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Speaker 1: Broadcasting live to New York, Bloomberg eleven bo to Washington,

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Speaker 1: d C, Bloomberg to Boston, Bloomberg twelve hundred to San Francisco,

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Speaker 1: Bloomberg to the countries that general one and around the

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Speaker 1: globe the Bloomberg Radio plus DAP and Bloomberg got gone.

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Speaker 1: This is taking stock. I'm cafein Hayes along with him Fox,

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Speaker 1: the Federal Reserve in focus, and we're taking this opportunity

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Speaker 1: to speak to the president of Halsted Property, Richard Grossman,

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Speaker 1: about the outlook for New York City real estate against

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Speaker 1: the backdrop of a central bank that looks like it's

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Speaker 1: getting ready to hike the key rate. What really counts

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Speaker 1: now for investors? Pan, Yes, Well, speaking with Richard Grossman,

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Speaker 1: as you said, he's the president of Hall staid you

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Speaker 1: know that Halstead closed on over a thousand sales last

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Speaker 1: year with a value of more than one point to

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Speaker 1: billion of dollars. We're gonna find out about the real

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Speaker 1: estate market, but right now, let's find out about news

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Speaker 1: from Charles tell it in the Bloomberg News and I

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Speaker 1: think him Fox. Thank you, Kathleen Hayes, the DAL the SMP,

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Speaker 1: Nez Stack, they are all trading higher, and this update

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Speaker 1: is brought to you by s e I. In the future,

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Speaker 1: the asset management business will be profoundly different. Find out

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Speaker 1: how s c i s global operating platform can help

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Speaker 1: you navigate the new operational frontier at se i C

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Speaker 1: dot com. Slash Imagine SMP five index snapped two day

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Speaker 1: drop after data showed acceleration in the manufacturing and services sector.

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Speaker 1: Ernesto Ramos is head of Equities at BEMO Asset Management.

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Speaker 1: He was interviewed this morning on Bloomberg. I think the

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Speaker 1: market is expecting, correctly from the tightening cycle to continue

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Speaker 1: in December and in another TEFs to take place, and

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Speaker 1: we don't. The market in general is slightly expensively valid

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Speaker 1: because it's sustained by these low levels of interest rates,

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Speaker 1: and as with those interests most higher, there is downside

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Speaker 1: risk to the right. Now we've got the tenure down,

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Speaker 1: the eleven thirty seconds, the yield one point seven two percent.

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Speaker 1: Join us tomorrow and Friday morning on Bloomberg Surveillance for

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Speaker 1: special broadcast live from the annual and Fall meetings of

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Speaker 1: the International Military Fund and the World Bank in Washington,

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Speaker 1: d c. Our guests include former i m F special

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Speaker 1: advisor John Lipsky, EU Commissioner Pierre Moscovici, and an exclusive

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Speaker 1: interview with I m F Managing director Christine Legarde starks

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Speaker 1: high r s and p up eleven A gain of

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Speaker 1: five tenths of one percent of sixty one the dalop

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Speaker 1: one twenty six gold down fifty cents to twelve sixty

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Speaker 1: nine meons and now at two thirty two on Wall Street.

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Speaker 1: A look at the other stories making news. Thank you

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Speaker 1: Charlie from the Bloomberg News room. I Rami in essent cio.

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Speaker 1: The UN Security Council has unanimously agreed that Portugal's former

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Speaker 1: Prime Minister and Tonio Guterres should be the next Secretary

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Speaker 1: General of the United Nations. Guterres served as the U

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Speaker 1: n's refugee chief until last December. The Security Council will

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Speaker 1: meet tomorrow morning to formally approve gu terrorists and recommend

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Speaker 1: his candidacy to the General Assembly, which must give final approval.

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Speaker 1: The class at last night's vice presidential debate over Donald

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Speaker 1: trump stance on Mexican immigrants has struck a chord on

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Speaker 1: the internet. Bloomberg's Bob Moon reports it is the VP

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Speaker 1: debate phrase that's taken on a life of its own.

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Speaker 1: Senator that you you whipped out that Mexican thing again. Today,

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Speaker 1: the Twitter hashtag that Mexican Thing continues to be a

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Speaker 1: rallying cry for Mexican immigrants, with tweets like that Mexican

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Speaker 1: thing is my mom, who worked as a housekeeper for

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Speaker 1: twenty five years to see your family's dreams come true.

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Speaker 1: At the same time, Wired reports a Clinton supporter snatched

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Speaker 1: up the web address that Mexican thing dot com and

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Speaker 1: redirected at the Hillary Clinton's website, while a Latino advocacy

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Speaker 1: group is urging voters to register at that Mexican thing

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Speaker 1: dot org. Bob Moon Bloomberg Radio. Governor Andrew Cuomo is

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Speaker 1: denying an allegation that he and New Jersey Governor Chris

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Speaker 1: Christie discussed using a false report surrounding the George Washington

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Speaker 1: Bridge Lane Close Your Scandal. Cuomo told reporters today to

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Speaker 1: claim from a key witness in the trial of two

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Speaker 1: former Christie aids amounts to inaccurate, quote, gossip and hearsay.

