NY Lawmakers Approve Final Budget That Includes Second-Home Tax

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2:05Let's talk about that index of overall market conditions from the National Association of Homebuilders in Wells Fargo. It fell two points to 35 this month. That's according to data released on Monday. It's lower, Carol, in the 37 anticipated by economists in a Bloomberg survey. The South, this is interesting. It's the nation's largest homebuilding region, saw its biggest decline going back to November 2023.

2:25Carol Massar:I'm not surprised because it's gotten a little overheated. certainly in the Southeast in some markets. Hey, we are curious, though, about what's going on in New York City. It's a real estate market we're all obsessed with. A story comes across the Bloomberg about real estate in New York City. It is among the most read. For more, we're joined by Lisa Lippman. She's a real estate agent with Brown Harris Stevens. She's been in the industry for nearly three decades, had more than$500 million in transaction volume in 2025 alone. What? Oh, my God. She's here in studio. our Bloomberg Interactive Broker Studio.

2:58Is that a lot? That's a ton. It feels like a ton. It's a lot. I mean, you know, I've been the number one person at Brown Harris for 11 years in a row. Congratulations. Thank you. And in prior years, I was doing someplace between$210 and$290,$300 million per year. Last year was a really big year. I think, you know, partially it's sort of the progression of time, right? So I have a lot of repeat business. the people get wealthier, they come back to me at higher price points, you work in that price point, more people in that price point come to you. And then I also had a couple of really large sales that contributed to it.

3:36And I worked really, really hard last year, I became an empty nester that the fall of 2024, my youngest child went away, he actually did a gap year. And, you know, it just, I guess I thought maybe I'd pick up the guitar or Mahjong or something, but I just worked more. So I did it. How's this year looking? This year is definitely headed in the right direction. I honestly, like, I don't ever think I'm going to do that volume again. And, you know, in some ways I say that's okay with me. Of course, it would be great to do it. But I do think that last year was a bit anomalous because I'm one person.

4:15I have a very small team. There's only five of us. So, you know, you do see those large numbers with agents who have very large teams. You sometimes see those numbers with agents who sit on big buildings where they're selling only really expensive big listings. Having said that, they don't get paid necessarily on that volume. And you should know that because it's sometimes, you know, you're selling 700 million worth of business, but the commission on it is very low. Because they struck a deal with the developer. And you're dividing amongst five other agents who are on the building. So, you know, last year was a really good year for me.

4:48And I kind of take it as I put money in the bank and it's a great year. And I'll probably go back to doing my really good years again, but not that.

4:57Carol Massar:Are any of, okay. So when you're dealing with, you know, wealthier individuals, do they care about the interest rate? Like, do things like that matter? Are they doing mostly cash deals? Like, I'm just curious because a lot of times when we talk about the housing market in general, or the real estate market, when it comes to purchasing, certainly for like first-time homebuyers. We watch what's going on in the rates market. Does it matter to a lot of your clientele? So, you know, generally when you're talking about over seven or eight million dollar purchases, interest rates become basically immaterial.

5:27And I say basically because, you know, people who are spending over eight, ten million dollars know what's going on, right? They're very much in the business world. So when they're negotiating, when they're making a deal, they're going to think about the fact that interest rates are higher. So they feel that they should have more buying power as a cash buyer because interest rates are higher. And they're not wrong. So anecdotally, it matters. Does it actually matter? No, because they were never going to finance. But they do think about it. And of course, it changes the equation. Because when interest rates were very low, we had people spending over$8 or$10 million who were really financing a very large portion.

6:10And now the people spending that kind of money are really just cash buyers. Interesting.

6:15Carol Massar:That's because money didn't cost them anything a few years ago, right? Correct. And, you know, maybe interest rates were too low. Yeah. So I'm curious about just migration patterns that you're seeing right now among the folks who buy and sell with you. If we were having this conversation in 2020, 2021, I imagine some of it would be, okay, well, people are leaving the city. They're going to the suburbs. Some are going to Florida. There was that great Wall Street Journal story a few weeks ago that was like, well, actually, the people who are moving to Florida are still keeping apartments here in New York because they have their relationship with their doctors.

6:44I thought that was kind of funny. What are the migration patterns that you're seeing among your clientele? I see just as much, just as many, excuse me, people coming into New York as leaving New York. Maybe more. I mean, I don't count them, but I don't see a migration pattern away from New York City. Who's coming to New York right now among your clientele? Okay. Again, anecdotal, but. Yeah, no. So we've seen a really, something happened in the last few years, which two things happened, which I sort of saw coming. One was the transfer of wealth from people over 70 years old to their adult children.

7:18Those children have done very nicely on their own, and then they've been given a lot of money. Any place from a$10 million trust fund all the way up. Those people often want to stay in New York City, and they have big buying power. So those people maybe used to move to the suburbs more, but now they realize that the life balance of not having to commute and having the wealth to have a beautiful home in New York and also outside of New York allows them to stay in New York City. Cost of private school doesn't keep them away, none of that stuff. So that's one group that I'm really seeing staying in New York.

