Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. So earlier on Bloomberg,
Speaker 1: JPMorgan Private Bank chief investment strategist Thomas Kennedy says poorly
Speaker 1: performing financial and housing stocks are signaling a cyclical slowdown
Speaker 1: the US economy, even as the FED plans to tighten
Speaker 1: policy further this year. Housing stocks, though I mentioned, we
Speaker 1: actually saw them up as a group today, but they're
Speaker 1: down more than so far this year. Well, it's an
Speaker 1: entirely different animal. And we talked about the island of
Speaker 1: Manhattan and New York City in general, and that's why
Speaker 1: we're fortunate to have Barbara fox On, whose president of
Speaker 1: Fox Residential Group. Fox Residential has been doing this for decades. Barbara,
Speaker 1: it's good to have you with us. Um give us
Speaker 1: an idea of what you're seeing in the in the
Speaker 1: real estate market here in New York City right now,
Speaker 1: because there's been so much volatility. Carol and I talked
Speaker 1: about it each and every day with the equity market,
Speaker 1: and I'm wondering if we're starting to see any of that.
Speaker 1: And I'll use the term from Abigail do a little
Speaker 1: earlier today. Um, she said, stocks for a little smushy
Speaker 1: this year, I believe, UM, real estate not so much,
Speaker 1: not at all. Actually, the market is just on fire
Speaker 1: right now. And UM, as a real estate professional, we
Speaker 1: move fast when the market is so good, it's UM,
Speaker 1: it's really amazing. We're having the problem. The biggest problem
Speaker 1: we're having right now is UM supply. I mean all
Speaker 1: of the supply has been absorbed, not all of it,
Speaker 1: but much of it has been absorbed. And UM, it's
Speaker 1: just it's pushing the prices higher again. And it's really
Speaker 1: like a crazy market. So who's buying and how are
Speaker 1: they buying? Is it all cash deals? Well, that's the
Speaker 1: interesting thing. You know, Manhattan is its own animal, and
Speaker 1: I think about half of all of our deals are
Speaker 1: all cash deals. So that means that's good news. And
Speaker 1: in in that it the higher interest rates which are
Speaker 1: sure to come, will not particularly affect us. And UM. Also,
Speaker 1: if we found when the stock market is mushy or
Speaker 1: whatever you called it, UM, that the the I'm sorry
Speaker 1: anything the real estate market UM tends to be really good.
Speaker 1: UM in that people use that as an investment vehicle
Speaker 1: rather than the stock market. So right now. There are
Speaker 1: a lot of things pointing very positively in the direction
Speaker 1: of investment in real estate. So back to that, who's buying?
Speaker 1: And is it all cash deals? Sorry? Um? Who's buying?
Speaker 1: Americans are buying. I just um spent the day showing
Speaker 1: apartments to somebody from Texas and somebody that's moving in
Speaker 1: from California. And there are a lot of Americans around.
Speaker 1: I'm not seeing a lot of foreign investors, um, even
Speaker 1: though I think that there's gonna be there's gonna be
Speaker 1: a lot more coming forward, UM in the future. UM,
Speaker 1: And they are um, by and large, the big ticket items,
Speaker 1: particularly are all cash deals. Hey, Barbara, I mentioned you've
Speaker 1: been doing this for decades. You created Fox Residential Group
Speaker 1: back in is a boutique real estate firm. You've seen
Speaker 1: a lot of cycles when it comes to real estate
Speaker 1: in New York City, And I'm wondering what happens after
Speaker 1: you start to see a market this hot. Are you
Speaker 1: seeing any warning signs right now? What comes next? When
Speaker 1: does the market cool down? Or is this time different? Well,
Speaker 1: it's interesting. I don't know whether it's different yet that
Speaker 1: I'm sure we'll find out. But what what happens is
Speaker 1: that our market has historically been very cyclical with regard
Speaker 1: to the seasons. Spring is usually a very hot market,
Speaker 1: Fall is a hot market. The dead of summer, July
Speaker 1: and August are pretty slow. But in the last last year,
Speaker 1: for example, one of our biggest months the whole year
Speaker 1: was July. So yeah, it's just everything is his sort
Speaker 1: of you know, topsy turvy now and we don't really
Speaker 1: know where it's going. I um, I think that with
Speaker 1: the interest rates increasing at this point, um, I think
Speaker 1: that people are going to try to get into the
Speaker 1: market now as as soon as possible because they know
Speaker 1: that they're going to be the people that are borrowing
Speaker 1: are going to want to be able to get the
Speaker 1: lowest interest rate possible, and and that may be a
Speaker 1: little bit of an impetus for people to buy now
Speaker 1: in the next six months to a year. So I'm
Speaker 1: on your website and I love real estate. I love
Speaker 1: Carol's face. But she's clicking through, clicking through these. She's
Speaker 1: just like, I'll take this one, I'll take this. I'm
Speaker 1: touch it flies right now because my mouth is open
Speaker 1: pretty big. D thirty five million, Um, this is uh?
