Wall Street bonuses won’t save the luxury market, experts say

New York /
Jan.January 12, 2010 03:31 PM

The return of Wall Street year-end bonuses at the end of 2009 isn’t likely to have as much of an effect on the luxury real estate market this year as their disappearance did in 2008, many industry experts say. While incentive pay likely rose 40 percent for last year, according to compensation research firm Johnson Associates, many of the financiers reaping the rewards are still uncertain about the market and more cautious about investing in second and third homes than they would have been two or three years ago. Furthermore, the incentive pay raises are expected to go largely to higher-ups, rather than get spread out amongst mid-level employees who have, in the past, directed their year-end checks toward down payments on new vacation homes. “Maybe the total bonus pool will be larger, but that doesn’t mean that middle management will make out as well as we think they will,” said Jonathan Miller, head of New York City appraisal firm Miller Samuel. “That softens the impact of bonuses on real estate.” Wall Street bonuses, he added, are “not the savior of the luxury market” and are unlikely to have much of an effect beyond Manhattan and its wealthy suburbs. [Forbes]


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