New York's the Same, the World is Better, What's Going On?

I am no Wall Street guru, but I follow the market pretty closely these days, as well as economic indicators throughout the world. Here is what we've got going:   .

1) Interest rates made a rather large move (.25% not really a large move, but for bond traders it's a large move)

 2) Several large retailers - and today Cisco, which is like the GE of pure tech plays - have reported lower than expected 2nd quarter results (whose expectations? it's sort of an average taken across many investment firms' analysts' projections).

 3) Walmart also missed on revenues, though not earnings (earnings are the actual income reported after all expenses have been removed), and cut its own projections for the rest of the year.

 However, other things are not all bad! For instance:

 1) July unemployment nationwide FELL to 7.4%, the lowest since 2007 - that's a YEAR before the crap hit the fan in 2008. Remember that before the credit crunch caused by the failures of Bear Stearns, Lehman Brothers and Washington Mutual, among many others. Many people forget that the downturn began in late 2004, when the first of the subprime mortgage crisis started to be felt.

 2) Europe, which caused an echo credit crunch on these shores as analysts scrambled to discern which of our multinational banks held how many Greek, Spanish, Irish, Cypriot, etc. bonds, has suddenly peaked its head out of the recession pit, according to the official statistics office of the European Union. China, too, has seen a slight rebound that is pulling materials and mining stocks up ever so slightly.

All that, plus lighter volume (which exaggerates price swings in an individual stock) made for a 200-point drop in the market today.

I watch the stock market because it seems to have more correlation to the real estate market in Manhattan (and increasingly, Brooklyn) than the markets in the rest of the country (which is why NYC's prices kept going up until almost the moment Bear Stearns went down). But it's hard to say what's the new normal here: the Dow made new highs nearly every week until April, had a correction in May, resumed upwards in June, and now in August (traditionally not a great month for the market) it's heading down again, mostly lazily but today in a more precipitous fashion. What will happen in September? What indeed? It's a soap opera that doesn't end.

My personal experience tells me that buyers are less likely to buy in New York when the market goes down. This might be because the buyer is actually employed in the financial industry, or it may be sympathetic concern, as most people in New York are at least cognizant of the market's moves, even if they aren't invested.

Dearth of buyers can lead to price drops, but only if there is a glut of properties relative to the number of buyers on the market. A quick glance at the live listings infographic provided by Urbandigs.com shows that active inventory (ie, properties currently listed for sale) has dropped nearly 20% in the past 3 months. In addition, properties in contract, after a huge 43% pop four to six months ago, has declined by 6% in the past three months. Finally, properties that have gone off market have increased over 15% in the past three months.

So, to summarize, fewer properties are on the market, at a rate that exceeds the drop in contracts signed. This means the inventory seems to be right-sizing itself. So, for the moment, prices in New York should remain unchanged.

We'll see how that works out when interest rates really begin to rise.

When is a Hotel Really a Hotel?

In 1997, I moved to New York, fresh out of college. For the first 2 years I lived here, I lived in Brooklyn Heights.

I didn't know many people back then. I lived first with a family friend whose grown sons had moved out, then with two roommates on the north end of Brooklyn Heights that I didn't socialize much with. I worked a lot of hours at my unpaid internship at a professional sports league office, and when I was done, I had no money and no one to spend it with.

So my first few months in New York, when I wasn't at a game, I spent my free time roaming the city, starting with my adopted neighborhood Brooklyn Heights. I wandered up and down the promenade and Henry Street where I lived. And I wandered up and down Montague Street where most of the shops were and still are. It may have seemed a lonely existence (and it was sometimes) but it was good for me, learning the streets of my new city and the buildings that lined them.

As Montague drew closer to the Promenade (a route I often took for the sheer sightliness) I came to know a large marble-columned edifice with arched porticoes, a building that stood far above its closest neighbors. As I recall, it had an awning, and the awning was embossed "Bossert Hotel". I never saw doormen there, or anyone going in or coming out, really. But it looked like a nice building. I imagined it was one of those old-time hotels with small rooms appointed in antiques.

So when my dad & stepmother said they were coming for a visit, I looked the number to the Bossert Hotel up in the phone book (remember when those were useful?) and called. A nice-sounding man answered the phone with the building's name.

"Hi, I'd like to if there are rooms available," I told him.

"Sorry?"

"My father's coming to town and I'm trying to find him a place to stay," I repeated. "Do you have rooms available for the Friday after next?"

"Umm, this isn't that kind of hotel," the nice man said.

"What kind of hotel is it?" I asked, envisioning some kind of extended stay requirement.

"This is a residence for Jehovah's Witnesses. We don't take paying guests."

"Oh."  I was really disappointed, not just because I wanted my father and stepmother to stay near my home, but because I really wanted to see the inside of the building. But Dad came and stayed in Manhattan, and I kept wandering past the Bossert Hotel, wondering what it was like in there, trying to catch a glimpse through windows positioned to reflect the sunlight back out. Eventually I moved out of Brooklyn Heights. To this day I never have seen the inside of the Bossert Hotel.

But that may be about to change. Apparently the Watchtower Society has put the building on the market and it's in contract now. According to this Brownstoner post, plans have now been filed to make the building back into a real hotel.  New York certainly needs the hotel rooms.  I am really looking forward to it, though, because I love to see beautiful buildings, inside and out. Here's hoping that the developers give it an inside (or preserve its inside) that matches the beauty of the outside I have so marveled at all these years.

