Filed under: Company News | February 16, 2015

Manhattan condos

Zillow calculated the average rents in the nation’s biggest metropolitan markets for 2014, and the NYC area doesn’t even rank in the highest five (pretty not bad for the country’s most livable city).  As has been reported previously, California rents topped the list, occupying four out of the top five spots.  Curiously, San Francisco’s average ($1,598), which in previous months had beat out New York’s ($1,228), was actually the second highest — the region with the highest rents was actually San Jose, which was calculated to have an average monthly rent of $1,807.

It’s worth noting that this analysis folds New York City into “New York-Northern New Jersey”, which is made up of markets arguably different enough to warrant individual distinction — intra-borough gradients can be significant (e.g. Brooklyn), let alone interborough or intercity differences.  Manhattan’s luxury rental market naturally comes with high profile transactions; the Pierre Hotel for instance attracted an international tenant who signed a month-long, $500,000 lease in December for the 39th floor, and a $150,000/month suite on the 10th floor.

That said, New Jersey’s northern metropolitan region includes Jersey City and Hoboken, which especially on their New York City waterfronts, have been enjoying continued economic growth marked by significant spates of new construction — introducing much needed retail and commercial space — so much so that a proposed PATH train service cut was met with outcry.  The proposed cut would eliminate night service, and allegedly save $10 million a year; however, proximity and accessibility to Manhattan are cited as main points in the area’s attractiveness (commute times are comparable to living in outer boroughs); Jersey City’s Exchange Place, one stop away from FiDi, has been referred to as Wall Street West.  The change would also put a recently approved Hoboken rail yard redevelopment (in the same vein as Hudson Yards, albeit on a likely smaller scale) in jeopardy.

Filed under: Company News | February 11, 2015

Skyline

2014 has been a record year for the real estate market seeing record sales exceeding the pre-economic crisis boom. Heading into 2015, real estate experts have offered their opinion on how they think the market will shape up in the coming year.

2013 was a year of wildly exciting sales in the industry, and 2014 didn’t miss a beat from the success of the prior year. The pace showed signs of stabilizing even with prices reaching new levels.

2014 saw a rise in mega-developments in Hudson Yards to South Street Seaport and Astoria Cove. The luxury towers that have come to be known as billionaire’s row are being finished by developer’s, including One 57th Street, 432 Park Avenue, and 834 Fifth Avenue.

2015 is primed to see double the amount of new development launches as compared to 2014. According to the Corcoran Sunshine there will be 6,287 condos set to launch compared with the 3,112 in 2014. Demand for one-bedroom and two-bedrooms are in very high demand.

Concerns have been made about the abundance of inventory at the top of the luxury market, but industry experts have said that its still a bull market, with deep interest from foreign buyers looking for homes particularly in New York City.

According to Rick Davidson, President and CEO of Century 21 Real Estate, The National Association of Realtors and Fannie Mae are predicting double digit increases in transaction volume in both number of homes sold and prices.

Segments predicted to play a big role a boost business in the coming year are the first-time homeowners, move up/move down sellers, investment, and of course luxury. Home owning numbers are far below numbers, historically a demand in first time homeowners is expected. The single homeowners are expected to contribute a great deal in 2015. A Century 21 survey shows that 32 percent of sales in 2013 were made by single homeowners.

Interest rates are at a record low, and economists are predicting an interest rate increase in 2015. Federal Reserve Chairwoman , Janet Yellen, hasn’t indicated when an increase could happen, but experts figure it will be sometime in mid-June. This prediction means the next six months will be busy, with people realizing the record low rates and uncertainty about the period after June. The interest rate will more likely affect first time homebuyers as opposed to the luxury market where many foreign buyers pay in cash or make heavy cash deposits. Wealthy buyers from China, India, and Brazil are looking to get their money out of their countries and diversify their assets in the global picture.

2015 might see changes in affordable housing. Mayor de Blasio has won a few battles in 2014 in Brooklyn’s Domino development and Astoria Cove’sincreases in affordable housing as he tries to succeed in his plan to create or preserve 200,000 affordable housing in the next decade.

Condo inventory growth is predicted in Brooklyn and Queens, which saw 8.6 percent and 8.5 percent inventory growth in 2014 respectively.

With so many segments to watch in 2015, the real estate market is set for a promising year with many more units set to launch and record low interest rates.

