Why It's a GREAT Time to Buy NYC Real Estate... | Ryan Serhant

0:00 Does it make any sense to buy an investment property in New York City right now?

0:03 Yeah, for sure.

0:05 Well, right now for sure there's fear in the marketplace.

0:07 You use it to your advantage.

0:09 Buy great property.

0:10 The best deals that have been done

0:12 in New York City when buying an investment property.

0:15 And it's sad to say in the last 25 years were the fall of 911, right?

0:23 the fall of 2008, the fall of Hurricane Sandy when

0:29 a lot of New York City was underwater and the majority

0:33 of 2020 because even New Yorkers were saying that New

0:36 York is over and every single time the market has

0:39 come back stronger and every single time the people that were

0:43 courageous enough to go in and invest in what is

0:46 they were buying Manhattan an island of rock uh during

0:50 those times took advantage of fear like when COVID hit, Right.

0:53 We were starting our company.

0:54 I made that decision in 2019

0:56 and then I couldn't I was too like my train was moving too fast.

0:58 I couldn't I couldn't stop.

0:59 So I was like I guess we'll just do this.

1:00 We just took us a couple extra months to to launch.

1:03 Um I sold a an apartment on 57th Street in Billionaires Row.

1:08 The guy was in it for I think $32 million.

1:10 We sold it for 17.

1:13 But the buyer in May of 2020, there were bodies in Central Park.

1:19 The Red Cross ship hadn't gotten there yet.

1:22 Cuomo killing senior citizens all day long, right?

1:26 Like it was a dark time and 17 million in that time was insane.

1:33 He was an idiot.

1:35 Except he wasn't.

1:36 He was the opposite.

1:37 And he bought and it's now probably it's like worth $35 million today, right?

1:42 Same thing.

1:42 We sold a penthouse in Soho uh that fall.

1:45 It had been asking $40 million.

1:47 We got it for 22.5.

1:49 And that was a ton of money.

1:52 Big discount, but discount to precoid pricing,

1:55 which every seller knew was over and done with.

1:57 That apartment today is $50 million even under the current political climate.

2:01 So like there's you I think you always negotiate with fear

2:05 as a fundamental in good markets and in bad markets.

2:09 And I think anyone who's smart and who has cash today

2:13 is looking at a market like New York City and saying,

2:14 "Where can I get a great deal?"

2:16 Jason Oen was saying the exact same thing with Los Angeles.

2:19 It's like if you can put up with the headache and make real

2:22 estate more active in in terms of like active income than it usually is,

2:27 you just got to grind away at it.

2:28 Then there is a lot of opportunity cuz people are just scared.

2:31 They don't want to deal with the stuff that Grant's dealing with.

2:33 That's very true.

2:34 Santa Monica, it's crazy.

2:36 Is selling for 2014 prices for multif family.

2:39 It's crazy.

2:39 In more than 10 years, it's not gone up a dollar.

2:42 Selling for less.

2:43 Crazy.

2:43 So imagine owning real estate 11 years and taking a loss on it.

2:47 But nobody wants to do it.

2:48 But it could be a good time.

2:49 Yeah.

2:50 Listen, you always just have to make the right

2:52 decision based on what makes sense for you.

2:54 If you're buying to fix and flip, you're not holding it for 11 years, right?

2:56 If you're buying to actually live in it and you're

2:59 going to break even and you just had your carry costs,

3:02 like you have to live somewhere anyway.

3:04 And rents are are incred.

3:06 There's parts of New York City now in a way that I've never

3:08 seen before where it is more expensive to rent than it is to own.

3:10 And just hasn't been that way for for a long long time.

3:13 So, as long as rates come down and as long

3:15 as there's some sort of government intervention on on on, you know,

3:19 kind of um on taxes in some way, shape or form for real estate,

3:23 I think you could see a really really big boom.

3:25 How do you think Zoron Mani's policies are going to affect prices in New York?

3:30 Uh it remains to be seen.

3:31 Listen, worst case scenario is New York City goes on a hold.

3:35 CO was six years ago, right?

3:38 Like it was a long time ago now, even though it doesn't feel that way.

3:41 And so New York City could go on pause.

3:43 Right?

3:43 Which just means that not a whole lot changes.

3:45 Prices don't go up.

3:46 Prices don't really go down.

3:48 There are always panic sellers.

3:50 Like there's during tariffs.

3:52 When Trump announced tariffs for the first time earlier this year,

3:55 the stock market fell, right?

3:56 It was a disaster that whole weekend.

3:58 He's playing golf.

3:58 Everyone's panicking.

3:59 We had sellers agree to deals in New

4:02 York City that were just purely based on panic.

4:06 10% lower than what they could got, what they could have sold for 22 days later.

4:11 O, but sellers just panic, right?

4:14 Like fear fuels markets.

4:17 So if you just stay calm and you just breathe,

4:20 New York City has gotten through terrorist attacks,

4:24 global recessions, global pandemics, climate change, or this, that, the other.

4:30 Way worse than a 33-year-old Tik Tok mayor.

