Much has been made in the press of late of the shifting New York real estate market. Although buyer’s decidedly have the edge today, all is not lost for sellers. If you are in the fortuitous position of trading up to a larger property, while you may not do as well as you would hope for on the sale, you will more than likely make up for that deficiency on the buy. In this current climate, two important strategies can boost sales: pricing realistically and doing your best to convert that first offer into a sale.
Is it legal for an attorney to send out multiple contracts on the same property simultaneously? The answer is yes. Is it ethical? The answer depends on whether there’s full disclosure. In the same vein, is it lawful and ethical for an agent to represent more than one buyer in negotiations on the same property? Both queries are thorny and merit serious consideration.
The more things change, the more they remain the same. Ten years ago, I concluded in a column, “Some sellers get no respect.” Homeowners who set unrealistic values on their homes—who fail to heed conservative pricing advice from experienced agents—lose valuable time and ultimately money. That message is worth repeating, particularly in today’s climate where price drops abound and where activity has slowed.
Three years ago, several weeks into the start of 2013, I reflected on the Wall Street adage “As January goes, so goes the year.” At the time, impressive financial gains were scored with both the S&P 500 and the Dow which were up in the month of January 2013 by 5.05% and 5.77% respectively, signaling the best start to the year since 1987. In residential Manhattan real estate, January 2013 witnessed a jump of nearly 28% in signed contracts over January 2012 (2,888 vs. 2,265). Sofia Song, at the time StreetEasy’s Head of Research, called it “The Year of the Frustrated Buyer.” I termed it “The Year of the Smart Seller.”
With the exception of well priced apartments under $2M which continue to attract multiple competitive bids and top sales dollars, price increases of Manhattan homes have abated. Sellers have relinquished their upper hand as buyers find more balanced footing in a market that seems to be heading back slowly to equilibrium. Throughout this year, new development options have come to market steadily yielding more than two and a half times as many choices for buyers than in 2014: approximately 6,500 units in 100 new buildings compared to roughly 2,500 units in 59 buildings last year. At the ultra high end, sales are stalled. In 2015, Manhattan’s residential real estate market shifted in more ways than one.
The allure of a penthouse or for that matter any apartment with a setback terrace is irresistible. A precious and highly coveted commodity, terrace ownership connotes a certain quality of life with bragging rights. To the urban dweller, outdoor space offers oases of air, light, sky and ultimately status. Outdoor space sells at a premium in New York City, and for the purchaser, caveat emptor reigns supreme. It’s critical for a buyer to understand the governing Proprietary Lease and House Rules which will vary from building to building and also to consult with an attorney regarding local ordinances and building codes as they relate to what can and cannot be done, placed or built on a terrace.
I’m at the midpoint of my current co-op renovation, a total gut of a two bedroom apartment, and this is my 6th undertaking to date, not including my Westchester home which was a builder’s spec house that I finished. I’ve renovated the one bedroom units for my two children, altered our first family postwar on East 79th Street, then our seven room prewar on Central Park West, and 5 years ago I gutted a one bedroom pied a terre. Renovating a Manhattan co-op presents unique challenges and requires careful planning.
In the current market, do you sell first? Buy first? Or sell and buy at the same time? A lot depends on your financial situation and stamina for risk, disruption and chance.
If you sell first, as conservative traditionalists recommend, you’ll know precisely how much additional money you’ll have to spend, but it may take some time before you’re able to identify a suitable next home, so you may have to rent or move in with family in the interim. Don’t expect to be able to make your sale contingent on finding suitable housing.
Standards for measuring NYC apartments would be a boon to the industry. It’s a subject I’ve broached before, and one that merits re-consideration. Without uniform guidelines, the challenge of computing accurate square footage in order to compare properties persists for agents and consumers alike. While price per square foot is only one of many factors that contribute to a property’s value, square footage has become the common denominator, if not the virtual currency in which real estate properties trade. And yet, because standards are not in place, calculating square footage remains inexact.
It’s not smart for buyers to be unrepresented in today’s marketplace. The inventory is too thin, and the stakes are too high. In a climate where well priced properties are attracting multiple offers and selling quickly, it’s important for both sides of the transaction to be represented separately by experienced agents. Dual agency, though recognized by NY State, is problematic. Experienced brokers widely acknowledge that when each side has its own representation, the likelihood is greater that the deal will proceed more smoothly and with fewer hiccups to a successful close. There are compelling reasons for buyers to collaborate with a professional agent.
