2018 Holiday Tipping Guide - How Much to Tip Building Staff and More

The Holiday Season has officially kicked off. With Black Friday and Thanksgiving over, holiday decorations are going up across town. With the arrival of the Holiday Season comes the question on the mind of many - “How Much Should I Tip?”

The holiday season is always a time to give back to those that had a positive impact on our lives over the past year. One question that always comes up, especially in New York City, is how much to tip the building staff and those that are intimately involved in day-to-day life? Tipping is a major part of the Holiday Season in New York, and is a way to show appreciation to your building staff. Thus, it is important to say that it is highly encouraged, but not required. As December rolls around, many begin to get anxiety about who to tip, how much to tip, and if he or she should even tip at all. 

Our friends at Brick Underground publish a go-to holiday tipping guide, which has been circulating since 2013. We condensed it, and put our take on what is appropriate as you budget for your holiday tipping. Remember, these are simply guidelines. There are many factors that can influence the tipping decision such as the size of the building (a larger staff equates to smaller individual tips), level of service, seniority, and time in building. Additionally, owning versus renting in a building can play a big factor as well.

Of course, if you live in a building with a part-time doorman, virtual doorman, or no staff at all, the below levels could be adjusted downward.

Renters: Tips do not have to equate to the dollar amount you are paying each month for rent. If you receive a lot of packages, have a stroller that is carried in and out of the building, etc., factor this into your tip. 

It is recommended that you tip in cash. Doorman, Concierge, Supers, etc. all of bills to pay like you and I- they are not looking for fruit cakes, cookies, or homemade gifts at the holidays!

---

Tipping Guidelines

---

Super: $150-200
Doorman/Concierge: $100-150
Nanny: 1 Week Salary
Housekeeper: 1 Week Salary
Dog Walker: 1 Week Salary
Driver: 1 Week Salary
Garage Attendant: $50-$100
Personal Trainer: $100
Chef: $300-500
Personal Assistant: 1 Week Salary
Hairdresser: $50-75
Manicurist: $25

Something to Consider: If you have been tipping throughout the year utilizing a "pay as you go" method, it is customary to tip on the lighter side during the holiday season.

What Does Amazon's New Headquarters Mean for NYC Real Estate

Amazon made a big announcement this week, officially stating they New York City would be one of two locations for their HQ2, naming Long Island City as the location. When headlines broke, everyone in the real estate industry began thinking – how will this impact NYC real estate, particularly Long Island City?

The arrival of Amazon will continue the development of Long Island City and should encourage the city to invest dollars into infrastructure such as the subway system which is in dire need and buses. With the arrival of the new Amazon headquarters comes and anticipated 25,000 new, high earning employees.

Prices Likely to Rise

Long Island City has had a housing development boom in recent years with the neighborhood continually becoming more residential and less industrial. We continue to expect new units to come to market in the neighborhood in the near term. Prices have been on the up, and in fact, LIC is the priciest neighborhood within Queens.

Amazon’s announcement means there will be inherent increased interest in the neighborhood which could push prices slightly higher rather quickly, especially in terms of rent demand. It is important to note that rents in LIC luxury brands somewhat mirror that of Manhattan rents, so prices may not skyrocket in the short term, however, increased demand may motivate landlords to remove concessions that are being found on many luxury rentals. There has been an absorption issue in Long Island City given the sheer amount of inventory that has come on the market in the neighborhood in recent years.  

Impact Not Confined to Long Island City 

Anticipate price impacts to be felt in other neighborhoods as well. The influx of employees may look to other neighborhoods that still allow for easy access to LIC such as Midtown East and the Upper East Side where they may find more bang for their buck.

Being priced out of the market is still a very large issue for the NYC housing market as wages cannot keep up with cost of living for many. Because of that, we expect that the largest increase in pricing may be seen in peripheral neighborhoods that are still up and coming such as Greenpoint, Brooklyn. A new influx of residents in neighborhoods such as this could push pricing higher.

