Real Estate
October 19, 2009
Manhattan vs. Brooklyn, Boom and Bust
Jonathan Miller posted a neat little graph over at Curbed on Friday, which attempts to show the savings of living in Brooklyn vs. Manhattan over the past seven years. Mr. Miller acknowledges that the graph is "simplistic and fraught with problems," but it gives an approximated view of how much buyers save by living in Brooklyn, and that saving's relationship to the boom and bust years. Using median sales price data (of condos? co-ops? houses? all available residential sales?), Mr. Miller concludes that the peak time of Brooklyn savings relative to Manhattan was the second quarter of 2008. Again, it's an approximation, but an interesting one. Take a look at the original article for more details.
Three Cents Worth: Manhattan to Brooklyn Value Proposition [Curbed]
October 14, 2009
The Locale: Greenpoint Condo Auction
The Locale, a four-story, 16-unit luxury development in Greenpoint from TreeTop Development, is going on the auction block November 11, reports Curbed. This is the sign of the times that the media and real estate business have been expecting—developers have already opted to unload their stagnant projects elsewhere, but this is the first in Brooklyn. The building, at 267-269 Kingsland Avenue, offers one-bedroom and one-bedroom duplex units, some with balconies and views of the Manhattan skyline. The auction will be held at the New York Marriott, 333 Adams Street, at 7:30 p.m., where bids will start at $150,000—as low as 25 percent of the original asking prices of $445,000 to $600,000. points out that Brooklyn condo sales dropped nearly 30 percent in the second quarter, and median sales prices fell 16 percent. GMAP P*Shark DOB
First Condo Auction Looms in Brooklyn [Crain's]
On the Block: New Greenpoint Condos Heading to Auction! [Curbed]
The Locale Auction Listing [Sheldon Good & Co]
October 13, 2009
To Own or to Rent?
Over the weekend The New York Times profiled a series of co-op or condo owners who became renters either due to the market downturn, size requirements, or both. The article begins, for example, with a family of four that moves from an 850-square-foot Upper East Side two-bedroom, one-bathroom co-op to an Upper East Side rental—three bedrooms, three bathrooms, and 1,400 square feet for $5,200 per month. The praises sung for renterhood include: freedom from responsibility and anxiety, fewer financial requirements, more space, and sometimes more amenities. Some of those profiled in the article, however, miss ownership: the camaraderie in the building, the freedom to renovate and customize, the autonomy of ownership. Those profiled are primarily individuals, couples, or families who live in expensive Manhattan neighborhoods like the Upper East Side, the Upper West, or Greenwich Village—people who can afford rents of $5,000. It would be interesting to hear from readers with a wider range of incomes and locations. For example, has anyone out there had a similar experience in Brooklyn, where you have recently sold a house or apartment (either by choice or necessity) in order to become a renter?
Owners No More [NY Times]
Image by Mark Ovaska
September 28, 2009
Appraising the Appraisers
Appraisals, for all their importance in getting a mortgage and buying a home, seem to be rather nebulous. This past weekend, The New York Times ran an article pointing out several gray areas in the art of appraising. First of all, a change in the Home Valuation Code of Conduct that took effect back in May gave banks exclusive power over the appraisal process. The plus side, and intent of the change, is that brokers, builders, and buyers cannot influence the appraisal as much; the down side, according to some appraisers in New York, is that banks are using national appraisal firms that assign appraisers who charge lower fees—i.e., less experienced appraisers who are likely unfamiliar with the local market, something which is essential in New York City's market of microscopic subclimates. It is common, of course, in a down market for appraisals to come in low, but the combination of inexperienced appraisers and fewer data points due to lower volume might result in inaccurately low valuations. Buffalo News made a similar report about the appraisal industry upstate, and CNN Money reported that the housing industry met with New York Attorney General Andrew Cuomo last week to protest the current Code of Conduct, and the attorney general's office agreed to consider the matter further. The primary sources for these articles are brokers and local appraisers. We'd like to hear from other players in the game, as well. Any bankers, buyers, or national appraisers out there who want to throw their hat into the ring?