Speaker 1: Where is it? Uh? Park Avenue forty two Park Avenue,
Speaker 1: five beds. It's like five and a half baths. I think, Um,
Speaker 1: I am curious because we often talk Barbara about bidding wars,
Speaker 1: certainly for homes around the US. Is there going to
Speaker 1: be a bidding war and a property like this or
Speaker 1: is this a CEO, a tech entrepreneur, financial titan you
Speaker 1: comes in and it's you know, there isn't a bidding war,
Speaker 1: just says I want it and let's just do the deal. Yeah. Well,
Speaker 1: it's just usually if somebody is going to spend that
Speaker 1: kind of money, they they will spend whatever. If they
Speaker 1: wanted that badly, they'll spend whatever they need to spend
Speaker 1: to get it. So they generally aren't bidding wars. I mean,
Speaker 1: by and large, aren't bidding wars for these huge number properties. Um,
Speaker 1: the bidding wars common sort of the I would say
Speaker 1: three to eight million properties where they're not very many
Speaker 1: of them around and the ones that are around that,
Speaker 1: particularly the ones that are in good condition, um, are
Speaker 1: the ones that are very much in demand because that's
Speaker 1: a popular price point between I would say between three
Speaker 1: and eight two and eight, three and eight, something like that.
Speaker 1: Don't you don't you think though, for the deals that
Speaker 1: aren't all cash, the stuff that could be maybe sub
Speaker 1: three million, sub two and a half million. Are those
Speaker 1: going to get hit by rising rising interest rates? I
Speaker 1: think they're ultimately they will be hit if the interest
Speaker 1: rates go up considerably. But you know it's New York
Speaker 1: is very strange and that we get used to things,
Speaker 1: and we will get used to the higher interest rates.
Speaker 1: I was in the business when the interest rates were
Speaker 1: eighteen percent and we were selling like crazy. So you know,
Speaker 1: it's that that everybody gets accustomed to the rising interest
Speaker 1: rates and they and they adjust to it. And it's
Speaker 1: just like the extra taxes that we have to pay
Speaker 1: on the sale of real estate. Um. You know, it
Speaker 1: looks terrible in their first instituting these these fees, but um,
Speaker 1: everybody gets used to it and they just pay it.
Speaker 1: What has the pandemic? How has the pandemic impacted your market?
Speaker 1: Because I think there was a lot of discussions about
Speaker 1: people leaving New York cities, even the wealthier you know
Speaker 1: for good. What impact has the pen and the cat
Speaker 1: if any, Um, it's had a huge impact. Um, it's
Speaker 1: a lot of people did leave the city, and a
Speaker 1: lot of people left the city, left their old apartments
Speaker 1: and sold their old departments and then bought Pierta tears
Speaker 1: in the city. And I see we're seeing a lot
Speaker 1: of that right now. Um, people who weren't sure they
Speaker 1: wanted to sell, but they didn't really want to keep
Speaker 1: these big, you know, family homes for years and years
Speaker 1: that they don't need. Um. So we're seeing a lot
Speaker 1: of that happening. Um. But there's so many um, you know,
Speaker 1: new people coming into the city and there's um, there's
Speaker 1: a whole resurgence of of the sales and these big
Speaker 1: family apartments. Well, it's always fun to talk real estate,
Speaker 1: fun too, especially talk with people about it. I know,
Speaker 1: I love just perusing the website. UM. Barbara, thank you
Speaker 1: so much. Look forward to checking in with you again
Speaker 1: in the future. Barbara Fox, she's president of Fox Residential Group,
Speaker 1: joining us on the phone in New York City. Millions
Speaker 1: too much, girl, There's one for nine point five at
Speaker 1: Park Avenue. Sign me up, done. I don't even need
Speaker 1: to look at it. Sight unseen