More Players than Just Amazon

While Amazon is garnering much press and attention about the location of their second US headquarters, it is important to remember that there are other plays that can contribute to this as well. Google has stated they expect to nearly double their workforce in coming years. The arrival of Amazon could further establish New York as a tech center and attract everything from Amazon competitors to start ups. What does that mean? The influx of people as a result of high paying jobs could be greater than what will be from Amazon on its own.

What You Need to Consider When Investing in Manhattan Real Estate

Have you been considering investing in real estate? Headlines and news stories may have some home owners concerned about their property purchase, or investors second guessing a decision to invest in Manhattan real estate. Like any investing, it is important to take a disciplined approach to investing in real estate guided by the advice of an expert. Analysis of over a decade of Manhattan housing data exhibited the strength of the borough to remain a sound investment compared to many of the global markets out there.

So, is all of Manhattan the same? Considering the following things when approaching Manhattan Real Estate from an investment standpoint.

Manhattan is a Resilient Market

Manhattan is somewhat a world of its own when it comes to the market and its driving factors in comparison to the larger macroeconomic landscape. The Manhattan market moves at its own pace during economic downturns as a result. We, of course, observed a large anomaly to this during the Global Financial Crisis of 2008. The crisis took down the entire global economy and impacted Manhattan housing. However, recovery in Manhattan was much quicker than that of other global centers.

During this crisis time, Entry-level luxury bounced back most rapidly. UBS Wealth Management publishes a Global Real Estate Bubble Index annually, and New York City was rated “fair value,” especially in comparison to hot markets such as San Francisco, Hong Kong, and Toronto.

Entry-Level Luxury

We have talked about entry-level price points as being key in the current market throughout many issues of Victoria’s View. In the case of Manhattan, some could argue that entry-level pricing could stretch as far as $5-6M. These are the properties that have shown exceptional price resilience over recent years in a market that some argue is slow.

Sub $3M has been especially busy the last few years. Open houses are getting a lot of foot traffic at this price point, and some properties are even experiencing bidding wars, especially those priced in the $1M range.

Why has entry level luxury faired so well? Demand is strongest at this price point in Manhattan. At this price, demand is fueled by working urbanites that are looking for their first-time home purchase, or are, perhaps, upgrading from a 1 bedroom to a 2 or 3 bedroom as they start a family.

Compared to ultra-luxury, or properties priced $10M+, entry-level luxury in Manhattan has remained more stable, largely a result of this demand from working professionals who need a place to live that we just discussed. Entry-level luxury likely has a higher buyer based composed of individuals seeking their primary residences rather than a second or third home which is often the case with buyers at ultra-luxury price points.

Volatility Factors

When you invest in stocks, you assess funds/companies/ETFs that match your identified risk profile. Risk may be assessed on things such as sector – Utilities may be considered more risk averse and less prone to price swings than a sector such as Biotech.

So, when thinking about real estate, what factors should you use to assess risk and volatility when considering your investment? Bedroom count plays a big part of real estate price movement. As a result, bedroom count can be a contributing factor to price volatility of real estate assets. One and Two-bedroom apartments are more common while 4+ bedroom apartments and large townhomes are more unique and rare, thus there is an inherent pricing question when it comes to large apartments as there is simply less historical data and comparables to which to defer.

While more bedrooms may mean more risk, more risk is often associated with the possibility of more reward. Prices of large apartments have risen dramatically since the 1980s and 1990s, however, in similar fashion, they were largely impacted during the great recession with pricing on large properties still under pressure.

via Price swings in YoY rents by bedroom count. Notice the swings in 3 bedroom rents compared to Studios and 1 Bedrooms

Pricing on one-bedroom properties have recovered from recession lows, largely fueled by the consistent demand in this space.

Intrinsic Value

Just as a company or stock has intrinsic value, so, too, does real estate. When considering investing in real estate, partner with your broker so you can identify properties that have more intrinsic value than others.

Contributing Factors

• Natural Light

• Neighborhood Stature – are there good schools nearby? Is the area established, up-and-coming, or on a decline?