New York Appraisals Get Shortchanged [NY Times]
Tougher Appraisals Make Home Sales Harder [Buffalo News]
Housing Industry to Cuomo: Let's Work Together [CNN Money]
Photo by Richard Wanderman
September 21, 2009
The Return of the Rooming Houses?
A neighborhood in Harlem expressed concern to The New York Times over developer Gerald Migdol's attempt to convert an 18-foot-wide brick row house back into a rooming house. The neighbors are worried that the conversion of 228 West 132nd Street will decrease the quality of the neighborhood. Mr. Migdol told the Times that the conversion, which will have nine single rooms with bathrooms, two two-bedroom apartments, and a communal kitchen, is legal: even though the city forbids new rooming houses, it allows an owner to restore previous rooming-house units, as is the case at 228. Has anyone heard of this happening in Brooklyn? We've seen luxury condo developments here in Brooklyn go rental instead of keeping units on the market and there's lots of talk about turning other failed luxury condo projects into affordable housing, but has anyone heard of conversions back to rooming houses?
Rooming House Returns [NY Times]
229 North 8th Goes Rental [Brownstoner]
Brokers Find a Silver Lining in Autumn Data
Real estate analysts and brokers are still looking for a silver lining—a sign that the profitability of the boom years hasn't completely vanished—and they are currently looking at inventory data as a sign of hope. The week after Labor Day is a common milestone for the real estate business: the summer season has ended, vacationers are returning, and usually there is a small increase in the number of listings. This year, the number of post-Labor-Day listings on the market in Manhattan were similar to last year's, reports The New York Times. Even though prices are still dropping, companies like Miller Samuel and StreetEasy say this could mean that transaction activity and inventory are stabilizing, which might indicate an end to the downward spiral. As for prices, the median asking price after Labor Day in 2007 was $1,050,000; it was $1,100,000 in 2008; and it dropped to $860,750 this year. Or, breaking it down, studios went from $525,000 in 2007 to $429,000 in 2008 to $399,000 in 2009; one-bedrooms went from $785,000 to $775,000 to $675,000; and two-bedrooms went from $1,412,500 to $1,599,500 to $1,250,000. Hall Willkie, the president of Brown Harris Stevens, gave the Times a less broker-centric view of the numbers: “In many ways, it’s going to be a healthier market ... It will be more affordable to more people, which is more sustainable. A lot of money was made during the boom years, but I don’t know if it’s such a great world when people with good jobs and a good income can’t buy a home.”
Looking for the Bottom [Brownstoner]
The Look of Autumn [NY Times]
September 15, 2009
New Rules for First-time Home Buyers
The New York Times this weekend joined throngs of other analysts and media outlets in pointing out that there are multiple culprits to the financial collapse that is now a year old—and that we, in addition to bankers and brokers or lax government officials, are partly to blame. People had fallen into the habit of stretching their finances to buy as much house as possible for their first-time buy, the Times says, and the paper offers seven new rules of buying to replace this and other unreliable maxims of real estate. It begins with the basics—put 20 percent down, get a fixed-rate mortgage, and don't spend more than 35 percent of your pretax income on your mortgage, property tax, and home insurance—and continues with more detailed advice such as mapping out your expenses and forecasting your future income. It's more than we can reproduce here, but the full article is worth a read.
Seven New Rules for the First-Time Home Buyer [NY Times]
Photo by triada53
September 1, 2009
Advocacy Org Finds Ubiquitous Housing Discrimination
The Federal Fair Housing Act was passed 40 years ago, points out the Gotham Gazette, which allows the Department of Justice to prosecute "patterns or practices" of "housing discrimination", and yet housing discrimination persists, according to the Fair Housing Justice Center, a non-profit advocacy organization. There is a significant dearth of affordable housing, for example, and the sales and rental markets are operated by brokers, some of whom use illegal practices and propagate discriminatory concepts such as the idea that it is okay to set a limit on the number of children. The FHJC gave the Gazette several examples of discrimination based on race (NYC is the fourth most segregated metropolitan area in the U.S. for African Americans, and the fifth most for Latinos), disabilities (such as new buildings that flaunt flout design requirements for access to disabled people), or income source. In July 2008, for example, the FHJC found that close to 400 posts from 161 different real estate companies on Craigslist discriminated on income source alone, using phrases like "no government programs." As a solution to these violations of rights, the Center is pushing for better training of realtors and brokers, consistent and flexible enforcement of existing laws, and improved regulations towards marketing practices that will make all available units visible to all demographics.