4:34 So like the worst that can happen is it slows down.

4:38 Um, uh, I think what probably happens is you have a big pause on development,

4:43 which means that anything under construction now,

4:45 anything new, anything luxury today just gets more valuable

4:49 because it goes right back to supply and demand.

4:52 What draws prices down, which is what he should do, is incentivize building,

4:57 reszoning, create more housing, make a ton of it more affordable.

5:01 The more housing you have coming to the market,

5:03 the more pressure you're going to have on pricing and then the more you're

5:06 going to have to incentivize everybody else to lower prices, do this, do that.

5:09 Like Giuliani post 911 created a 421A and 421G tax abatement in New York City.

5:16 And everyone was up in arms.

5:18 And all it did is said if you are willing to develop real

5:21 estate in New York City so that people will live here and feel safe,

5:24 you can defer all real estate taxes for 10

5:28 to 25 years depending on the asset, right?

5:31 Depending on if you're going to build some public infrastructure,

5:33 if it's a conversion building, this that the other.

5:36 And it boommed New York because there was incentive to come back.

5:39 It created new housing.

5:40 New York City bounced back post the greatest

5:42 terrorist attack on US soil in history, right?

5:45 Um, so if he creates incentives instead of taking away the opportunity to build,

5:51 I think pricing could go through the roof.

5:53 But if he just holds firm and pushes on a lot of his other policies,

5:57 then New York City will probably just stay on pause for a second.

6:00 Great real estate will still sell.

6:01 Other real estate will just sit tight

6:03 and everyone will just wait out what happens.

6:05 Does that also apply to freeze the rent?

6:07 Yeah, he's talking about rent freeze in in rent

6:09 rent stabilized and and rent rent control departments.

6:12 I mean, all all that does, and I get it.

6:14 Like, I understand why he won.

6:17 I totally understand.

6:18 It is unbelievably unaffordable.

6:22 Not just for the home.

6:23 Like, I mean, there are 350,000 people in in New York City that are homeless.

6:28 Like, I wear one of these bracelets on my wrist.

6:30 Every dollar we sell from this one goes

6:31 to the Coalition for the Homeless in New York City.

6:33 Um, and I push that as much as possible.

6:36 Um uh uh rent is high, food is too high,

6:42 regular necessities are all too high, health care is too high.

6:46 Even with Obamacare or how you use it, right?

6:49 So I get it.

6:50 Like if you're angry and someone comes out and says,

6:52 "I know why you're angry and I'm going to fix it.

6:55 That guy, you vote for that guy." Whether you know how

6:59 he's going to do that or not, it doesn't matter.

7:01 It's just someone who's aligning with your anger.

7:04 Like I totally totally totally get it.

7:06 Mirroring anger is probably the greatest way to the office ever.

7:10 We saw Trump do it on the same side.

7:11 Manny is the left's version of Trump, right?

7:15 It just took the hard left position and a lot of people said,

7:19 "Yeah, but if you talk to people right now as to great, awesome.

7:22 How do how is this going to happen?" No one has

7:24 any idea and nor do they nor do they really really care.

7:27 Um uh but I think if he focuses on creating instead of taking,

7:31 we could have a a great great city.

7:32 And I w I hope he does, man.

7:34 Like there's only one New York.

7:36 Yeah.

7:36 How would a rent freeze in New York City affect the prices?

7:38 I don't know because it's I don't think it's possible.

7:41 So like there's I don't think there's a a real case study um in the US anyway.

7:46 Definitely in New York.

7:47 What a rent freeze will do is disincentivize

7:50 anyone who actually owns set apartments to fix them.

7:54 And so you go back to like New York City of the 60s

7:56 and 70s where you have these derelic

7:58 buildings with apartments that are falling apart,

8:02 hallways that are crap, light bulbs that are out, trash that's not picked up,

8:07 and that then affects the sidewalk, which then affects the next building.

8:10 That then affects the next building.

8:11 And then developers come and say, "Well, I can't build on this block.

8:14 These buildings are all disaster." That then affects the next building.

8:16 And then these buildings go underwater because the rents are frozen.

8:20 But you're not freezing interest rates.

8:23 You freeze rent, that's fine, but you're not freezing the rates.

8:26 You're not freezing markets.

8:28 You're not freezing time.

8:30 And so, who's going to fix all these apartments with what money?

8:34 Like, what with what profit?

8:36 You're not You're just not going to do it.

8:37 And that's what happens.

8:38 You know what I never understood is why rent control

8:40 still applies to people who make several hundred,000 a year.

8:44 I thought it would be a great principle,

8:46 at least better than the current system,

8:48 is if you're making above a certain amount, you're not rent controlled.

8:51 Mhm.

8:51 Because otherwise you have people that are

8:53 making 200,000 a year that just happen

8:55 to be in a rent control spot because they happen to sign a lease in 2010.

8:59 Yeah.

8:59 It's hard to get tenants out of apartments who are making more money.

9:02 It does happen.

9:04 Rent control was not set up for people who can afford free market apartments.

9:09 It is what it is.

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