• Quality Construction and Materials – your broker knows new development and construction better than you. Lean on them to advise which buildings are constructed from the best materials and workmanship

If your investment is for the purchase of generating income, we have you covered! Check out our article on What to Expect When Investing in Real Estate. If you are purchasing real estate as investment with the goal of renting out, discuss what rents look like in the builder with your broker, and how that estimated figure would stack up against anticipated mortgage and carrying costs. There are ways to extract additional value out of your investment:

Ways to Extract Additional Value out of Your Investment:

There are additional ways to squeeze a bit more rent out of your unit and also have an increased likelihood to win over a prospective tenant as they are shopping around. While some of them are an expense upfront, they are some of the most common requests we see from prospective renters. Thus, you will most likely recoup the cost of these investments into your property.

• Consider building out the closets to maximize storage with systems such as California Closets

• Install Electric Shades/Window Treatments

• Ensure the washer/dryer are good machines. It may be worth it to upgrade the machines from the base units that came with the apartment

Hiring a broker will be crucial to maximize the rent received. They are able to position your apartment on the market to appeal to the right audience and spend the time to understand the intricacies of the board package and fees.

• Price correctly! Rely on your broker’s expertise to price correctly so you can rent sooner rather than later.

• Get the condo leasing application to review the fees. That way, your broker can speak to prospective tenants about all fees associated with the unit. Additionally, this is important to understand in case you need to offer concessions to remain competitive

• Good photos matter!

• Get a floorplan of the unit to place online with the listing

Why Hudson Yards is NYC's Most Up-and-Coming Neighborhood

Long viewed as the “Far West Side”, the new Hudson Yards development contains a surplus of fine amenities, redefining the culture of the previously barren neighborhood. This 28-acre site is distinguished by its abundant square acerage, dedicated to office and residential space, as well as retail, dining and public recreation options.

A post shared by HudsonYardsNYC (@_hudsonyardsnyc) on Jul 25, 2018 at 9:41am PDT

Hudson Yards, the largest development of private real estate in U.S. history, is projected to contain over 4,000 residences within four skyscrapers, amounting to 18 million square feet of office and residential space. With 14 acres of public space, over 100 shops and 25 dining options, Hudson Yards will dominate social living in New York City.

via

With the establishment of the City’s first Neiman Marcus follows a long list of high-end retailers, such as Stewart Weitzman, Tory Burch, Lululemon, Cartier, Van Cleef & Arpels, and Rolex. Over 100 stores are complemented by the wide variety of dining options, with spots showcasing some of the worlds most renowned chefs.

Recreational conveniences include a theater, public school, park, hotel and dazzling views from the skyscrapers, providing plenty to do within the development alongside the apartment complexes and office space. With an infinite amount of activity, it’s no surprise that Hudson Yards is expected to be the “new heart of New York City”.

via

The development anticipates millions of visitors per year following its completion, who will experience the liveliness and glamour of the neighborhood, making Hudson Yards a premiere destination in New York City.

Interested in Experiencing Hudson Yards Living?

Interested in experiencing Hudson Yards living? Our latest listing, 448 West 37th Street #8A, combines the luxurious amenities of the new development with classic loft living. Only a short distance from the plethora of shops and restaurants, Apartment 8A provides a sun-filled space, boasting 12-foot windows, in addition to 1840 square foot expansive layout.

Best NYC Rooftops with Instagrammable Views

Across New York City lies a wide variety of rooftop restaurants and bars, offering sweeping views of the remarkable skyline and chic atmospheres to relax. In addition to the glamorous ambiance, these settings offer breathtaking glimpses of the boroughs that are most definitely insta-worthy. These photo-ops will have your followers liking your latest posts in no time.

The Crown

via

This rooftop bar and lounge, located on the the 21st floor of the swanky 50 Bowery Hotel, offers beaming views of Manhattan and Brooklyn, in a light-filled space. Unique dishes and drinks created by Chef Dale Talde, David Massoni, and John Bush of Three Kings Restaurant Group allow for both an enjoyable and worthwhile experience.

Loopy Doopy Rooftop Bar

A post shared by Hilton Honors (@hiltonhonors) on Jun 25, 2018 at 2:03pm PDT

Loopy Doopy offers signature, stylish popsicle coctails with a remarkable background. The bar provides impressive sights of attractions such as the New York harbor, Statue of Liberty and even the New Jersey skyline, alongside the Hudson River. This unforgettable bar has a monthly rotation of beverage flavors, allowing constant anticipation for your next return.

