New York Says More Houses for Everyone

Weekly Market Overview

Office space leasing slowed down dramatically in Q4, lending more to the argument that vacant commercial space should be converted to residential. That would be amazingly helpful to Mayor Adams' plan to create 500,000 new units in NYC over the next decade and he's got The Hoch on board with his plans as well (who wants 800,000). 55% of all home purchases in NYC were all cash deals in Q4 and price stabilization continues to be a massive challenge for our friends at the Federal Reserve. US CPI growth slowed to 6.5% YoY And FTX has just happened to have 'found' $5 Billion in lost investor money. Your eyes are not deceiving you, this newsletter is coming out weekly from now.

State of the State

This week, The Hoch (Governor Hochul), gave her State of the State Address, in which she laid out her priorities for the 2023 State Legislative Session. The Governor’s remarks covered a number of issues including:

• HOUSING: The Governor set a goal of building 800,000 new homes over the next decade. To meet that goal, she announced plans to establish housing production targets across the state, legalize existing basement apartments, remove the 12 FAR cap, amend State law to support office to residential conversions, along with a tax incentive for the inclusion of affordable housing in those conversions, support transit oriented development, and work with the Legislature on a new tax tool for housing production.

• PUBLIC SAFETY/QUALITY OF LIFE: The Governor committed one billion dollars to plans focused on supporting New Yorkers who face mental health challenges. Additionally, she proposed amending the State’s existing bail reform policies in ways that could help judges ensure that more defendants return to court for bail eligible cases.

• SUSTAINABILITY: The Governor endorsed several proposals, including a statewide cap-and-invest program along with plans to eliminate fossil fuel combustion in new construction and prohibit the replacement of fossil fuel equipment in buildings by 2035. The Governor also announced plans to adopt additional standards to improve building efficiency.

• PUBLIC TRANSIT: The Governor committed to advancing a comprehensive set of solutions to help put the MTA on sound financial footing and address its structural challenges. She also emphasized that the State will continue its progress toward implementing congestion pricing.

• SUPPORT FOR WORKING FAMILIES: The Governor announced multiple proposals to support hardworking New Yorkers. These include a proposal to index the minimum wage to inflation, financial support for public education inclusive of the expansion of pre-kindergarten and investment in CUNY and SUNY, and expanding access to childcare.

Source: REBNY

Market Snapshots

Manhattan Market Activity Snapshot

Manhattan Pricing Snapshot

Market Performance

Here are how some other asset classes performed this week as of this mornings opening bell. Nice to see some early year rallies after a brutal 2022.

Mortgage Rate Update

As we have seen the Fed try to hedge bets against inflation, they've noted that rate hikes will not be as frequent in 2023 as compared to 2022 but according to Chairman Powell they wish to remain 'flexible' with that dictate. As we've also seen mortgage demand decrease, expect banks to become a little more competitive to try to lock in business by lowering rates a tad.

Primary Mortgage Survey Week of 1/05/23

Real Estate News You Can Use

• Fed Governor Bowman Says More Rate Hikes Are Needed Bloomberg

• Powell Says Fed Decisions to Stabilize Price Might Be Unpopular CNBC

• Mortgage Demand Down 13% CNBC

• Mayor Adams Unveils Plan for 500,000 additional Housing Units Over Next Decade NY Post

• Consumers See Inflation and Spending Cooling in 2023 CNBC

• Commercial Leasing in NYC Dips in Q4 NY Post

• What Inflation? Rolls-Royce sets 2022 sales record Reuters

• J Pow said the Fed is not a "climate policy maker" Axios

• Jamie Dimon, America's Banker, says Consumer health is in good shape Reuters

The Deep Insight

Puppy of the Week

Meet Maverick! He does not have a stuff toy named Goose but he is taller than Tom Cruise. Maverick is just as loving as he his golden. His tail never stops wagging, his favorite toy is his giant carrot and his favorite activity is cuddling. Breathe in all that is Maverick.

Contact Me

Feel free to reach out to discuss more in-depth about your real estate goals, share your thoughts about my newsletter, or lobby me to have your dog featured as the dog of the week in my monthly newsletter. Looking forward to hearing from you!