Will Bonuses Make an Impact on the NYC Real Estate Market This Year?
The new year has arrived and company employee bonuses are beginning to roll out, though it is unknown if they are high or low. But do bonuses, always mean big spending? With big investment items, such as real estate, there is the question of whether these bonuses in fact make an impact on the NYC market or not. Now, from top real estate brokers, are a few (varied) 2020 predictions of how bonuses will affect this year’s real estate market.
Broker Robin Kencel of Compass Realty believes bonuses could be lower, but buyers will still go for it.
“From what I am hearing, bonuses on Wall Street will be flat to slightly lower this year. That said, while buyers in the ‘80s and ‘90s included bonuses as part of their income (projecting future bonuses as well), today’s buyers are much more conservative with how they view their income, as are mortgage lenders. The past 14 years have strongly taught the lesson that what has been in the past, may not be the future, and buyers have taken the lesson to heart. So, while bonuses may not be what everyone hoped for this year, it is not deterring our normal flow of buyer traffic ready to make the move from Manhattan.”
Agent Noemi Bitterman of Warburg Realty is optimistic that bonuses will help the market.
“The fact that there is a bonus season is already a good and positive indicator of where and how we live. From what I have heard, it will be mixed. Although the stock market is thriving not everything in business is thriving, so some will get lots as a bonus and some will get less, however there will still be a bonus season and people with money will spend it on big ticket items like real estate. We are in a buyer’s market and prices have shifted and are at market value. We would all like a crystal ball to tell what will be next, but most people have a positive outlook. All in all, the real estate market is stabilizing and it is active, let’s work towards keeping it that way.
Broker Martin Eiden of Compass Realty notes how the structure of today’s bonuses make buying a multi-year plan for some.
“In the good old days of the 2000s, people got their bonuses in one lump sum. The savvy people who got bonuses, would live on their good (but modest compared to their bonus) salary and buy big ticket items with their bonus. The super-savvy ones bought real estate. This, I dealt with first time buyers buying 1-3 million dollar properties.
Fast forward to 2020…Bonuses today are spread out over three years, not one lump sum. As such, people who earn most of their income need to wait three years to realize what used to be gotten in one.
As a result, buying big ticket real estate property is a multi-year plan. If the market seems bad, many buyers have no problem waiting one more year since they already waited for three. So bonus season is important and many people use it to buy property. However the multi-year distribution tempers ‘flash buying’.
I predict this year will be good for real estate even if bonuses are down. Many buyers waited last year expecting prices to fall. They have. Buyers are back scooping up deals.”