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Speaker 1: David Wildstein is cooperating with authorities. He testified that former

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Speaker 1: Port Authority chairman David Sampson told him the two governors

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Speaker 1: discussed issuing a report when reporters began looking into the

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Speaker 1: lane closures. Global News twenty four hours a day, powered

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Speaker 1: by more than journalists and analysts in more than one

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Speaker 1: twenty countries. I'm Rainy in essensio. This is Bloomberg, Charlie,

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Speaker 1: and we thank you, and again recapping the DAL the

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Speaker 1: SMP neztac at or near the best level of the day,

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Speaker 1: SMP five index up eleven to one, a gain of

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Speaker 1: five tenth of one percent. I'm Charlie Palatin. That's sub

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Speaker 1: Bloombred Business Flash. This is taking stock the FED in

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Speaker 1: focus on Bloomberg Radio, the FED in focus the availability

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Speaker 1: of a credit. Let's find out more when credit is

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Speaker 1: applied to the real the state industry. Richard Grossman is

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Speaker 1: the president of Hallstead Property and he joins us now. Richard,

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Speaker 1: thank you very much for coming in. And by the way,

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Speaker 1: congratulations because I believe this year you were made president

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Speaker 1: of Hallstead. Yes, thank you very much. In fact, I

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Speaker 1: became president this past spring. Alright, so congratulations just in

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Speaker 1: time perhaps for what maybe a softening of the real

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Speaker 1: estate market or tell us the state of the market,

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Speaker 1: and then we'll talk about financing. Sure. I mean the

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Speaker 1: state of the market is in New York there's first older,

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Speaker 1: a lot of different markets going on at the same time.

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Speaker 1: Either the markets say above five ten million dollars, we're

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Speaker 1: looking at one sort of market where there's probably too

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Speaker 1: much inventory in that area right now. And there's the

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Speaker 1: market that I would say below three to five million.

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Speaker 1: Below you really see that maybe the everyday person's market,

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Speaker 1: there is still a shortage of what is available and

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Speaker 1: properly priced things are selling. It's sorry, Kathy, I just

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Speaker 1: want to add, you know only and you would actually

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Speaker 1: I think, maybe comment on this, but average for three

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Speaker 1: million to five million, I mean, the rest of the

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Speaker 1: country doesn't think that that's I mean, it's amazing statistic,

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Speaker 1: isn't it correct? It is an amazing thing in New

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Speaker 1: York City to see prices at that level. Of course,

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Speaker 1: it's it also depends on a lot, still, doesn't it

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Speaker 1: on where in New York City you want to buy,

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Speaker 1: Because Manhattan is is one market versus Riverdale versus you know,

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Speaker 1: beans and and even Dick Queen's many different parts. Correct,

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Speaker 1: And in Manhattan even there as many different markets within

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Speaker 1: the same size. There's billionaires Row that's one market. There's

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Speaker 1: the Upper east Side, Upper west Side, the Village, Murray Hill,

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Speaker 1: UM and different places. And there are emerging markets Queens

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Speaker 1: and the Bronx. Quite frankly, our markets that we're seeing

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Speaker 1: still upside potential in those marketplaces, our developers starting to say,

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Speaker 1: you know, we've kind of saturated the top and it's

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Speaker 1: nice to sell those super luxury expensive ones. Are they

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Speaker 1: starting to say, you know, there's still so much demand

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Speaker 1: where I can make money if I just I'm building

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Speaker 1: more units that the more people can afford. Sure, in

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Speaker 1: certain marketplaces, they're certainly doing that, and that's why you're

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Speaker 1: seeing places like Queens and Brooklyn so much construction activity there.

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Speaker 1: In Manhattan, the construction activity for two in two thousand

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Speaker 1: and sixteen has certainly slowed down. We went from last

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Speaker 1: year about fifteen thousand new building permits um we're issued

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Speaker 1: that includes cops and excuse me, condominiums and rental housing.