Westlight at the William Vale

via

Located in the saavy neighborhood of Williamsburg, Westlight at The William Vale has breathtaking panoramic views of Manhattan, with phenomenal food and drinks to complement. Especially at sunset, this rooftop offers unparalleled sights of New York City, desirable enough for a new Instagram post.

230 Fifth

A post shared by Rooftop Bars NYC (@230fifthrooftop) on Sep 7, 2017 at 11:31am PDT

230 Fifth offers unobstructed views in the heart of Manhattan, highlighting spots such as the infamous Empire State Building. This lavish hangout offers a glamorous rooftop filled with seasonal intricate cocktails, in addition to an “igloo bar” November-May. The space has both an indoor penthouse along with a rooftop garden, perfect for entertaining, as well as a casual drink.

Mr. Purple

via

Situated on the 15th floor of Hotel Indigo Lower East Side, Mr. Purple has indoor and outdoor space offering dazzling views of downtown Manhattan. This trendy rooftop contains an outdoor pool surrounded by stunning glimpses of several bridges and world-class architecture.

Salon de Ning at The Peninsula

A post shared by @y.tschk on Jul 14, 2018 at 6:16pm PDT

Salon de Ning is located in the center of Midtown Manhattan, inside the exclusive Peninsula Hotel. This rooftop lines Fifth Avenue, and has views of Central Park, as well as the bustling city below. Two terraces and an inside bar offer a relaxing setting despite the hectic scenery surrounding the area.

Guide: Celebrate Father's Day in NYC & The Hamptons

Father's Day is just around the corner on Sunday, June 17th so its time to start thinking about planning a special day for him, or, perhaps, a special gift. Father's Day does not have to mean another tie to add to his collection of hundreds. The Victoria Shtainer Team has curated a list of places to take Dad on his special day in the city and The Hamptons from a boat ride to a baseball game, we have rounded up some ideas to make his day special. 

via

Ride the Beast – Operated by Circle Line Cruises,  The Beast is a jet powered thrill-ride on the water. The Speedboat can cruise at up to 45mph – it is powered by twin jet engines after all. The Beast cruises down the Hudson River from Pier 83 to the Statue of Liberty.

Boat Departs Pier 83 at West 42nd Street every hour on the hour from 10AM-6PM. Tickets available online.

via

US Open – The 118th US Open is taking place through June 17th at the Shinnecock Golf Club in Southampton.  Ticket options range from a Gallery Ticket which provides grounds access to Shinnecock Hills to 1895 Club which gives ticket holders the ability to access the exclusive 1895 Club of Shinnecock Hills.

Tickets can be purchased online 

via

A Day in Coney Island – Head to one of the city’s most popular attractions in the Summer and enjoy a day at the beach, on the boardwalk, or at Luna Amusement Park. Be sure to make a stop at Nathan’s Famous Hot dogs – no trip to Coney Island is complete without it! Rides operate daily during the Summer season. Getting there is easy – simply hop on the D/Q/N or F train to Stillwell Avenue.

Yankees Game – The Yankees are playing at home on June 17th against the Tampa Bay Rays. What says Father’s Day like watching one of America’s favorite sports with him? It is a 12:05pm game.

via

Flashback Art Exhibition- The Hamptons is filled with art galleries, and checking out exhibitions is a great way to pass the afternoon. The White Room Gallery has the "Flashback" exhibition on through June 17th. This exhibition features iconic Portraits and Pop art from artists like Joss Parker, Seek One, David Morico, and Strosberg Mandel.

White Room Gallery: 2415 Main Street, Bridgehampton

via

Belgian Pretzels and Beer Class – Le Pain Quotidien is hosting a fun class that would make a great gift for Dad. During the Belgian Pretzel and Beer Class, he will learn how to roll, shape, and bake pretzels with a crispy exterior and doughy interior. After they are done baking, participants will enjoy the creations alongside a glass of Belgian Beer.

via

The Tasting House at Sparkling Pointe – Sparkling Pointe Vineyard is celebrating Father’s Day at their Tasting House in conjunction with The North Fork Shack. The Father’s Day event features a tasting of 3 sparkling wines paired with pulled pork sandwiches, pickled watermelon and shallot fries.