Housing Bias Persists [Gotham Gazette]
August 31, 2009
Brokers: Contracts Up, Pessimism Somewhat Down
The New York Times reports that brokers have witnessed an increase in the number of contracts from June to the beginning of August. In the past, the spring selling season has begun in May, followed by a slower stretch in the summer, which makes this uptick in contracts like a late spring. Prices have not increased accordingly, and brokers and analysts are wary of overly optimistic interpretations. "My take-away is not that the market is turning, but that the market is not in free-fall anymore," Jonathan Miller, the president of Miller Samuel, told the Times. "We still have a ways to go, but this is certainly good news," he said. Tax incentives, lower prices, and low interest rates may have contributed to this increase in activity, but brokerages are aware that there is a lot of inventory still waiting to reach the market and that unemployment is still on the rise. Jorden Tepper, the executive director of sales at Century 21 NY Metro, told the Times: "I don’t think there’s anything to celebrate yet ... [but] maybe I don’t have to change careers just yet." Brokers, of course, have a different ideal than the general public. While they are hoping for a return to bubble-like statistics, hopefully once the market evens out, there can be a balance: a market healthy enough to support brokers, but reasonable enough that average New Yorkers can afford homes. Or, at least we can dream, can't we?
Contract Signings Rise [NY Times]
Looking for the Bottom [Brownstoner]
Photo by Ron Givens
August 24, 2009
An Italian's New York Dream
The New York Times ran a profile last Friday about Francesca Basile, a 24-year-old Italian woman moving to New York with dreams of owning a sun-drenched apartment somewhere in the city. It chronicles her first search in Harlem, including the challenges home-buyers—especially international buyers—come up against, but she eventually finds a suitable condo in Clinton Hill/Bed-Stuy, at 582 Marcy. The Times piece paints a happy ending, one of a young woman making her New York dream come true (with the help of her father's funding), and we hope that Ms. Basile is happy with her purchase, since she seems to be the only person buying at 582 Marcy, according to StreetEasy. The only other sales activity there this year was back in April, and prices for units have been decreasing. But Ms. Basile seems content with her home, and once the market recovers, who knows? It could turn out to be a sound investment. GMAP
A Long-Distance Romance [NY Times]
582 Marcy Ave., sales history [StreetEasy]
August 18, 2009
Looking for the Bottom
Ever since the real estate bubble burst and market indicators across the board started plummeting, everyone has wanted to know when the market was going to reach bottom. Well, maybe we're there, nationally speaking. Dean Baker, of the Center for Economic and Policy Research, thinks so; he told AP via Fox News that "the freefall is over." AP cited several nationwide statistics from the past two weeks: "home resales in June are up 9 percent from January, on a seasonally adjusted basis; sales of new homes have climbed 17 percent during the same period; and construction, while still anemic, has risen almost 20 percent since the beginning of the year." In the Northeast, "home resales in June hit a seasonally adjusted pace of 820,000, up 28 percent from the beginning of the year. Sales of new homes were also up slightly and construction in the region more than doubled." It is the amateur statistician, however, that reads too deeply in short-term statistics. The improvements in the market, so far, can only provide hope that the worst is behind us, but economists warn that even if this is the bottom of the barrel, we may stay down there for a while longer.
Welcome to the Bottom [Fox News]
Photo by AvarieRiot
August 17, 2009
The Emotional Undercurrent of Buying and Selling
Inside the real estate bubble of yore, buyers could act as impulsively as they wanted, reports The New York Times: if buyers changed their mind, they could always sell at a profit. But in today's market, "buying a home is more psychologically demanding, fraught with conflict and confusion." For buyers, especially those without much capital to burn, deciding on a home can be extremely stressful, since it involves a long-term commitment. And for sellers, some of them refuse to sell now, even if it's a good idea for them, because they don't want to feel regret or shame at having bought at the height of the bubble. Kathleen Gurney, the chief executive of the Financial Psychology Corporation in Miami, told the Times, “People will do anything to not regret how they feel," including extending their losses so as not to feel stupid. The article also explores the differences in the market and people's perception of the market. Even if this is a good time for some to buy or some to sell, we are pack animals, and when the pack is afraid of dealing in real estate, so is the individual. As Dr. Gurney said, potential buyers and sellers would rather "be a part of a crowd, even a crowd of losers, than stand out.”
