ICYMI: Big Moves in Big Apple Real Estate

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1:50Bloomberg Audio Studios, podcasts, radio, news. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. Let's talk real estate, because earlier this month, our Bloomberg News team reported that Manhattan home sales in the second quarter were stronger than they've been in almost two years. boosted by cash buyers who've been undeterred by the economic uncertainty created by President Trump's trade war. We got some numbers here. A little more than 3 ,000 co-op and condo purchases closed during the quarter. That's a 17 % jump from a year earlier. That's according to Miller Samuel and the brokerage Doug Elliman.

2:29The median price of those transactions,$1.2 million. That's up 1.6%. I love this cash buyers. All right. So we're wondering what Louise Phillips Forbes is seeing. She's a real estate broker with Brown Harris-Steven. She's been in the industry for more than three decades. We love kind of picking her brain about what's going on. She's got close to$6 billion in sales during her tenure. She's back with us here in our Bloomberg Interactive Broker Studio. Hello, hello.

2:52Louise Phillips Forbes:Hi, good to see you guys. Good to see you. So where are we? Give us a snapshot of the market right now. You know, you just did that little snapshot of the quarter. I did a little snapshot from May and June for 2024 compared to 2025. And there was a 72 % volume and price sales. So it went from 1.4 billion in sales to 2.4 billion. So almost a doubling. Almost. And then you also had a 25 % on the number of transactions. This is all 4 million and above. And on an average of those two months in 2024, they were 8.2 million. This year, they're 11 million. So, you know, chaos is opportunity for many and cash on those deals is 90, 90%.

3:42Louise Phillips Forbes:That's a lot. So it's kind of interesting. I mean, I talk to my bankers all the time and they are busy. They are busy, but on the lower end and people are closing with cash and then they're, they're pulling out, you know, cash back. Okay. We spoke to Peter Aukenblum, Ocker Bloom, Chief Revenue Officer at Sentient Jet, just earlier this week. That was Monday? Yeah, that was Monday. It's been a long week already. A lifetime ago. Yeah. It was also the day that FlexJet announced this, another private jet firm owned by the same parent company, announced this investment. And they basically said, we're seeing wealthy people from tech and crypto, younger people from tech and crypto want private jets.

4:27We're seeing our demographic go younger and we're seeing crypto. That doesn't surprise me. Is that happening to you?

4:32Louise Phillips Forbes:I think that the assets, first of all, let's just kind of bring it down for one second and remember that the first time buyer today on an average is pushing 40 years old. That's different from that millennial run that we had in the construction boom. But even in New York, right? Even in New York, particularly in New York, to be honest. and I'm seeing more and more first-time buyers that are purchasing that are having family members, multi-generational family members, like grandmothers, like instead of inheriting this, I'm giving it to you or I'll co-purchase with you with the right to survive.

5:09So listen,

5:11Louise Phillips Forbes:creativity is, we're in Mecca, so people are going to be creative to buy a piece of the rock. And I do think the, you know, new money and I've seen it, watch the tech commitment from the first announcement of Google in 2005 with like 48 employees morphed to 500 to 2 ,500. And you see that we are now becoming a hub for tech. And as you run up against the housing issues that are in California, we're attractive. You know, we can get insurance for our apartments. Do we stay attractive even if Zoran Mamdani wins the mayoral race next year? You mean our Robin Hood? You mean the Robin Hood rhetoric? I mean, listen, I know this person cares about New Yorkers.

6:00Louise Phillips Forbes:I believe that. I believe wholeheartedly that his intentions are stellar. But, you know, the ideology around real estate is not a conversation. It's action. It's infrastructure. It's collaboration, public-private. And, you know, we just crawled out of five years of COVID. We now have 64 million last year in tourism. You know, the crime is down. You have people back in the office. So freezing rent is doing nothing. And it's also suggesting that landlords are all on their yachts doing nothing and that they should be paying for the opportunity for somebody else to be able to pay rent. But there's so many landlords that are just skinning by because they were postponed from allowing people who weren't paying rent.

6:56So, Louise, you know, Tim and I talk about this a lot. And I feel like when we have real estate discussions and the idea of providing affordable homes in kind of major cities where a lot of people work. So that you don't have individuals who are maybe not making that much money having to travel an hour or two in order to work. So what's, what's, cause I've been talking about this, like my whole career, how, you know, this industry, how do we do this so that there is affordable homes in the places where people are working?

