Posted by Leonard Steinberg of URBAN COMPASS on October 24th, 2014

Speculation can be a powerful thing: as New Yorkers awaken this morning to the reality that the first local EBOLA case has been identified, many are wondering what or if they have been exposed in some way to this deadly disease? Did you walk The Highline Park and breath in the air of this infected doctor? Did he sneeze on you on the ‘L’ train? We know the facts about Ebola, how it requires substantive exposure to a highly infected symptomatic victim’s bodily fluids, that it is not airborne, yet speculative doubt is enough to invoke fear in many.

In the world of London real estate, the effects of speculation about new taxes on foreign owners and the owners of higher priced real estate are being felt. The markets across the pond have cooled notably and most blame the prospect of new taxes on this. The taxes have not been approved or implemented yet, but the speculation is enough to impact markets negatively.

In New York, chatter about additional taxes on real estate for non residents is applying a pause button on our markets for some buyers. The irrational behavior of people and governments can have a HUGE impact on markets well before they are an actuality. The mathematics of applying these new, additional real estate taxes is spoken about with little mention of the LOST revenues from decreased transactional activity. Its a version of incompetence and political pandering (not to mention recklessness!) that is truly astounding. Hopefully sanity prevails.

Maybe the negative results of speculation are enough to serve as a warning to those thinking about policy knowing the effects could be much, much worse once enacted?