Tips, Trends and Tales from a Pro
Viewing entries tagged
Manhattan condo's
No matter where we are in the cycle of real estate’s ups and downs, it’s appropriate to consider where we’ve been, evaluate where we are and think about where we are going. This year nearly every industry event I attended focused on the market’s upper end, a subject that has captured the most press recently. Last week’s Annual NYC Real Estate Showcase + Forum hosted by The Real Deal opened with the question “What’s Ahead For Luxury?”
Manhattan’s residential real estate market has always been fluid, but increasingly it is becoming more multi-layered and segmented, with different price points moving in different directions. In the light of Q1 2016 stats which show average residential prices exceeding the $2M mark for the first time, it’s instructive to take a close look at inventory numbers and pending sales to see how they break out according to co-op versus condo purchases by price. Two important caveats are noteworthy when reviewing 2016 sales figures: for one thing, these averages are skewed by closings at high end new developments such as 432 Park Avenue and 150 Charles Street; secondly while sales records are an important part of history, it’s contracts signed that more accurately reflect the market moment since the closings for most new developments can follow contracts signed by as many as two years ago.
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.
In 35 years, I’ve had my share of challenging transactions, but this one takes the most recent proverbial cake. I closed on the terraced penthouse in Carnegie Hill this summer, nearly two years after my first meeting with the estate’s executor. For the deal to happen, I needed to overcome at least three significant obstacles. First, the property’s interior had been reconfigured 35 years earlier by an abstract architect with distracting curved walls and pivoting room dividers and needed a total redo. Second the co-op board put up a series of roadblocks by questioning the legality of an upper level that had been annexed to the apartment by a former owner. The 17’x11’ addition with wet bar and bathroom sat directly beneath the building’s water tank and was accessed by a narrow spiral staircase in a corner of the Living Room. A 1992 House & Garden feature highlighted this “Tower Room,” a term I adopted in my marketing. Responsibility for the Penthouse’s wrap terraces was the third serious bane of a sale.
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.
Congratulations! You’ve signed a contract to purchase your next apartment, and you’re pretty confident the co-op board will approve your purchase. It’s not too soon to begin planning your actual move-out/move-in. Ranking high on life’s stress meter because it’s all about displacement and disruption, moving requires preparation, organization and perspective.
This new year will feel a little like Yogi Berra’s “déjà vu all over again.” Real estate headlines for 2015 will echo many of last year’s dominant themes with a few twists.
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.
November 24, 2013. The year 2013 is sure to go down in the annals of NYC real estateas a stellar time. What were some of the dominant trends? Let’s take a look.
(1) Housing stock shrinks further.An overriding and ongoing lack of inventory defines the 2013 market. All analytics point to the lowest level of supply in more than a decade. The shortage has heightened competition among buyers and driven up price levels. Demand has remained consistently strong and is expected to be sustained.
March 2, 2013. I’ve been penning this monthly Manhattan Market Watch column for nearly ten years and have a sizeable library of articles about New York’s residential real estate market and its trending issues and cycles. In July 2009 at what turned out to be the nadir of the market, I wrote about “The Buyer’s Advantage” and two Januarys later, I characterized 2011 as “The Year of the Buyer.” In sharp contrast, today’s real estate climate is putting many buyers at a disadvantage and favoring savvy sellers. The Year of the Smart Seller is now.
The Art of Ethical Negotiation, part of a series of master classes in the NYRS program, takes place in the wood paneled boardroom at the Real Estate Board of New York. It’s an intimate venue that allows 30+ participants to engage in a lively discourse about bargaining and winning. It’s less about revealing real estate war stories and more about successful professionals discussing best strategies. For the past several years, it’s been led by Warburg’s President Frederick Peters and his life long friend, veteran investment banker Alec Haverstick, a principal at Bessemer Trust. Following is my take-away on guidelines for conducting a successful negotiation.
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.
”There is a difference between working hard and working smart,” says Eileen Spinola, REBNY Senior Vice President of Brokerage Services and Education. “Those who are successful in our industry do both. The caliber of broker graduates from our new NYRS Designation Course confirms that advanced education is indeed working smart. But the NYRS course,” she continues, “is not for the casual student. It is demanding not only of a broker’s time, but the curriculum is rigorous, mentally challenging, and there’s a required final project.“
Week Three of the NYRS course for top residential brokers covers Professional Ethics, a critical issue and compelling area of study, especially in the light of increasing lapses in moral behavior by individuals in every arena, from corporations to politics to religion. As brokers, we make decisions and take actions daily that affect the interests of others. How we go about our business greatly impacts the results we achieve.
All’s not quite right with the world. As the credit squeeze deepens, financial insiders tell us that there is more bad news to come with more write downs at banks before things get better. The work out period, they acknowledge, will be longer than previously expected or hoped for. What began as a subprime U.S. real estate debacle turned quickly into a complex tangle of interconnected crises at financial institutions around the world.