7:25Louise Phillips Forbes:I mean, when I came into the business, they had something called 421As. There were certificates that when you improve a land, there's an unimproved land. And remember Bloomberg, thank you. 12 years of, you know, rezoning, you know, probably 40 % of our land mass, which has helped that situation. And when you build in the middle of, I don't know, I mean, they used to have these tax certificates that when developers would improve land, they would get a 421A tax abatement. It's a 10-year abatement on your taxes. And then for that certificate, they would then go and sell it for somebody to do affordable housing somewhere else.

8:09Louise Phillips Forbes:That has gone away. Was that affordable house, though, still in New York City? Yes. And by the way, people would say, well, we don't want to just be in the Bronx and in far parts of Brooklyn or Queens. But honestly, there's nothing wrong with those parts, but you want a mixture. And I just think that it has to be thoughtful and it has to be collaborative. And it can't be just somebody who isn't practically experiencing these things, making rules up like, you know, the city councilman that wants to have that has good intentions around broker fees. Well, rentals as of June 11th are up 15 percent because they've just passed it all off to the consumer.

8:56Louise Phillips Forbes:And so unintentional consequences when lawmakers don't want to collaborate with the industry individuals as well as just regular people if it's only politicians making these decisions and not working with their people. I think there's always a concern though that the people who are renting don't have the voice and don't have a seat at the table. You know what I mean? And so New York City is 68 percent. It's a city of renters. Yeah. Yeah. We're speaking with Louise Phillips Forbes. She's real estate broker with Brown Harris Stevens, close to$6 billion in sales over the last 30 plus years. She's back with us in the Bloomberg Interactive Brokers Studio.

9:34I want to get to know your clients a little bit and how they're different than they were, let's say a year ago. The people who are selling real estate with you right now, why are they selling and where are they moving?

9:49Wow.

9:49Louise Phillips Forbes:I mean, a lot of it is life change, you know, but I'm, I have people that have been contemplating selling since 2020 that are now selling because there's a lack of inventory, what their apartments were not worth in 2023 are worth what they would like and they'll accept it. So look, a lot of people are downsizing and staying in the city. They are people that are leaving, but that's a life decision that is a cycle of life. I mean, I have a lot of people coming back into the city because their grandkids and their kids are here. So who are my sellers? My sellers range from like a one bedroom for$650 ,000 to, and that's somebody who bought, who now is leaving the city and loved owning her home.

10:45Louise Phillips Forbes:And she's ready for a new chapter in Colorado. And then you have a$16 million penthouse, which is from one of my developers that will be coming on the market in September on the Upper West Side. And I just think there's just not enough inventory. Inventory is 21 % down. And that is the first time we've experienced that since COVID as well. It's amazing because sometimes it feels like there's a ton of building and stuff going on. Hey, before you go, we've got a minute and a half left. Tell us about what you're seeing in terms of international purchases. They're coming. They're coming. And it's doubled since 2024, particularly the Chinese market.

11:21Louise Phillips Forbes:I mean, when you are dealing with strife in your government and, you know, the housing market in Beijing is kind of upside down. I'm not familiar with that market particularly, but in all of the appointments that I've had in all the various condominiums, they are buying. Some of them are buying with the anticipation of their children in the future to be going to school here. Where are they buying? All over, but new developments particularly. That has always been in Manhattan, Brooklyn, Long Island City. We were talking earlier about there are some developers that are leaning into the Asian market by accepting deposits that are in the Chinese, the yuan.

12:07Louise Phillips Forbes:And that is because they are being nimble. We have to be nimble. But that's new. That's relatively new. There are two projects in particular. One is in Long Island City. And this was news for me a couple months ago. Russian buyers gone? Yeah. No. No. Quiet. Quiet. Coming back? Quietly trying to acquire or place assets. But not as big as what we experienced when you had the$88 million 15 Central Park West transaction. It's not like that anymore. Middle Eastern? Not quite. Middle Eastern buyers? Yep. And you have also, I think, I have had three different Korean transactions this year. I think they're quite French.

12:53Louise Phillips Forbes:I mean, I think people are trying to come here. There's, you know, jargon around the Canadians not being happy. If President Trump does away with a capital gains tax on house sales, which he kind of talked about this week from the Oval Office, what would that mean? and just got 25 seconds. Just to remind everybody, when Bush was in the house in 2012 and he reduced the capital gains to fuel, our market went on fire in 12 and 13. Just for that, that was like the people that lived on Park Avenue and Fifth Avenue for four decades finally sold. I can only imagine. Louise Phillips Forbes, always fun to check in with you.

13:36Be well, be well. Real estate broker, Brown Harris Stevens, joining us in our Bloomberg Interactive Broker Studio. This is Bloomberg.

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