Toni's February 2024 Newsletter

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The "January Effect"

Dear Friends and Family,

Strange as it sounds, February is the perfect time to talk about the "January effect". Have you heard of this phenomenon?

This age-old market theory whispers promises of consistent January gains, fueled by holiday bonuses and refreshed investment resolutions.  Is this just market lore, or does it hold water?

Is there a January effect for real estate? And, more importantly, should you care?

On the Up & Up! First noticed in 1942 by banker Sidney Wachtel, the January effect suggests that stocks consistently rise in the first month of a new year. Initially, the effect was thought to be caused primarily by tax planning strategies - selling underperforming stocks in December to lock in a tax loss, then using the freed-up capital to buy more in the new year, causing a January bump in activity and prices.

So is it Real? And Does it Apply to RE?
Recent stock market data paints a pretty clear picture: Since 1993, there have been 17 winning January months and 13 losing months for the S&P 500. Since 2009, the favorability erodes further, to a 50-50 split. The data for Manhattan contracts is similarly mixed: Over the last 5 Januarys, 2 have had more contracts signed than the preceding December and 3 have had fewer contracts.
So much for the January effect!

Jan '24 National Report

Jan '24 Manhattan Report

Yet the Myth Persists!  Why, despite the actual data, do reports of the January effect continue to pop up?  The bottom line is that easy answers make good headlines. "The January Effect" is a snappy hook (I used it for this newsletter!), but three words can't truely capture the overall month-to-month performance of any market, let alone the nuances of a real estate market like NYC. Similarly, media coverage of rent vs. buy, penthouse creep, and buyer's remorse, tends to go for flash over substance.

Take the Long View. Fixating on a specific month or faddish trend diverts attention from the bigger picture: Your planning and goals. Real estate opportunities abound throughout the year and the perfect home might become available at an unexpected time (and it might not even be on the market!). If you focus on the latest splashy headlines, you'll find yourself  running circles to keep up.

What to do? A savvy advisor (whether in finance, real estate, health, etc.) considers your individual situation, above the short term hype. In the real estate market, it often can be difficult to judge what is fair, honest, and true when faced with so many flashy headlines and seemingly conflicting views. But it doesn't have to be that way. Let me and my team be your filter to help you find what's best for you.

We will help you or a loved one make informed decisions that consider the intrinsic value of each property, its potential for appreciation, and how it fits within your overall diversification plan.

While the "January effect" might make for intriguing headlines, it's crucial to remember that real estate decisions deserve a deeper dive. 

All the best,

Toni Haber
Licensed Associate Real Estate Broker
Founder, Toni Haber Team  |  Private Client Advisors
TONI@compass.com  |  917.543.1999

Market Minute

The Luxury Division’s 2023 Ultra-Luxury Report is NOW LIVE! This publication showcases data on all $10M+ transactions over the last four years, inclusive of all brokerages, with the aim of further solidifying COMPASS as a luxury market expert. 

Check out our press coverage in Mansion Global: More Than 1,500 Homes in the U.S. Sold for $10 Million and up in 2023. 

2023 Ultra-Luxury Report

Ask About the Market

The Art of the Penthouse

In case you missed it, check out our report for the entire year and Q4 2023 at theartofthepenthouse.com

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Toni Haber

Licensed Associate Real Estate Broker
917.543.1999
toni@compass.com

Office: 212-913-9058

Compass is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. All Coming Soon listings in NYC are simultaneously syndicated to the REBNY RLS. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.