s a record in the history of New York City. They’ve never seen that before. In that case, that market is definitely up…. I think the over 10 million market has definitely slowed down. But contracts are also up by six percent overall for the entire market. So, the overall markets are up, but I think that the market that’s actually slowed down has been the resell market.”
Semilof: Where are the majority of your buyers coming from on a domestic level? On a global level?
Lippman: “I’ve been doing this for 18 years, and the buyers in general are different than they were in the beginning. We’re seeing a lot more New Yorkers who were not born in the United States. There’s many, many more people who are not foreign buyers––they are New Yorkers; their kids go to school here, they work here; they maybe don’t have their citizenship yet, but they’re working on it––but they were not born in the United States.”
Stan Ponte: “On the international side, what has changed dramatically––at least from my perception––is that the Chinese money has gone from small investor units to big, big properties––big townhouses and big condos… If I go through my significant sales in the past two years, over 50 percent have been Chinese and over five million…”
Alexander: “Most of buyers are definitely domestic... A big source of our business has been coming from contemporary art collectors, so we’ve been frequenting the tour. About a month ago, we were in London for Frieze––picked up a couple clients from there. So, I would say that’s probably the common denominator for all our buyers as of recent.”