WEBVTT - Luxury Living Makes Big Comeback in the Big Apple

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<v Speaker 1>This is Bloomberg Business Week with Carol Masser and Bloomberg

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<v Speaker 1>Quick Takes Tim Stinovic on Bloomberg Radio. So earlier on Bloomberg,

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<v Speaker 1>JPMorgan Private Bank chief investment strategist Thomas Kennedy says poorly

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<v Speaker 1>performing financial and housing stocks are signaling a cyclical slowdown

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<v Speaker 1>the US economy, even as the FED plans to tighten

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<v Speaker 1>policy further this year. Housing stocks, though I mentioned, we

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<v Speaker 1>actually saw them up as a group today, but they're

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<v Speaker 1>down more than so far this year. Well, it's an

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<v Speaker 1>entirely different animal. And we talked about the island of

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<v Speaker 1>Manhattan and New York City in general, and that's why

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<v Speaker 1>we're fortunate to have Barbara fox On, whose president of

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<v Speaker 1>Fox Residential Group. Fox Residential has been doing this for decades. Barbara,

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<v Speaker 1>it's good to have you with us. Um give us

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<v Speaker 1>an idea of what you're seeing in the in the

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<v Speaker 1>real estate market here in New York City right now,

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<v Speaker 1>because there's been so much volatility. Carol and I talked

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<v Speaker 1>about it each and every day with the equity market,

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<v Speaker 1>and I'm wondering if we're starting to see any of that.

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<v Speaker 1>And I'll use the term from Abigail do a little

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<v Speaker 1>earlier today. Um, she said, stocks for a little smushy

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<v Speaker 1>this year, I believe, UM, real estate not so much,

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<v Speaker 1>not at all. Actually, the market is just on fire

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<v Speaker 1>right now. And UM, as a real estate professional, we

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<v Speaker 1>move fast when the market is so good, it's UM,

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<v Speaker 1>it's really amazing. We're having the problem. The biggest problem

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<v Speaker 1>we're having right now is UM supply. I mean all

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<v Speaker 1>of the supply has been absorbed, not all of it,

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<v Speaker 1>but much of it has been absorbed. And UM, it's

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<v Speaker 1>just it's pushing the prices higher again. And it's really

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<v Speaker 1>like a crazy market. So who's buying and how are

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<v Speaker 1>they buying? Is it all cash deals? Well, that's the

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<v Speaker 1>interesting thing. You know, Manhattan is its own animal, and

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<v Speaker 1>I think about half of all of our deals are

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<v Speaker 1>all cash deals. So that means that's good news. And

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<v Speaker 1>in in that it the higher interest rates which are

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<v Speaker 1>sure to come, will not particularly affect us. And UM. Also,

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<v Speaker 1>if we found when the stock market is mushy or

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<v Speaker 1>whatever you called it, UM, that the the I'm sorry

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<v Speaker 1>anything the real estate market UM tends to be really good.

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<v Speaker 1>UM in that people use that as an investment vehicle

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<v Speaker 1>rather than the stock market. So right now. There are

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<v Speaker 1>a lot of things pointing very positively in the direction

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<v Speaker 1>of investment in real estate. So back to that, who's buying?

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<v Speaker 1>And is it all cash deals? Sorry? Um? Who's buying?

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<v Speaker 1>Americans are buying. I just um spent the day showing

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<v Speaker 1>apartments to somebody from Texas and somebody that's moving in

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<v Speaker 1>from California. And there are a lot of Americans around.

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<v Speaker 1>I'm not seeing a lot of foreign investors, um, even

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<v Speaker 1>though I think that there's gonna be there's gonna be

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<v Speaker 1>a lot more coming forward, UM in the future. UM,

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<v Speaker 1>And they are um, by and large, the big ticket items,

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<v Speaker 1>particularly are all cash deals. Hey, Barbara, I mentioned you've

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<v Speaker 1>been doing this for decades. You created Fox Residential Group

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<v Speaker 1>back in is a boutique real estate firm. You've seen

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<v Speaker 1>a lot of cycles when it comes to real estate

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<v Speaker 1>in New York City, And I'm wondering what happens after

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<v Speaker 1>you start to see a market this hot. Are you

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<v Speaker 1>seeing any warning signs right now? What comes next? When

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<v Speaker 1>does the market cool down? Or is this time different? Well,

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<v Speaker 1>it's interesting. I don't know whether it's different yet that

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<v Speaker 1>I'm sure we'll find out. But what what happens is

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<v Speaker 1>that our market has historically been very cyclical with regard

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<v Speaker 1>to the seasons. Spring is usually a very hot market,

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<v Speaker 1>Fall is a hot market. The dead of summer, July

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<v Speaker 1>and August are pretty slow. But in the last last year,

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<v Speaker 1>for example, one of our biggest months the whole year

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<v Speaker 1>was July. So yeah, it's just everything is his sort

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<v Speaker 1>of you know, topsy turvy now and we don't really

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<v Speaker 1>know where it's going. I um, I think that with