September 9, 2013. The fundamentals of Manhattan’s residential marketplace that have characterized most of 2013 are expected to continue into the fourth quarter with some notable variations. Demand will remain strong; inventory will improve somewhat; prices will hold steady; interest rates are trending higher however.
Combining apartments to create larger residential spaces is not a new concept, but it’s also not an everyday occurrence. Despite Mayor Bloomberg’s advancement of affordable pint sized micro units, the demand for large properties continues as does the practice of putting together multiple units. Even developers of new condo products are going back to their drawing boards to combine apartments to capture higher price yields per square foot. Given the current shortage of sizeable properties, one wonders whether we will be seeing more combinations.
Is there an optimum time to list a property? Yes and no. Spring is the season of perennial promise when inventory, demand and activity peak. But buying and selling occur year round, and while the seasonal calendar affects the volume and velocity of sales, there are two more important considerations than the time of year a property comes to market—namely the life stages of buyers and sellers defined by marriage, birth, death, and employment and the life cycle of a listing which is shaped by pricing and condition.
We’re at an interesting moment of time in the current residential marketplace. On the one hand, an already thinning inventory of apartments has been shrinking steadily since the second quarter of this year. According to analytics provided by Noah Rosenblatt’s www.urbandigs.com, as of this writing, a total of 5,659 apartments are on the market in Manhattan—the lowest number in more than four years. At the same time, there are 3,012 pending sales—just 189 deals short of the highest number of signed contracts achieved during this same period on June 14th of this year. Properties in all price ranges are being absorbed at a faster rate than new properties are coming to market. With supply dwindling and demand rising, sellers who price realistically have the edge today.
March 5, 2012. What’s a buyer and seller to think when on March 1 we read on wsj.com about a “weakness in sales” and a deepening real estate slowdown during the first two months of this year, and then on March 2nd urbandigs.com highlights the highest deal volume since 2008 in February? Shut the front door, we say, as we proclaim that February was an especially strong month. We expect the first quarter of 2012 to finish on an uptick, signaling continued stability as we enter the spring market.
The Real Estate Board of New York is bringing critical attention to an issue of great complexity. Their recently released seven minute video, appearing on www.rebny.com and titled “Property Tax Fairness—No Margin for Delay” focuses on New York City’s rising real property taxes. The subject is as convoluted as it is complicated, and as political as it is inequitable. It’s tough to even speculate how solutions will be tendered to a problem of such complex proportions.
In mid July, Fred Peters posted a blog about the complexities inherent in a broker’s job “as well as the multiple pleasures.” He mused, “Our business involves strategizing . . . relationship management . . . aesthetics . . . negotiating skill, and it often involves being a strong hand within the softest velvet glove,” concluding, “There is no other work quite like it.”
On December 24th as 2010 was drawing to a close, a front page New York Times headline reported “Experts Citing Rising Hopes for Economy.” Heralding a “new optimism” and quoting forecasters and policy makers who were revising earlier predictions, the Times journalist declared that our recovery “will gain substantial momentum in 2011.”
The key word above is “substantial” and to that we add the Yiddish word “halevai.” Pronounced phonetically in three syllables, sometimes dropping the initial “H,” ha-le-vai is a wonderfully expressive sentiment. From the Hebrew meaning “would that,” it has come to mean “it should only be so.”
We're poised in these last months of 2010 to finish the year with an improved 4th quarter. After a tumultuous 2009, our market rose slightly and hesitantly as 2010 began, picking up unexpected steam steadily through April, May and June, but then slowing and falling flat through much of the summer. Following on the heels of Labor Day, market activity resumed, and the mood is upbeat again. As of this writing on a crisp October 3rd morning, the possibilities loom that the spring momentum can be repeated in the next eight weeks before Thanksgiving.
Renovating an apartment in Manhattan presents a set of unique challenges. I’ve written on the subject before, and with the perspective of my recent 6th renovation behind me, I offer some advice to the uninitiated.
First Do Your Homework
Talk to as many people as you can who have been through the process. Get recommendations, ask questions and take notes. Interview your primary professionals carefully, visit their past projects, and check references. When evaluating bids, take into account reputation and experience as much as you consider price. Determine whether projects were finished on schedule. When checking references, ask how each trade handled problems that surfaced during and especially after the job. The lowest bidder may not be the wisest choice.