REBNY opposes New Brooklyn Heights Commercial Landmark District

An interesting situation is unfolding at the eastern edge of Brooklyn Heights.  In September 2011 the NYC Landmarks Preservation Commission approved a landmark district called the "Borough Hall Skyscraper Historic District". This area includes 21 commercial buildings from the late 19th and early 20th century, from 7 story Romanesque-style to a modernist skyscraper, and several Art Deco era buildings as well. I frequent the area, and have often admired several of the included buildings, though I find the skyscrapers somewhat forbidding.

This week, Crains New York reported that the Real Estate Board of New York - an industry advocacy group representing most of the real estate agencies in Manhattan and many in the outer boroughs (my agency - M. Woods & Associates LTD -  is also a member of REBNY) - sent out direct mail to residents in the area asking them to oppose the landmark district and to press their City Council members to vote down the designation.  According to the Crain's article, the City Council has never denied or adjusted the borders of a historic district after it was approved by the Landmarks Preservation Commission (LPC).

The reason is because LPC has such a long process of considering proposed landmark districts, that most of the arguments have been hashed out by the time it gets to City Council. LPC has often designated smaller areas that ones proposed by preservationist lobbies such as the Greenwich Village Society for Historic Preservation (of which I am a member).  In this case, the Municipal Art Society of New York, Brooklyn Heights Association and New York Landmarks Conservancy proposed the Borough Hall Skyscraper Historic District.

Again, I frequent the area, and I do love the older Gothic and Romanesque buildings that were designated. I think there is a reason to protect these buildings. They are rather low buildings that are now in zoning districts that would allow much higher buildings, and therefore in danger of being torn down.  But I am undecided as to whether it is necessary to include the skyscrapers. After all, it's these are the tallest commercial buildings to be found in Brooklyn (with the exception of nearby Metrotech), now that the Williamsburg Savings Bank is mostly condominums.  In addition, which of these buildings is in danger of being torn down?  There are thousands of Art Deco era buildings on Manhattan that have been in service just as long, and are not deemed to deserve landmark status.

The reason given on the Municipal Art Society's web page speaks about recognizing the tremendous commercial growth that the district experienced "after (italics mine) the borough was consolidated into Greater New York."


REBNY's commentary has to do with the increased bureaucracy inherent with a landmark designation. It takes longer and is more costly to maintain the buildings' facades. I particularly note the quote from REBNY president Steven Spinola“The city just continues to landmark away its economic future.”  To some extent, I agree.  I support the landmarking of examples of past great architecture - I am around it more than most.  I am so grateful that the Village and Brooklyn Heights and Park Slope - all areas I love to be around - have been deemed worthy of landmark status.


But this issue has caused me to examine why I am so happy about it. And the truth came to me when I pondered when I thought about which buildings in this new district seemed deserving, others superfluous. The answer: height. While I love looking at all the Greenwich Village townhouses, I love more the sun on my face!  Same with Park Slope and Brooklyn Heights Brownstones. The townhouses are lovely, but I grew up in a Cape Cod and see the beauty there too.  Skyscrapers, in my opinion, don't need landmarks. But we do need more height restrictions in neighborhoods around the city. 


Another beef I have with Art Deco sky scrapers is the relatively small amount of window area they sport relative to their facade size. I worked in office buildings for many years, and often felt so stifled. How many occupational health studies have been done in office buildings that come up with a recommendation that more sunlight = more happy and productive workers? 


So here, I think REBNY has a point: we need to be able to innovate and upgrade. Particularly I think that is true of our commercial properties. It's hard enough with residential properties. Commercial properties should be icons of our future, not hallowed relics of our storied past.

Renovations - striking a balance

I recently had a call from an acquaintance who purchased a co-op apartment a couple years ago. This person's lifestyle had changed up a bit and he was thinking about converting his one bedroom apartment into a two bedroom by splitting the bedrooms. He had done careful planning and measuring and was able to arrange the rooms so that a window and closet would be available in each room. His question to me was: how would this affect the eventual sale price of his apartment?

The most general answer is that renovations generally affect sales prices positively, but it depends on the type of renovation and execution. Then, I ask another question. Once answered, the homeowner will have a better idea of what to do and how.

How long are you going to be living in this home?

Food for Thought: If you feel like you will be moving within the next 2-3 years or less and selling your home for any reason (need more space, plan to relocate, etc.), then any renovations you do should take into account the next owners of the space. For instance, if you divide your bedroom into two rooms, make sure that you frame the wall in a way that minimal damage is done to the underlying floor and walls. This way, the extra walls can be removed so that the next resident can choose his preferred layout.

Likewise, refrain from making statements that are too bold in kitchen and bathroom renovations. Choose neutral tile colors such as earth tones in the kitchen and clean colors such as blue or black and white in the bathroom. This will appeal to a wide range of future buyers (who won't feel like they need to gut the apartment) and will still give you a fresh new home that you can enjoy. If you feel the need for bold choices, express your style with paint colors and furniture, items that will be easy to change for the next homeowner.

If, however, you plan to live in your home for a fairly long time, feel free to make more customized renovations, choosing bold tile colors and building in customized fixtures. It is, after all, your home for the foreseeable future, and you should enjoy it to the utmost!