Filed under: Company News | January 4, 2011

Just because most real estate prognosticators predicted the NYC rental market’s strong fourth-quarter showing doesn’t mean that things went quite as expected. At some level, yes, the market for Manhattan rental apartments tightened in the fourth quarter, with the vacancy rate dropping again and rents reaching their highest mark in 2010. But while the ongoing rally in the NYC rental market didn’t exactly sneak up on anyone, there’s a surprise buried in the fourth quarter stats that’s even more dramatic than the (admittedly lovely and colorful) charts above would indicate.

“The average Manhattan rent in the fourth quarter continued to rebound from the trough early last year,” The Real Deal’s Amy Fennery reports. “Manhattan renters were paying, on average, $3,127 a month in the fourth quarter, up slightly from the third quarter, when the average rent was around $3,100. Rents are well above the first quarter, when the average was $2,926… Meanwhile, the Manhattan vacancy rate dropped to 1.21 percent in fourth-quarter 2010 from 1.79 percent during the same time period a year earlier.” None of which, as we mentioned earlier, is exactly what renters want to hear, but none of which is exactly surprising, either.

The surprise? That rents managed to jump despite a huge surge in the number of new Manhattan rental listings on the market in 2010. With new construction rental projects that froze during the early years of the downturn beginning to thaw — and, in some cases, actually open their doors — in 2010, a bumper crop of new luxury rentals hit the market last year. “According to Reis, developers delivered 7,118 units last year,” the Wall Street Journal reports. “That was way up from 1,377 the previous year and the largest volume since 1987.” It’s a testament to the NYC rental market’s strength that so many willing renters were there to snap these listings up.

And with the market likely to tighten in 2011 — when only 1,422 new rental listings are expected to hit the market — rents look likely to go up even more dramatically as supply tightens and demand remains… well, its usual robust demand. All of which lends a bit of urgency to our usual encouragement to browse our Manhattan rental listings, we’d say, but none of which, really, should come as too much of a surprise.

Filed under: Company News | December 28, 2010

We spend a decent amount time pondering the ups and downs of the Manhattan condo market. This means all kinds of chatter and gossip and so on about various NYC condominium listings and rising neighborhoods and new buildings and so on. But at some point, all of that fun stuff comes back to something decidedly less exciting — the mortgage rate. The impact of those rates on all these condo listings isn’t hard to figure out — the lower the mortgage rate is, the more appealing an investment a Manhattan apartment comes to seem. All of which means that, when mortgage rates dipped to record lows just a few months ago, we did everything short of pop champagne at the prospect of how much easier 4.17% fixed-rate mortgages would make it to purchase a Manhattan apartment. Today, with rates climbing at a rapid clip and most forecasters predicting that they will continue to do so throughout 2011, it would stand to reason that we’d be somewhat less bullish on the NYC real estate market for the coming months. But while that’s true at a certain level, the rising mortgage rates — 5.02%, per Bankrate.com — aren’t all bad news. We may not be popping champagne, but honestly it’s still a little close to New Year’s Eve for that. More to the point, thoguh, the rise in mortgage rates isn’t necessarily bad news.

“The increase will push mortgage payments higher for homebuyers. When rates rise from 4.25% to 5% it takes away about 9% of buying power,” CNN’s Les Christie writes. Which is obviously not good news, but also — if perhaps less obviously — not exactly a death sentence, given the rate to which home prices in general, and Manhattan condo prices to a somewhat lesser degree, have tumbled in recent years. With the economy belatedly showing signs of a comeback, it wouldn’t be a surprise — or a bad thing — to see the housing market stabilize, and higher mortgage rates may be a part of that. In fact, Christie writes, the increase in fixed-rate mortgage rates may wind up strengthening the real estate market by encouraging home buyers to lock in a more favorable percentage, before the rate rises again.

“Higher interest rates may even prove stimulating to the still quiet housing market in which sales volume and prices are scraping near their bottoms. ‘The initial phase of an interest rate increase generally does not hurt markets,’ said Lawrence Yun, chief economist for the National Association of Realtors. ‘In fact, it can help.’ The rapid rise introduces an element of urgency for potential homebuyers. They may now rush to buy before rates spurt even more.”

What does this mean? Most immediately, it probably means that browsing our Manhattan condo listings should be done with an increasing sense of urgency. More broadly… it’s hard to say. But it was bound to happen sooner or later, and if it augurs an improving economy (and a stronger Manhattan condominium market), then these rising rates might not be so bad after all.

Filed under: Company News | December 7, 2010

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