Gregory J. Heym
Executive Vice President, Chief Economist
Real estate economist juggles the numbers
For those of us who took statistics to get rid of our math requirement in college, the idea of comprehending today’s real estate market seems about as likely as Donald Trump changing his hairstyle. That’s why Greg Heym, chief economist to Halstead Property, is here to look at market research and make sense of all that messy math business, telling brokers exactly what they need to know about the market so that they can pass it on to you, the buyer.
Heym’s not-so-secret knowledge? The numbers can tell you a lot, but no one can predict the future.
Heym points out that real estate facts often get misinterpreted, leading to misconceptions about New York’s real estate climate. “A lot of people have been predicting doom and gloom for a while,” Heym says, but that’s a misconception. Rather than thinking we’re in a buyer’s market, Heym describes the current real estate market as being stronger than it was last year.
“We see the average sale price is down 4 percent from a year ago, but it doesn’t necessarily mean that the entire market is down,” he says, “because we also notice that the average apartment is also smaller than it was a year ago.” And those smaller apartments aren’t actually selling for a lower price per square foot — and if you look at it that way, prices are up.
So basic figures such as the average sale price aren’t too useful. “By itself it can’t necessarily tell you what’s going on right now.”
Past and future
Heym hears gripes about the constant development in New York, but doesn’t think it’s much of a problem. “Development has clearly picked up in the last couple years,” he says, but that too can be put in perspective. “It’s nowhere near where it was in the ’80s, where we saw tens of thousands of units being converted every year when the economy and the market was slowing.”
And for those of us who won’t be buying any real estate for quite some time, Heym says the climate is almost impossible to predict beyond a few years. “People like certainty,” he says. “They always want to feel like they have a grasp of what’s happening, but in times like these, you just don’t have as much of a grasp as you’d like.”
So not even the experts can tell you what the market will do — might as well break out the crystal ball.
How do politics affect the real estate market? “Some things more than others, like 9/11. The fact that North Korea is developing nuclear weapons is not necessarily going to affect whether someone buys or sells an apartment in Manhattan, but from a political standpoint, who is in office will have a great impact on the economy. ...[but] I don’t think you can blame or credit the White House every time the economy goes boom or bust.”
Wednesday, October 11, 2006