Booking can be made online - Sparkling Pointe Vineyard 39750 County Road 48, Southold, NY

Wishing a Happy Father's Day to all the Dads out there!

-The Victoria Shtainer Team

A Look Inside the 46th Annual Kips Bay Decorator Show House

The 46th annual Decorator Show House is underway, showcasing work from top interior designers. The Upper East Side townhouse at 110 East 76th Street has been completely transformed, and all for a good cause, namely the Kips Bay Boys & Girls Club. All proceeds from the events will go to the Kips Bay Boys & Girls Club which provides after school enrichment programs to more than 10,000 youth in the Bronx. 

About the Kips Bay Decorator Show House

The Upper East Side is known for its historic and grandiose townhomes, and the Lenox Hill neighborhood, the site of this year’s show house, is no exception. The row of townhomes at 110-120 East 76th Street was originally built by Augustus Hatfield in 1883-85 and are unique in that they are 36’ feet, must larger than the standard townhouse width in New York. This year’s show house, at 110 East 76th Street, has been completely reworked by Robert Couturier. Renovations on the home began in 2010. Couturier is most known for his work for billionaire financier, Sir James Goldsmith which jumpstarted his career.

His vision for this year’s show house took inspiration from past projects he completed around the globe with an emphasis on the fact that the spaces in the house are meant to live in and move about, they are not simply “stages.” The expansive townhome provided the perfect backdrop for top interior designers to showcase their work.

110 East 76th Street spans 15,000 square feet across 7 floors. Part of the renovations included incorporating modern luxuries such as an elevator, which is accessible from each of the 7 floors. The home includes 8 bedrooms and 10 baths. It is a unique opportunity to own a wide townhouse on the Upper East Side. The Master Suit of the home alone spans 1,500 square feet and includes a separate sitting room, fireplace, and double baths.

It is currently offered at $51,000,000.

Decorator Show House

The expansive townhouse residence has become a showcase of work from renowned interior designers that have donated their time and skill to create the beautiful spaces. The interior features 7 floors of living space which have been transformed into sumptuous space from a attention grabbing, statement staircase to an elegant sitting room and Clive Christian kitchen.

The interior designers have spared no attention to detail throughout the home, sourcing their decor from the likes of Hermes, Sotheby's, Bergdorf Goodman, and Roche Bobois to name a few.

Take a look at a few of the beautifully curated rooms in this year's Decorator Show House:

The Show House will be running Until May 31st 2018.

110 East 76th Street
Monday-Saturday: 11-5pm
Tuesday and Thursday: 11-8pm
Sunday: 12-5pm

Tickets can purchased online in advance by visting Kips Bay Decorator Show House. Remember, all ticket proceeds benefit the Kips Bay Boys & Girls Club.

Has the Second Avenue Subway Line Increased Real Estate Values?

via

The Second Avenue Subway line was a long time in the making and captured the New York Metro Area’s media attention for much of 2016-2017. Prior to the opening of the Second Avenue line, the Upper East Side was mainly served by the 4/5/6 subway line on Lexington Avenue. That meant many people living to the east of Lexington Avenue and toward the river had not only a hike to the closest subway, but also it was the only subway option. For this reason, some people preferred to take their real estate search to other neighborhoods with more access to public transit.

Values have Risen

The Second Avenue line on the Upper East Side has been open for a little over a year now with January 2018 marking the 1-year anniversary. So the question begs – has the opening of the subway had a positive impact for real estate in the neighborhood?

Research published by Streeteasy shows that prices in the Yorkville area of the Upper East Side rose year over year. This increase in both rents and sales comes at a time when the Manhattan market is cooling off in some respects. Sales rose 2% in price while rent rose 4% in the 12-month period. For the latter, this increase in rent prices was second only to the Financial District was has very large access to public transit and has been experience and economic rebirth in the post 9/11 era.

