Monday, November 12, 2007

Cold Weather Q&As

Is this a good time to buy?

If you are looking for a home that you plan to live in for several years (minimum 5-6), then you will not suffer from any negative price trends, since you will have use of your home while prices are recovering.

If you are looking for an investment, then you need to be extra picky about the exact property that you purchase - making sure that the cash flow will be sufficient to cover the mortgage payments and other carrying costs. This way, you can keep and rent the property indefinitely in the case of a negative price trend.

Is this a good time to sell?

In New York City, the time on market appears to be holding steady. However, as we head into the holiday season, more casual buyers may put their home searches on hold until after the New Year. If you must sell due to relocation or other personal reasons, pay special attention to how your property is positioned against its competition - the other properties available for sale. Pricing is key to selling your property quickly during the slower winter months, but rest assured that transactions are happening.

If you are thinking of selling an investment property, consider the amount you are hoping to get for it versus the amount of revenue it generates. Pricing appropriately for a cashflow property will bring an investor much faster than pricing in the hopes that a developer will come along intending to convert to condos.

Is this a good time to rent?

This is the BEST time of the year for renters, and it stays good right up until around February 15. That's because rents are a little lower, and more negotiable. And more landlord incentives for agents (ie, paying our fees so you don't have to) and renters (free rent, etc.) pop up during this time. In fact, we saw them coming out a little early this year in Manhattan. In the outer boroughs, they are fewer and further between, but can be found in Downtown Brooklyn and Long Island City, Queens.

A lot of people prefer to look for new apartments in the summer, but moving in the offseason means better prices all around. Bundle up and give it a try!

Contact me today to strategize the best move for you.

Monday, September 17, 2007

Slim Pickings in Brooklyn

The evidence here is annecdotal, but it's starting to get a lot slimmer pickings in Brooklyn right now. Previously, listings were plentiful in the pleasant and affordable neighborhoods of Kensington, Ditmas Park, Midwood, Sunset Park and Bay Ridge. Apartments ranged from the extremely affordable $900 to approximately $1150 for a spacious one-bedroom. Then, two things happened during the summer:

First: buildings rented up like wildfire! Several buildings in the Ditmas Park area had multiple listings through the summer (we're talking 15 or more listings at any one time), but they all rented within two weeks at the end of August. Agents are waiting for the next listings in these buildings like fledgling birds awaiting their mother's return to the nest.

Second: Prices went up. I work with a lot of people who, realizing that they were priced out of Park Slope/Cobble Hill/Brooklyn Heights, have settled on Ditmas Park as a viable alternative. Unfortunately, 1-bedroom apartments have risen in price. Apartments closest to Cortelyou Road and Stratford Road (where Vox Pop and the majority of hot shops and restaurants are located) are renting for $1150-$1350 now. Over towards Ocean Ave, studios and small 1 BRs are renting for $1100 minimum, with larger, spacious 1 BRs starting at $1200 and going up.

People who contact me looking for new apartments have been pretty disappointed, and I don't blame them. Most people have a primary concern of being too far from Manhattan. Even though the Q train is amazingly fast, even from Ave J, it's a long way to go in the eye of someone who's perhaps moving in from out of town, or possibly a recent college grad who basked in the glory of the Village, but can't find affordable housing there outside the dorms and other student housing. I suggest other nice apartments to them such as Sunset Park or Bay Ridge, but quite frankly there's not much left there either. Bay Ridge has really gotten pricey, particularly in the choicest areas near Shore Road. There are great apartments available on the east side of Fourth Ave, but people have proven strangely resistant to that side. It honestly boggles my mind, considering how much closer to the subway these apartments are. If interested, check out the link:

Sunset Park is another area that people seem ready to shun without even peeking. While it's true that Fourth and Fifth Avenues are bustling and seem busy, the side streets sport shaded brownstones interspersed with small and medium-sized apartment buildings. I was surprised and impressed to find a Starbucks in the 50s on Fifth Avenue, with more undoubtedly along the way. Sources tell me that the Chinese food there is just as good as what you find in Chinatown, and the Indian food is yummy too! 36th Street is an express stop for N and D trains, so you won't have far to walk. This neighborhood is one that I have definitely not explored enough yet, but I encourage all the bargain hunters who don't want to be "too far away" from Manhattan to make a bee line over and check it out!