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Speaker 1: This year that's down to six hundred and fifty. So

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Speaker 1: the top of the market, there's probably about a thousand

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Speaker 1: units coming in at the prices at ten million dollars

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Speaker 1: and above, and we absorbed that at about fifty units

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Speaker 1: plus or minus fifty seventy five units per year. Tell

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Speaker 1: us about the mortgage market. Is it easy to get

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Speaker 1: a mortgage? It's more it's it's it's more difficult to

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Speaker 1: get a mortgage today than it was let's say, eight

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Speaker 1: years ago before pre Layman. They're still gonna be looking

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Speaker 1: at good credit scores, They're still gonna be looking at

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Speaker 1: a larger down payment than they did in the past,

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Speaker 1: and they're gonna put It's it's not how much how

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Speaker 1: much would you have to put down? Typically in New

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Speaker 1: York City you're probably looking but down a minimum ten

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Speaker 1: percent and and not a typically twenty because most of

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Speaker 1: our housing is cooperative, and most of the buyers who

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Speaker 1: are buying in New York City been at these price points,

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Speaker 1: is points are putting large down payments down. So is

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Speaker 1: it a case where Okay, we know the Federal Reserve

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Speaker 1: is getting ready to hike the key rate, and they

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Speaker 1: may just take it once this year, and who knows

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Speaker 1: if they're gonna you know, one or two next year.

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Speaker 1: It isn't much, but it could help move mortgage rates up.

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Speaker 1: If if ten you're the bond market sells off and

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Speaker 1: the yields on, you know, that's how the mortgage is

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Speaker 1: really priced. They don't price on the short end. But

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Speaker 1: I guess my question is more along the lines of

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Speaker 1: does it make that much difference to buyers right now?

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Speaker 1: If I have a job, if I can afford the

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Speaker 1: down payment, does it make much difference? How much that

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Speaker 1: moere I. I don't think it's going to make a

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Speaker 1: difference in in in absolute dollars. I think that buyers,

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Speaker 1: you know, if interest rates go up, you know, two

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Speaker 1: or three percent, I think you're gonna start seeing some

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Speaker 1: effect in the marketplace. But if you get a half

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Speaker 1: a point a point a point and a half rise

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Speaker 1: of the interest rates, I think people are expecting that

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Speaker 1: and be at these price points and would amount they're

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Speaker 1: putting down they can afford to. They can afford this,

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Speaker 1: not just not to keep it so a New York

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Speaker 1: centric all the time? Where are buyers coming from? Where

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Speaker 1: do you see the most activity and the healthy uh

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Speaker 1: participation of potential owners? Well, I mean, you know, the

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Speaker 1: New York cities and international city, so we see buyers

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Speaker 1: coming from all over the world. That's still true today

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Speaker 1: as we've seen in the past. That said, our market

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Speaker 1: is for a local market is a very healthy market.

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Speaker 1: Chances are the person who's going to be buying your

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Speaker 1: apartment in your home um is going to be a

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Speaker 1: New York based person buying for them for their own

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Speaker 1: uses of primary residence. So, uh, what would have to

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Speaker 1: happen for And I'm I'm thinking of potential buyers out

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Speaker 1: there who just wish it prices would cool off a bit.

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Speaker 1: What would have to happen to really knock prices back

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Speaker 1: down significantly in New York City? I think you'd have

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Speaker 1: to see a recession. And I don't think a recession

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Speaker 1: is on the offering in offering a New York City

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Speaker 1: in the next few years. Why, I think the unemployment

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Speaker 1: is good, interest rates are low UM and all the

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Speaker 1: and and and we're not building enough housing to to

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Speaker 1: to saturate the demand for middle class housing in New

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Speaker 1: York City. And I'm talking middle class housing three three

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Speaker 1: to five million below housing as an investment worthwhile right

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Speaker 1: now as your primary residents, I think it's absolutely great

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Speaker 1: investment to have as a spectral h of investment. It

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Speaker 1: could be, but you have to have the risk to

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Speaker 1: take that. There may be some ups and downs along

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Speaker 1: the way. If I want a great buy, where did

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Speaker 1: I look right now in this area, I would look

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Speaker 1: in a few places. I would look in Queens, I

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Speaker 1: would look in the Bronx. I would certainly still look

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Speaker 1: in uh in parts of Brooklyn. And if you're looking

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Speaker 1: outside of New York City itself, I would certainly say,

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Speaker 1: you know, going to some of the suburbs with this

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Speaker 1: um Westchester, Fairfield County, in the northern suburbs of New

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Speaker 1: Jersey are phenomenal opportunities. Right now, Boy, what maybe I'll

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Speaker 1: just I'll just take Richard Grossman of Halstood Property along

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Speaker 1: with me on the hunt, President of Hallstad Property as

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Speaker 1: of spring twenties sixteen. Richard, thanks for joining us in

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Speaker 1: studio today. Thank you for having me much appreciated. So

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Speaker 1: from New York City, Manhattan real estate to Johannesburg and

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Speaker 1: stocks that's coming up. I'm Kathene Hayes along with Pim

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Speaker 1: Fox and this is Bloomberg. Coming up on taking stock,

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Speaker 1: will be speaking with the chief executive of the Johannesburg

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Speaker 1: Stock Exchange, Nicky Newton Kane, talking about US rates and

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Speaker 1: the effect on the South African ran That's next