Compass CEO on NYC Real Estate Impact of Mamdani's Win & Affordability Crisis

Impact of Zohran Mamdani's Primary Win

• 📌 Robert Reffkin, Compass CEO, states that Mamdani's primary win has caused more buyers to pause their homebuying than any other event in his 13 years in NYC real estate.
• ⚠️ Buyers with existing contracts are asking lawyers to wait and see how the political situation unfolds before proceeding.
• 💡 Conversely, this pause presents an opportunity for buyers who are considering purchasing a home in New York City.

Political Realities vs. Campaign Promises

• 🎯 Reffkin notes that Mamdani campaigned on promises, such as free bus fares, that are not within the city's direct control (belonging to the MTA).
• 📊 He points out that less than 10% of New Yorkers voted for Mamdani, suggesting there's a long way to go before the general election, referencing Eric Adams' previous vote count.
• 📉 The market's reaction, with people potentially leaving the city, may discipline politicians and force them to change their perspectives.

New York City's Affordability Crisis

• 🏠 Affordability is a key issue across all Compass markets, including New York.
• 📈 While inventory is at a 6-year high and prices are flat year-over-year, affordability remains a significant problem, especially for younger New Yorkers facing rising rents.
• 🚫 The elimination of brokerage fees has led to an increase in commissions (around 15% more), with landlords now paying, which indirectly impacts renters.

Solutions and Market Dynamics

• 🏗️ Reffkin emphasizes the need for more inventory and better mortgage rates to address affordability.
• ✈️ He has seen direct text messages from individuals making decisions to move out of the city (e.g., to Miami) based on the election outcome.
• 🏙️ Despite concerns and people already leaving, Reffkin expresses full commitment to New York, believing the city will always bounce back, citing its resilience in the 1970s.

Zillow vs. Brokerage Firms

• ⚖️ Compass sued Zillow over its listing ban, which prevents homeowners and agents from marketing properties on Zillow.
• 💰 Reffkin estimates that buyers spend over $3 billion more in commissions annually by using Zillow, as their user information is sold to the highest bidder, compared to going directly to brokerage sites.