It is hardly surprising that there has been a flurry of stories in the last few days about the impact that heady bonuses will have on Wall Street. Will they goose real estate sales, especially at the higher end?
Paul Purcell, for one, the co-founder with Kathy Braddock of my brokerage, was quoted yesterday in the Wall Street Journal as saying the following:
“There’s a happier feeling. Our leading indicator is the Street. . . We’re grabbing on to anything that is a positive.”
True enough, Paul. While real estate brokers tend to cling to any shred of good news – either actually believing it or merely trumpeting it – our track record is hardly impressive. Just ask all those folks who purchased property in the Big Apple before Lehman Brothers expired on Sept. 15 last year.
The same Journal piece went on to quote a few other brokers celebrating what they take to be a resurgence of high-end sales. It also pointed to factors that could stem recovery:
- Thousands of the jobs lost on Wall Street have not come back.
- Even those who remain employed there face smaller bonuses.
- Many of the bonuses will be partly, largely or entirely in cash.
- The credit crunch persists.
Forbes magazine also has injected a note of skepticism, quoting Manhattan real estate lawyer Edward Mermelstein as saying:
“Starting in January or February, brokers would call us up saying, ‘I’m expecting an offer on this property or that property.’ I’m not expecting that this year.”
Do I know how a robust bonus season will affect the Manhattan real estate market? Of course not.
What I do know is that the number of my clients, none of them from Wall Street, has mushroomed. I also know that real estate brokers have the same genetic disposition to view every glass as half full as every successful salesperson.
So, maybe the basis of optimism has less to do with Wall Street bonuses than with an admittedly tenuous level of consumer confidence and a growing belief that the bottom of the Big Apple’s market is here or near.
Without the herd instinct, after all, there never would have been a housing bubble.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022