Wednesday, July 18, 2007

43rd & 9th Ave Is a Great Place to Be

Yesterday I had the good fortune to be an extra on the set of Law & Order: SVU. The shoot was on the sound stage in Bergen, NJ. When that happens, L&O provides a courtesy bus for those of us who live in New York without a car. So it was that, at 6:30AM, I arrived at West 43rd Street and Ninth Ave in Manhattan.

I must confess that as a real estate agent, I haven't worked much in that neighborhood. Quite frankly, most of my clients lately try to live in Gramercy or the East Village. And as usual, the budgets are on the low end (low meaning under $2500 per month for a one-bedroom apartment, which is low for Manhattan these days as the current average is just over $2700 per month). Most of them are students going to one of the Village-based colleges (NYU, New School, SVA), so I understand why they would want to live there. But, with the amazing price jumps year after year, I have to wonder why they wouldn't want to consider one of the other affordable parts of Manhattan.

The three most affordable parts of downtown Manhattan are: Lower East Side, Hells Kitchen, and Murray Hill, with parts of the Financial District in fourth place. The reason for this? Well, the first two had a reputation for shabby housing: walk-up tenements with little to no renovation, and the neighborhoods had little else to recommend them, since the retail basically consisted of discount retailers, bodegas and, in the case of Hell's Kitchen, a lot of peepshows.

Well, being there the other day sure opened my eyes. When I moved to NYC in 1997, the Kitchen was shaking its image as a haven for the adult trade, but didn't have much to convince me to go beyond Eighth Ave. In the years since, a lovely restaurant row has popped up from 42nd streets to 50th or so, and condos have been in the neighborhood for the last 10 years as well. I was thrilled to discover a Starbucks at the very corner that I was meeting the bus (for, at 6:30 AM, I need an incentive to stay awake). Ninth Ave looks remade, from the corner of 42nd as far as my eye could see. Buildings have been rehabbed and new retail spreads north. Starting on 43rd streets, the charming tree-lined townhouse streets remain intact between Ninth and Tenth Aves. And yet, the subway is only a couple blocks away! It's truly a great place to be for theater lovers. Party-goers will find it easy to get downtown, but the Kitchen (or Clinton, if you want), will not feel isolated in their own neighborhoods either.

Rents in this neighborhood remain lower than other parts of the city. A real one bedroom can be found for $2300, a two-bedroom for $2800. So, if you have been looking for a nice neighborhood, go one block beyond busy Eighth Ave and you'll find it.

Wednesday, July 11, 2007

Homes Priced Too Low??

While the real estate markets across the country appear to be stagnant, two articles have highlighted the fact that in New York, and certain other local markets across the country, the markets are doing quite well.

The first article appears today in the New York Times on the front page. It's titled "Can't Sell Your Home? Maybe It's Priced Too Low". When I saw the headling on the print edition of the paper, I thought it was going to be some kind of critique on various pricing strategies. Instead, it turned out to be a broadly-focused (if that's possible) article on how highly-priced homes are selling very well, and still selling above asking prices in some cases, in New York, San Francisco, Seattle, and other areas where there are high concentrations of affluent people. It notably excepted Washington DC and San Diego from this trend (much to my mother's dismay - she's a real estate agent in Washington DC).

The article offers little explanation for this trend except that people who were already doing well for themselves seem to be doing better. I'm not sure if this is true, but I can't think of a better explanation. It stands to reason that someone who had enough money to have a lot of investments is probably going to be doing pretty well right now. In addition, the article mentions foreigners coming in and buying homes in areas where they may travel or work often, such as New York or San Francisco. It's hard to believe that a $3 million condo would look like a bargain, but if you make allowances for the exchange rates, taxes in their native countries, and the fact that certain countries put restrictions on foreign ownership of property, it starts to make more sense.

The second article appears in this month's edition of The Real Deal, the New York City real estate trade publication, titled "Residential Market Weak In the Middle", discusses the same trend in Manhattan. It appears that in addition to the typical high-end buying that continues to push average and median prices up in New York, lots of first-timers are jumping in feet first as well. So, you have lots of activity under $600,000, and lots over $5 million. What's in the middle? Most of the new construction condo price points. The larger choice there seems to be causing a little slack in the sales prices and timelines, but one look at another article "New Condo Filings Fall Off" suggests that in a year, this might not be the case. Apparently, attorney general applications for new offering plans have fallen by 50% (2800 units as opposed to nearly 5000 a year ago). What does this mean? It means that there is not as much competition coming online for the condo units that are currently on the market, or about to come on the market. In market-speak, Manhattan will be able to "absorb" the current units, and that may put us back where we were in terms of low inventory two or three years ago. Co-op units are already extraordinarily low - people who are not in the market for new construction have been facing bidding situations for several months now, since the beginning of the year.

