The Return of The Banker Buyer?

18 West 75th Street – Fully renovated Townhouse
Bankers have been (often unfairly) beaten up since the Great Recession. Under the watchful eye of all, many salaries and bonuses dropped noticeably and many jobs were lost, not to mention the sharp de-valuation of most banker stocks. Bank regulation multiplied in a concerted effort to prevent a repetition of the horrors of the last recession. Many in the real estate industry mourned the demise of the banker buyer (although they certainly did not disappear), but now I think its fair to say: Bankers are Back!
In the last three months alone, bank stocks have soared. Goldman Sachs is up around 44%, J.P, Morgan Chase 29%, Bank of America 45%, Wells Fargo 20%, Citibank 28%, First Republic 17% and Bank of New York Mellon about 19%. The combination of rising interest rates with the Trump Administration promise of simplified and reduced regulation is probably the root cause of this massive valuation incline. This 3-month wealth inflation for bankers alone is certain to fuel confidence in this buyer demographic……now add in the prospect of lowered corporate and personal taxes and massive infrastructure spending and the picture becomes even rosier. Additionally, the effects of BREXIT has had some banks re-evaluate London as the Global Center for banking and turn their eyes towards New York.
Major banking centers such as New York, Boston, Miami, San Francisco and Los Angeles where there is a larger concentration of bankers, are almost certain to include real estate beneficiaries. It’s even possible that bankers who turned to real estate as an alternate career may return to banking with these strong prospects. While bankers have certainly not suffered over the past few years, and they have always been a strong buyer demographic, I think this adrenaline shot of confidence is bound to impact the luxury real estate markets over the next few years quite considerably.