In the Grip of Indecision [NY Times]
Photo by LunaDiRimmel
August 10, 2009
All Along the Clocktower
Back in June, we heard that David Walentas was finally putting the clocktower apartment at One Main Street (shown at right under construction earlier this year) on the market. The New York Times reported on Friday that this colossal triplex is finally posted, for $25 million. The Times notes that the highest price ever paid for a home in Brooklyn was $11 million in 2006, and the highest for a condo was $7 million, also at One Main Street, in 2008. Even though the market is in a slump, Mr. Walentas said that the space, a three-floor, 6,288-square-foot apartment with four functional 14-foot clocks, is such a unique home that it will require a one-of-a-kind buyer willing to foot the bill. GMAP
Walentas Putting Clocktower Manse on Market? [Brownstoner]
No Need to Wear a Watch [New York Times]
The Best Bet [New York Magazine]
August 3, 2009
Heights Rent-Controller Out on a Technicality
"Rob a bank, and if the federal government doesn’t catch you in five years, you’re off the hook," said Josh Barbanel in a Times story this weekend, but for Robert Nocco, no statute of limitations could save him: the new owner was able to rummage back to 1976 to challenge Nocco's right to a rent-controlled apartment in Brooklyn Heights, at 222 Henry Street. Mr. Nocco's parents moved into the apartment about fifty years ago, the article explains, and until June, Mr. Nocco, who was paying $212 in rent every month, had thwarted several legal attempts to remove him from the apartment. The current owner (who paid $386,566 for the five-story building in 2005, according to Property Shark) took his case to state housing regulators and noted that in 1976, Mr. Nocco rented another apartment in Brooklyn, while his parents moved to Florida. Since regulations would require Mr. Nocco to have lived with his parents for two years prior to taking over a rent-controlled apartment, this was enough for a housing officer to rule in the landlord's favor. The two parties reached a settlement (“in the very low six figures”), and Mr. Nocco moved out in June.
Rent-Control Rights Stripped Away [NY Times]
July 20, 2009
It Pretty Much Sucks to be a Seller Right Now
This weekend's real estate cover story in the Times examines the plight of folks who have to sell their homes now because of things like job relocations. Case in point: "Mr. Rogers, his wife, Gillian, and their two small children had been comfortably ensconced in a four-bedroom, 2,000-square-foot condo in Clinton Hill, Brooklyn. The couple bought it for $599,000 in cash in January 2006, after selling the Hell’s Kitchen apartment they had outgrown for $920,000 at the height of the market, and pocketing a profit that was three times what they had paid. They hoped to make a similar killing by buying into another gentrifying neighborhood. 'I used what I called the Starbucks index,' Mr. Rogers said. 'There were no Starbucks around in Hell’s Kitchen when I bought there, and when I sold there were four. There were no Starbucks here either when I bought.'" Fast forward to now, when Rogers has been relocated overseas, and we find the family unable to rent the condo or sell it for what they paid a few years ago (which would mean a loss of around $60,000 in transaction costs). Other hard-luck stories include a couple who have to sell or face housing their baby in a closet. The unifying theme: It's tough out there for sellers.
Gotta Move, Gotta Sell [NY Times]
Pic by AnnabelB.
June 29, 2009
Slope Century 21 Franchise Calls it Quits
Add another one to the growing list of shuttered brokerage storefronts: The Century 21 franchise on 5th Avenue between 8th and 9th streets is evidently out of business. Workers were clearing out the office last week. No word on what's going in the space next. GMAP
June 8, 2009
Manhattan's Bounce Detectable in Brooklyn?