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<v Speaker 1>the interest rates increasing at this point, um, I think

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<v Speaker 1>that people are going to try to get into the

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<v Speaker 1>market now as as soon as possible because they know

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<v Speaker 1>that they're going to be the people that are borrowing

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<v Speaker 1>are going to want to be able to get the

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<v Speaker 1>lowest interest rate possible, and and that may be a

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<v Speaker 1>little bit of an impetus for people to buy now

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<v Speaker 1>in the next six months to a year. So I'm

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<v Speaker 1>on your website and I love real estate. I love

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<v Speaker 1>Carol's face. But she's clicking through, clicking through these. She's

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<v Speaker 1>just like, I'll take this one, I'll take this. I'm

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<v Speaker 1>touch it flies right now because my mouth is open

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<v Speaker 1>pretty big. D thirty five million, Um, this is uh?

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<v Speaker 1>Where is it? Uh? Park Avenue forty two Park Avenue,

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<v Speaker 1>five beds. It's like five and a half baths. I think, Um,

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<v Speaker 1>I am curious because we often talk Barbara about bidding wars,

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<v Speaker 1>certainly for homes around the US. Is there going to

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<v Speaker 1>be a bidding war and a property like this or

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<v Speaker 1>is this a CEO, a tech entrepreneur, financial titan you

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<v Speaker 1>comes in and it's you know, there isn't a bidding war,

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<v Speaker 1>just says I want it and let's just do the deal. Yeah. Well,

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<v Speaker 1>it's just usually if somebody is going to spend that

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<v Speaker 1>kind of money, they they will spend whatever. If they

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<v Speaker 1>wanted that badly, they'll spend whatever they need to spend

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<v Speaker 1>to get it. So they generally aren't bidding wars. I mean,

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<v Speaker 1>by and large, aren't bidding wars for these huge number properties. Um,

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<v Speaker 1>the bidding wars common sort of the I would say

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<v Speaker 1>three to eight million properties where they're not very many

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<v Speaker 1>of them around and the ones that are around that,

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<v Speaker 1>particularly the ones that are in good condition, um, are

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<v Speaker 1>the ones that are very much in demand because that's

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<v Speaker 1>a popular price point between I would say between three

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<v Speaker 1>and eight two and eight, three and eight, something like that.

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<v Speaker 1>Don't you don't you think though, for the deals that

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<v Speaker 1>aren't all cash, the stuff that could be maybe sub

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<v Speaker 1>three million, sub two and a half million. Are those

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<v Speaker 1>going to get hit by rising rising interest rates? I

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<v Speaker 1>think they're ultimately they will be hit if the interest

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<v Speaker 1>rates go up considerably. But you know it's New York

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<v Speaker 1>is very strange and that we get used to things,

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<v Speaker 1>and we will get used to the higher interest rates.

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<v Speaker 1>I was in the business when the interest rates were

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<v Speaker 1>eighteen percent and we were selling like crazy. So you know,

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<v Speaker 1>it's that that everybody gets accustomed to the rising interest

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<v Speaker 1>rates and they and they adjust to it. And it's

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<v Speaker 1>just like the extra taxes that we have to pay

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<v Speaker 1>on the sale of real estate. Um. You know, it

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<v Speaker 1>looks terrible in their first instituting these these fees, but um,

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<v Speaker 1>everybody gets used to it and they just pay it.

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<v Speaker 1>What has the pandemic? How has the pandemic impacted your market?

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<v Speaker 1>Because I think there was a lot of discussions about

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<v Speaker 1>people leaving New York cities, even the wealthier you know

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<v Speaker 1>for good. What impact has the pen and the cat

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<v Speaker 1>if any, Um, it's had a huge impact. Um, it's

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<v Speaker 1>a lot of people did leave the city, and a

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<v Speaker 1>lot of people left the city, left their old apartments

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<v Speaker 1>and sold their old departments and then bought Pierta tears

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<v Speaker 1>in the city. And I see we're seeing a lot

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<v Speaker 1>of that right now. Um, people who weren't sure they

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<v Speaker 1>wanted to sell, but they didn't really want to keep

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<v Speaker 1>these big, you know, family homes for years and years

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<v Speaker 1>that they don't need. Um. So we're seeing a lot

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<v Speaker 1>of that happening. Um. But there's so many um, you know,

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<v Speaker 1>new people coming into the city and there's um, there's

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<v Speaker 1>a whole resurgence of of the sales and these big

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<v Speaker 1>family apartments. Well, it's always fun to talk real estate,

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<v Speaker 1>fun too, especially talk with people about it. I know,

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<v Speaker 1>I love just perusing the website. UM. Barbara, thank you

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<v Speaker 1>so much. Look forward to checking in with you again

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<v Speaker 1>in the future. Barbara Fox, she's president of Fox Residential Group,

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<v Speaker 1>joining us on the phone in New York City. Millions

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<v Speaker 1>too much, girl, There's one for nine point five at

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<v Speaker 1>Park Avenue. Sign me up, done. I don't even need

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<v Speaker 1>to look at it. Sight unseen