7:51The other group that's a new group coming, and I sort of saw this happening, was people who brought their kids up in other places. And I don't just mean the suburbs. I mean other places like Minneapolis, San Francisco, Los Angeles, Chicago, their adult children then move to New York after college and stay here and put roots down here and have grandchildren for them here. And those people are buying second or third homes in New York City because they want to be near their kids and their grandkids. And I've sold a whole bunch of properties like that to people like that. Yeah.

8:26Carol Massar:I mean, that's fascinating. I mean, what do you make? Because just think about going back to COVID, right? Obviously, very tough time and people are saying, okay, that's it, New York, everybody's leaving New York. I mean, we see cycles, right? And people come back. We see cycles. Look, I worked through 9-11. I worked through the financial crisis and then the latest was COVID. And in many ways, 9-11 and COVID were the most similar because they were both sort of the crises of, do I want to live in a city close to lots of people that doesn't feel safe to me? And the truth is, is that I think after 9-11, we showed our city to be incredibly resilient.

9:03And after COVID, we also showed our city to be incredibly resilient. I remember for the first sort of year after COVID hit, you'd go to other places in the U.S. and people wouldn't wear their masks and they didn't observe all the social distancing. In New York City, everybody did. We all took care of each other. And I thought that was going to be a good sign. And I think, you know, people just love New York. Yeah, it's pretty amazing. You mentioned the three events that you worked. Those are like before and after moments, right? Right. It's like 9-11, great financial crisis, COVID. Those are moments in fashion points where everything changed repeatedly.

9:39And New York has not just survived, but thrived. One thing that's also happened in the last 15 years or so is the rise of the outer boroughs. And I'm curious what you're seeing from clientele who in the past may have said, oh we're only considering Manhattan are now you know looking at Cobble Hill, Brooklyn Heights those sorts of places. Well I guess Brooklyn Heights has always kind of been like that but now it's moving more toward other parts of Brooklyn. Right so all of Brooklyn basically has become hot so I don't even consider Brooklyn like a more affordable option anymore which is crazy maybe you get more space but you know definitely Brooklyn is hot and I really encourage people, and I don't sell in any other place besides Manhattan, a little bit of Brooklyn, but I do encourage people to go to places like Queens, Long Island City, even, you know, Jersey City, places like that, Hoboken.

10:32I actually think Riverdale is a great option, because these are places that are still semi-urban. You don't necessarily need a car, and you get so much more for your money. And I really do think that they are the wave of the future. I mean, in places like in New Jersey, in Riverdale, in Long Island City, you get a view of the water. Yeah. Jersey City and Hoboken right now are hot. They're hot. And they're charming. Yeah. They're great. I see why people want to live there.

10:58Carol Massar:Yeah. It's, listen, you're just outside New York City. I live in Jersey City. Oh, yeah. I've been there for a long time. Has it changed since you've been there? Oh, dramatically. We've been there a long time. And I mean, I remember when, you know, Target came in and it was like a celebration because there wasn't a lot of retail and stuff. It's actually really, really crowded right now. And it's a little crazy. So, okay. What about foreign buyers? Are they here? Have they gone? Feels like we haven't seen a ton in the last few years. So we don't have as many foreign buyers as we have. And that's because some of the Asian buyers have had trouble taking money out of, let's say, China.

11:36That's one thing. Obviously, we lost our Russian buyers a while ago. We still have buyers coming from South America, a lot. We have buyers coming from Singapore, from Taiwan, from Korea. And then we have some European buyers. You know, it doesn't fuel our market the way the, you know, the sort of quote unquote Russian and Asian billionaire buyers did for a while. But I actually think that's a lot healthier for our market. We have a lot of wealthy Americans buying now. And we have enough foreign buyers who do want to have places here. What have been the changes that you've seen under the Mamdani administration?

12:15We're only a few months in, but I was having this conversation with some friends earlier today. What do you see? So I don't see a big change. Number one, I'll just say that I think that our city is somewhat mayor proof for at least four years, perhaps close to eight. So, you know, we've had better mayors, we've had worse mayors, better for the economy, worse for the economy for safety, and we've survived and we've thrived. So, you know, time will tell what will happen with Mom Donnie. I think that, you know, certain policies have made people nervous, like the new pied-a-terre tax. That one was, until they sort of said what it was going to be, it made people really nervous because the unknown is always much worse than just knowing what it is, figuring out how to deal with it.

12:59So, you know, we did have, I would say, a little bit of a chill factor for a couple of months after it was clear that Hokel and Mamdani were going to push through this pied-a-terre tax. As soon as it was put into writing what it was going to be, which was about two weeks ago, the market turned back on again. And I think it's partially because people don't really understand what it is. And I personally, as a former lawyer and as somebody who was married to my first husband was a tax cert lawyer, which is the whole science, if you want to call it, of reduction of real property taxes. I think that the law is too complicated and it's never going to be able to be implemented or followed through and they will not collect any money.

13:44Lisa, we're going to have to leave it there. Lisa Lipman, she's a real estate agent with Brown Harris Stevens. You're watching and listening to Bloomberg Businessweek Daily.

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