The cover story in this weekend's real estate section of the Times is about how the Manhattan market is showing signs of recovery. Brokers say that in the past couple months deals have been picking up for most kinds of properties (pricey new condos are the big exception). Still, prices are off about 30 percent from the same period last year, and there were 55 percent fewer closings recorded in public records at the end of May of this year as compared to the same quarter last year. Appraiser Jonathan Miller isn't seeing anywhere near a full recovery yet: "'You did see an upturn in activity this time of year,' he said, but 'it was not a robust spring.' Mr. Miller said that the spring did not 'undo the damage that occurred last fall' during the banking crisis, and that prices still appeared to be slipping, though at a slower pace than earlier in the year." Still, brokers say there have been bidding wars in recent weeks and that would-be buyers who sat on "the sidelines" in the past few years are now looking to buy property in Manhattan based on the idea that they can now get more bang for their buck. The question for us, unaddressed in the article: Is the Brooklyn market showing any of the same tentative signs of rebounding?
Honk if You Think It's Over [NY Times]
Photo by Amazin' Jane.
May 29, 2009
Levine Talks One Brooklyn Bridge Park Closings
The Real Deal sponsored a panel discussion that included a number of real estate professionals with projects around the city, including RAL Companies' Robert Levine, the developer of One Brooklyn Bridge Park. Levine dropped some tasty tidbits on how sales at the condo are going: "about 90 of the 126 units in contract have closed, another 20 may fall through, and the remaining condo unit buyers are trying to renegotiate, Levine said. The units are selling for an average of over $1,000 per square foot, he said." In case that sounds unimpressive, Levine said it's been much easier to get contract-holders to close at 1BBP than at an RAL development on the Upper East Side. Last time we heard about the 449-unit 1BBP, of course, was earlier this month, when RAL announced it was cutting prices on many units and renting out others in the building.
Residential Trends Vary by Nabe, Panelists Say [The Real Deal] GMAP
Rentals, Price Cuts and Loan Extension at 1BBP [Brownstoner]
May 27, 2009
Case-Shiller: Record Drops in NY and Nationwide
The latest Standard & Poor’s Case-Shiller Home Price Index stats are once again grim: Prices in 20 major metropolitan areas dropped in March by 18.7 percent from March 2008, about the same level of decline as has been documented over the past few months. Here in the New York region, home prices fell 2.5 percent between February and March of this year—a record drop, according to the Real Deal—and 11.8 percent year-over-year. As TRD notes, the index does not include condos or co-ops. The Times makes the point that New York is far less screwed than other places, at least so far: "New York and Detroit, while both reporting large monthly declines in March, show the different legacies of the boom. New York is still up 73.4 percent from January 2000, while in Detroit prices are 29 percent lower. A Detroit house costs about the same today as it did 14 years ago." The national Case Shiller index for the first quarter, meanwhile, showed a 19.1 percent decline compared with the first quarter of 2008, the biggest drop in the index’s 21-year history.
Home Prices Decline Again in March [NY Times]
Home Prices Fall By Record Amount in 1Q [The Real Deal]
May 6, 2009
StreetLevel: The Argyle Closes Up Shop on 5th Avenue
The Argyle condo's sales center on 5th Avenue is no longer; according to the building's website, there's now a model apartment on site at the condo, which is on 7th Street and 4th Avenue. There are currently 12 active listings for the development. We wonder the extent to which the 5th Avenue digs helped sell units in the 4th Ave condo.
The Argyle: Using 5th Avenue to Sell 4th [Brownstoner] GMAP
Corcoran Serving Value Meals in Brooklyn in May
In an effort to inject some sense of urgency among buyers, Corcoran is teeing up three Saturdays worth of neighborhood walking tours with special one-day incentives hidden at each stop: price reductions, renovation credits and closing cost discounts will all be used as carrots. (They'll save the sticks for making the sellers lower their prices!) Four walking tours are scheduled for this weekend: Bed Stuy/Bushwick, Clinton Hill/Fort Greene, Crown Heights and Williamsburg. Pretty smart way to leverage the firm's scale, we'd say. Of course, it'll only matter if it results in some deals. Park Slope down through PLG is set for May 16 with Dumbo and BoCoCa planned for May 30th.
May 5, 2009
At the Roundtable...
