Since New York State Comptroller Thomas DiNapoli graciously accommodated our Tuesday Three Cents Worth release date with his report on Wall Street Bonuses, I thought I'd try to come up with a chart that somehow correlates Wall Street cash bonus payments and the Manhattan housing market. Prices don't correlate well with any form of Wall Street bonus data and employment trends seem to be too macro to equate with annual housing price trends.
I'm always reluctant to trend bonus data since Wall Street employment is only about 5 percent of NYC total employment (and 23 percent of wages). There are lots of other trends going on: credit, mortgage rates, weakness of the dollar, international demand, etc.
I ended up comparing total Wall Street bonuses (billions) with Manhattan number of sales (thousands) on a year-over-year percent change basis. I'm still not all in about the reliability of the correlation, but hey, this is Curbed and it's still interesting. The takeaway for me was the following:
· In every period of rising bonuses since 1986, there seemed to be a modest uptick in sales.
· During the gravy days of heightened bonuses in '04-'07 the new development contract surge in '04-'06 resulted in a closing sales spike in 2007.
· The uptick in sales and and an uptick in bonus are in sync (still small) for the first time since 1999.
Still, Wall Street's contribution to the long term health of the Manhattan housing market is probably more important as measured by its share of tax revenue to NYC on corporate profits, NOT bonuses to employees.
· Matrix [matrix.millersamuel.com]
· Three Cents Worth archive [Curbed]