Increased Interest

A noticeable increase in interest has been observed in properties on Second Avenue and East because of the subway access. Within the Upper East Side, Yorkville has seen the biggest increase interest thanks to its affordability relative to other sections of the Upper East Side as well as its proximity to the new transit line.

Resale is not the only area seeing positive impacts from the Second Avenue line. Developers also bet on the area, breaking ground on projects before the line was completed and opened. Luxury developments in the area include:

·         20 East End Avenue

·         The Kent at 200 East 95th Street

·         Citizens 360 at 360 East 89th Street

·         389 East 89th Street

Those that took the risk and bought before the subway got a discount and are now reaping the rewards! We expect that the Upper East Side will continue to have a robust market with increased interests.

Second Avenue is home to many great restaurants and bars and new additions keep opening from food to fitness. Some favorite and notable locations along Second Avenue include:

• Quality Eats
• A La Turka
• Maison Kaiser
• Two Little Red Hens
• Ripped

The Victoria Shtainer Team’s Exclusive Upper East Side Opportunities:

408 East 79th Street, 17AB

Convertible 5 Bed | 5 Bath | $7,395,000

1355 1st Avenue, 6th Floor

4 Bed | 4.5 Bath | $6,495,000

Why Live on the Upper East Side?

The Upper East Side is known for its neighborhood feel and expensive Park Avenue apartments, steeped in rich history dating back to America’s most prominent families. The Carnegies, 

Rockefellers, and Kennedys have all called the Upper East Side Home. Today, the neighborhood attracts a variety of different demographics and has housing options that span many price ranges.

People are attracted to the Upper East Side and call it home for a myriad of reasons ranging from selection of schools to restaurants, shopping, and culture. It is a great neighborhood for first-time city dwellers as well as established families because of the diversity of properties available in the area. The neighborhood feel of the Upper East Side extends a welcoming hand to all.

Some felt that the Upper East Side was somewhat out of reach because the 4/5/6 was the main artery in and out of the neighborhood, leaving people on the east side of the area having to walk to Lexington Avenue to get downtown. With the opening of the Second Avenue Subway, the neighborhood and all of its perks have become even more accessible, and properties on the far east side of felt a positive impact.

Whether you are looking for home close to great close, coffee shops, museums, or shopping, the Upper East Side offers it all! Download our Upper East Side neighborhood guide to learn more about the neighborhood and why we love it.

Some of our neighborhood favorites include:

Restaurants:

• Mr Chow
• Flex Mussels
• Haru
• Philippe
• Elio's
• Campagnola
• Sushi by Gari
• Jo Jo's
• Cafe Boulud
• Morini
• The Mark Restaurant
• La Goloue
• Jade Sixty

Coffee:

• Nespresso boutique on 74th and Madison
• Joe's Coffee
• Birch Coffee
• Sant Ambroeus

Workouts:

• Equinox
• Soulcycle
• Flywheel
• Rumble
• Hot Yoga
• Ripped

Gourmet Grocery:

• Citarella
• Whole Foods
• Fairway
• Dean & Deluca

Salons:

• Warren Tricomi
• Drybar

Museums:

• Metropolitan
• Jewish Museum
• Frick Collection
• Met Breuer
• Neue Galerie
• Guggenheim

Schools:

• Chapin
• Brearley
• Buckley
• Spence
• Dalton
• Garden House School
• Town
• Lycee Francais

Parks:

• Central Park
• John Jay Park
• Carl Schultz Park

Featured Upper East Side Listings:

 408 East 79th Street, 17AB

Convertible 5 Bed | 5 Bath | $7,395,000

Apartment 17AB is a convertible five bedroom, five bathroom home with a private elevator landing in one of the Upper East Side's best condominium buildings. Meticulously designed by Weitzman Halpern, this 3,836 square foot home with 10 foot ceilings offers soaring views in every direction. Generously proportioned living and entertainment rooms make this home ideal for gatherings and entertainment. The Arcadia was designed by famed architectural firm Costas Kondylis and includes a private gym with beautiful skylight, stretching room and massage room, children's playroom, newly developed teen game room, bike room, storage, library and 24 hour doorman and concierge. 