If you followed us on Twitter you'd already know this but...we just got back from the quarterly Real Estate Roundtable at the Brooklyn Historical Society. Lots of info to dispense in the coming days but these two take-aways couldn't wait: 1) After missing out on the real estate boom, Brooklyn Boro Prez Marty Markowitz announced that he is now in the market to buy a place! 2) Corcoran CEO Pamela Liebman on the great broker shake-out of 2009: "A lot of brokers won't survive this."
April 28, 2009
Values Down, Taxes Up
The market value of all property around the city is forecast to decline between 2009 and 2010 but property taxes that the city collects will rise 10 percent, according to the Independent Budget Office. The current issue of the Gotham Gazette examines why that's the case. The main reason is that increased market values are phased in over a five-year period; each annual increase is also capped, so properties in areas that have experienced rapid run-ups this decade can take years to get caught up. The more interesting part of the article is the discussion of how the property tax system continues to favor house owners over owners of commercial buildings and co-ops and condos. The most glaring example is that one-, two- and three-family houses are assessed at 6 percent of their market value versus 45 percent of market value for the other property types. Can you imagine what would happen to the value of your typical house if its properties went up seven- or eight-fold?
Why Property Taxes Rise While Real Estate Falls [Gotham Gazette]
April 27, 2009
Real Estate Deal-Making by Email
We can still remember a Saturday afternoon in the spring of 2004 when we sat sipping beers in the outdoor bar that used to exist on Bedford Avenue and North 1st Street (what was that place called? Answer: Yabby) while trading Blackberried bids with our broker over a house on the corner of Willoughby and Waverly in Clinton Hill. We didn't end up striking a deal on that place, but that experience came back to us while reading the Times article on the subject this weekend. Not surprisingly, the practice is commonplace and has its pros and its cons: On the one hand, according to one Harvard Business School prof, communicating by email helps people be more direct about their demands; on the other, it's very difficult to convey nuance by email. Therefore, "[email] can tend to go wrong if there’s any kind of conflict or misunderstanding,” says Wharton'sG. Richard Shell. That's why many brokers don't like the email trend. “I’m old school — I still like to hear the other broker’s voice to get a gauge of where the deal is," says Steve Goldschmidt of Warburg Realty. "There’s no substitute for the sound of a voice.”
The E-Mail Handshake [NY Times]
February 13, 2009
Real Estate Roundtable Raises $140K for Historical Society
In its second full year of existence, the Brooklyn Real Estate Roundtable raised $140,000 for the host of its quarterly luncheon series, the Brooklyn Historical Society. Steering committee members Jason Muss (Muss Development), Eric Brody (The Brody Group), David Kramer (Hudson Companies), Chris Havens (Creative Real Estate Group), Jed Walentas (Two Trees), Tim King (CPEX), Michael Kaye (Douglaston), Paula Ingram (Ingram and Hebron) and Ken Krasnow (Massey Knakal) handed the oversized check to Historical Society head Deborah Schwartz at Tuesday's gathering which featured appearances by City Council Speaker Christine Quinn, Edge developer Jeff Levine, Toren developer Don Copaccia and Red Hook kingpin Greg O'Connell. "BRER is a great opportunity to converse about a wide range of real estate issues including the residential, retail, office, hotel & industrial markets with its most active participants," said steering committee member (and Third & Bond blogger) David Kramer. "It's also a great chance to show off and raise money for the Brooklyn Historical Society, so it's a win-win."
Latest Restaurant Additions
-
Chickadee Chick
added November 6, 2009 12:00 PM in Park Slope -
Vutera
added November 5, 2009 12:00 PM in Williamsburg -
Park Cafe
added November 4, 2009 12:00 PM in Park Slope -
Bahia
added November 3, 2009 12:00 PM in Williamsburg -
Aqualis Grill
added November 2, 2009 12:00 PM in Fort Greene -
Wombat
added October 30, 2009 12:00 PM in Williamsburg -
Organic Heights
added October 29, 2009 12:00 PM in Park Slope -
Giardini Pizza
added October 28, 2009 12:00 PM in Carroll Gardens -
Rye
added October 27, 2009 12:00 PM in Williamsburg -
Bati
added October 26, 2009 12:00 PM in Fort Greene