By Mike McPhate
As another round of record Wall Street bonuses beckon this winter, Manhattan luxury real estate brokers are getting ready to chase down the new wealth.
Investment banks generated record revenue this year, raising the prospect of liberal payouts. Two consulting firms have projected that bonuses would grow between ten and twenty percent from last year.
Real estate brokers expect sales to begin to hum right after Christmas—when bonuses are handed out. Richard Hamilton, Senior Vice President at Halstead Properties, said his company plans to postpone advertising newer listings until after the holidays.
“We always look forward to the kick off after the first that comes from these bonuses,” he said.
So how much apartment will the average Wall Streeter be able to afford?
A managing director at an investment bank should expect a bonus this winter of about $1.5 million, up from $1.2 million last year, according to the study by Johnson Associates, an executive compensation consultancy.
Sales are expected to be concentrated in the high-end of the real estate market—“larger, luxury apartments, townhouses and smaller investment properties,” said Corcoran broker Adrian Thompkins.
Manhattan broker Mary Ferraro said Wall Streeters are a precious target year-round. The Christmas time bonuses, she said, are simply icing on the cake.
“Many of our higher end buyers have been young two-income Wall Street couples, who have the income to support both a Manhattan property, as well as a Hamptons second home,” said Ferraro. “We have been seeing bidding wars in the $2 to 5 million price range. Just the sweet spot for the Wall Streeters who want showplace lofts in good areas with conveniences such as Whole Foods, and great restaurants nearby.”
Manhattan’s soaring rental rates will also help spur home purchases, brokers say. “Potential buyers are tired of throwing ever increasing rent money out the window,” said Robert Parker, an agent with Manhattan Realty Corp. “So, once they have that extra bonus money in hand, they are better prepared for their down payment and are ready to make that leap.”
Halstead’s Hamilton warned though that soaring bonuses don’t always mean Wall Streeters will spend like wild. “Ultimately some years the bonuses get spent more than others, sometimes they seem to bank them,” he said. “It seems to depend on the overall perceived strength of the economy and the financial markets.”
But, he added, “This year all signs seem very positive as mergers charge on and the economy in general seems strong. I expect a nice selling season from my Wall Streeters.”