SEE FULL LISTING

1355 First Avenue, 6th Floor

4 Bed | 4.5 Bath | $6,995,000

The 6th Floor at The Charles Condominium is a spectacular full-floor home with four bedrooms, four and half bathrooms, and complete luxury design work from Interior Design Aman Meeks. At 3,637 square feet, this is truly a special opportunity to own a gracious and pristine condo unit on the Upper East Side.

SEE FULL LISTING

2018 Outlook: What to Expect for the New York City Real Estate Market

Many people have been asking what we expect for the Real Estate market in 2018. While it is a bit early to tell the impact of one of the major items at play in 2018, namely tax reform, 2018 looks to be favorable for the real estate markets largely due in part to a strong job market and strengthening economies globally. We have broken down our 2018 outlook into 4 key areas – tax reform, economic backdrop, inventory, and rentals

Tax Reform

The new tax law is likely to be the most impactful to the 2018 real estate market compared to our other key areas, and is a large element of uncertainty for the housing market. This sweeping overhaul with changes from personal to corporate taxes has provisions that are expected to impact real estate markets, especially in high tax states such as New York, New Jersey, and California.

The 2 changes to be most aware of in the bill are the capping of State and Local deductions to $10,000 and the reduction of the Mortgage Interest Deduction from $1MM to $750,000. Both of these changes could make owning a home more expensive than previously planned for some individuals and impact the amount being considered to mortgage a home.

We are only 10 days into the New Year, so the impact of changes are still unclear. Q4 2017 activity was strong, and historically Q4 momentum carries in to the beginning of the following year. We see 2 possible scenarios that could unfold as a result of the tax changes:

• Pace of sales slows at the beginning of 2018 as buyers might pause and speak to their accountants in an effort to try to better understand their new tax picture before making a purchase. In this scenario, we see downward pressure on pricing.
• Volume and Pace of transactions from Q4 continues into 2018 as buyers may recognize that the uncertainty that may be instilled in some regarding tax reform creates opportunity, and they seize this opportunity. Additionally, buyers are likely armed with padded investment accounts and year-end bonuses.

Regardless of scenario, the largest impact of the tax bill is likely to influence buyers in the $1M+ to $5M price range.

Economic Backdrop

Moving into 2018, there are a lot of favorable economic indicators that create a favorable backdrop for housing. It is important to remember that the real estate markets are highly correlated to both the job and stock markets. Economies around the world are expected to grow in 2018 with some foreign economies outpacing U.S. growth – could foreign buyers increase in 2018?

Here in the U.S., the Fed increased their growth outlook for 2018 in their minutes released in December. Their notes utilize language that suggests a job market that will continue to remain strong, and, perhaps, grow slightly while being accompanied by rising wages. This is a positive for the housing market. Additionally, the Fed is currently suggesting 3 rate hikes in 2018 as Yellen’s term comes to an end.

The consensus among analysts is that equity markets will continue to rise in 2018. While the magnitude of the rise may not be as large as in 2017, gains will continue to add to already large investment accounts.

Inventory

We expect high inventory in the luxury market to persist in 2018, or increase with additional new condo inventory coming to market.  Developers are continuing to reshape the New York City skyline in partnership with some of the best names in architecture. Projects like 125 Greenwich and 262 Fifth Avenue will increase luxury condo inventory. Increased inventory at the higher end of the market will continue to pressure pricing at this level.

To remain competitive with the pool of wealthy buyers, we expect developments to continue to push the bar. Central Park Tower is a great example of this as they are trying to allure global titans to call the building home for their pied-a-terres or place to park money in the US market. Over-the-top amenities will continue to be the norm in both condo and rental buildings.

Rentals

The rental market peaked in 2017 after being on a march higher for quite some years. We all saw the rental market take a turn in 2017 with rents seemingly dropping across the board. We expect concessions to remain at all-time highs throughout 2018. Landlords will need concessions to lure tenants to their units. The continued pipeline of new inventory that will come on the market should cap rental prices from overly rises in 2018. However, the continued attraction of New York – labor market, culture, etc. will serve as a floor for rental prices so we do not expect any large scale drops in 2018.