Now, this doesn't mean we will get back to the hot hot market of 2004-2005. That was insane. For one thing, a lot of purchasing power rides on the interest rates and the economy. Interest rates popped up a bit a couple weeks ago (affecting a couple of my buyers in the $400K range), and that can affect the monthly payments buyers can afford. But overall, the New York market seems cautiously optimistic that values will hold for the near future, and that gives buyers enough confidence to go ahead with their life plans.

As always, please email me to discuss!

Sunday, July 08, 2007

Rents Are Up in Brooklyn...

So as most of the places I've been renting to clients these days have been in Brooklyn, I have noticed with amazement just how expensive this little borough is getting! I mean, rents in Brooklyn Heights and Dumbo are almost to the $3000/month mark for some of the new construction apartments and condos that are going out on the rental market. Pretty crazy.

But even down in my little neck of the woods -- that being Windsor Terrace, Kensington, and Ditmas Park -- rents are much higher than two years ago. Right now, in Kensington you are lucky to get a one-bedroom for $1300/month. In Ditmas Park, I don't see them below $1200/month. Two bedrooms in Kensington are pushing $2000. We have some $1600/month two bedrooms in the Ditmas Park area over on Ocean Avenue, but since most people want to live on the "cool" side, down near Coney Island Ave, they can be a hard sell (although the gorgeous renovations and the promise of a dishwasher has been enough to get a lot of people interested!).

For my money, I think the next coolest place in Brooklyn is going to be the Brooklyn College area. Yes, the neighborhood is on Flatbush Ave and Bedford runs right down there as well. The campus is open for people to walk through during the days, but at night or on weekends, only people with BC ids can get in. But that doesn't change the fact that there's already a Starbucks over there, and a Shakespeare & Co book store, aimed at the students. Now, a full-sized Target is in construction, probably going to open late this year. There are lovely leafy streets on the east side of Nostrand, along Aves I, J, and K. I got a Zipcar from there once, and it was very pleasant! Nostrand along BC campus is going to be amazing. Right now, there are a lot of local businesses, and I think if there were just a few extra boutique retail businesses, a lot of people would wake up and realize how nice it is down there. But we'll see. For now, the busy-ness of Flatbush Ave keeps people on the other side of Ocean Ave, near the Q train. But I see it coming!

Wednesday, July 04, 2007

Strange, New Market...

Lately I've been venturing into a brave new world... the Bronx. With a friend we've been looking at homes for sale in the Bronx. Though there has been a run up in value in the past several years, the values there are much more affordable than Manhattan, Queens or Brooklyn. We found entire HOUSES with driveways and backyards for under $400,000! The neighborhoods that we have been looking in have mostly been Baychester and Wakefield. They are nice neighborhoods with lots of green. Some are a bit far from the subway, but the 5 and 2 trains run up there. I highly recommend this neighborhood to anyone who wants a real house. Don't get me wrong, there are plenty of $600,000 and up houses, but there are some well below. Usually they are bungalow type houses on narrow lots, but it's a mansion compared to what you can get for similar $$ in Manhattan or parts of Brooklyn! And no messy fussy coop boards like in Queens (I can't believe how fussy those coop boards are!). And the agents are faster to cooperate as well. (yay!).

So, there's my latest recommendation for you all.... Until next time.

Friday, January 26, 2007

Analysis of the Sales Market

Below is a recent analysis of aggregate data from the sales market in New York City for 4th Quarter 2006.
Sellers, keep up the good work!! Buyers, adjust your expectations accordingly!!

The fourth quarter saw the average listing discount, measured from the
last list price change to contract price, drop from 4% in the third quarter to 2.8%. The drop in the listing discount seems to show that sellers are pricing closer to market levels rather than being tougher to negotiate with. This idea seems to be supported by the drop in the listing discount from the original list price to contract date. This indicator fell from 9.3% in the third quarter to 5.5% in the fourth quarter.

Of course, it's just one quarter and the prior two fourth quarters also saw large declines. But the difference this time is inventory fell, too, and the number of sales increased (not shown), which seems to support the idea that there may be less friction between buyers and sellers going forward.

[J. Miller - Jan. 25, 2007]