Latest Articles by elika

The Highest of the High-End Takes a Hit

Wed, 08 Jul 2009 19:17:07 -0500

Like the rest of the Manhattan real estate world, this column devoted significant coverage over the past couple of years to developments at the 15 Central Park West and the Plaza. The two properties were full of promise and had been selling units at a brisk pace.

It was more than just the media nexus of the New York apartment market and human beings' inherent fascination with the lifestyles of the rich and famous. In fact, it was hard not to write about the apartments. Sales from the two much sought-after buildings actually pushed the average value of New York condos up significantly.

After all, many of the sales at the two buildings took place in the last quarter of 2008. So, when many an interested reader turned to the end of the year quarterly reports to see where the New York City apartment market was headed, the top-line results were not what many feared - a significant drop-off in prices - but instead an actual increase in the average price of a New York apartment.

All thanks to the super-high end Plaza and 15 Central Park West. Oh how times have changed.

Of the two units, the Plaza has suffered the most damage. 15 Central Park West has certainly taken a hit during the recent downturn, but in general it has weathered the storm almost as well as could reasonably be expected. The Plaza, on the other hand, is an abject lesson in avoiding speculative bubbles.

The developers were racked with allegations of playing off the name and fame of the building - even leading to a lawsuit by a Russian client that directly accused them of engaging in "bait and switch" tactics.

While that suit - and the countersuit - were settled out of court, the bad publicity that stemmed from it and other complaints from some of New York's wealthiest real estate buyers led to a storm of bad media coverage.

Many that bought units while the Plaza was all the rage have sold them for sizable losses - or at least have tried. A number of stories have emerged of sellers taking hits of more $4 million or more - and that's to say nothing of the opportunity cost of all that money being tied up for so long.

It will be interesting to see the developments at the Plaza. As sellers get more desperate to unload eight digit investments gone bad, opportunities for truly incredible investment opportunities may open up.

Whither goes the Plaza goes New York? Not quite, but it's hard to see their property values moving in opposite directions for very long.

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Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst. New York City Real Estate

Source: http://www.articletrader.com

Observers Look to Downtown Manhattan to Help Fuel Real Estate Rebound

Mon, 06 Jul 2009 08:14:25 -0500

Most of the talk in New York real estate circles these days has centered on the national recession, the pain it has caused the NYC apartment market, and when it's all going to end. The recent Deutche Bank report has fueled the debate, as have recent prognostications of a global recovery – most of latter having stemmed from perpetually overly-optimistic business writers.

While the perennial debate between optimists and pessimists plays itself out in the context of shrinking real estate valuations, the form that the eventual recovery will take is becoming clear. The eventual construction resulting from the wretched attacks of September 11th with aid a revitalized downtown New York real estate market. Manhattan is typically the strongest part of the New York apartment market, and changes in commercial real estate supply and demand will, in the long run, make the downtown area even more attractive to businesses and their employees.

A planned strengthening of public transport systems will also make the downtown area a more attractive place for businesses looking to headquarter themselves in New York City or relocate from other parts of the city.

Similarly, the strengthening of residential neighborhoods near the downtown area that occurred during the previous expansion has attracted additional retail activity.

In some ways, it seems like an odd argument: In the downtown heart of business activity in the business capitol of the United States, additional business activity will help lead the Manhattan real estate market rebound more generally.

There are four major factors, though, that have pointed some observers towards such a conclusion: First, the reconstruction of areas that were damaged or destroyed during the terrorist acts of September 11th. Second, the changed market dynamics of residential neighborhoods near to the downtown area. Third, a resulting further rejuvenation of retail activity. And fourth, an uptick in supply and concordant downturn in demand for commercial real estate that, over the long run, will make the downtown an especially attractive place for new or relocating businesses.

The weak US dollar will similarly attract additional foreign demand for both the commercial and residential real estate market. A disproportionate amount of that demand may end up being concentrated in the downtown area.

It's not enough to fuel a recovery by itself – or even come close. But what is clear is that when that recovery comes, look to downtown real estate and related neighborhoods to help lead the way.

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Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst.

Source: http://www.articletrader.com

Coming Back Home

Thu, 25 Jun 2009 21:12:46 -0500

The real estate market, in comparison to most markets, moves at a glacial pace. Housing and property are, after all, two of the most illiquid assets you can buy. That illiquidity makes sense: you can never move it; for most lots it’s hard to sell just part of it and keep the rest; holding it costs money; selling it costs money.

What keeps real estate looking so attractive to so many investors, however, are the potentially huge returns. All in all, though, the transaction costs are huge in any real estate market, and that keeps the market from responding as quickly as, say, stock or bond markets.

The glacial pace at which the national market moves is reflected in the Manhattan real estate market. In fact, mainly because the New York market dodged most of the direct effects of the subprime crisis, a significant lag has developed between its price movements and other major national markets.

Like most markets, the real estate markets follow certain patterns. Economic geographic patterns of the business cycle being one of the most predictable. Usually, when the market is dragged down by macroeconomic events – like the New York apartment market was – marginal neighborhoods are hit first, then middle class ones, and then towards the end of the downturn, those luxury markets most insulated from the economic cycle take a hit.

This might be overstating the pattern a bit. All of this happens pretty quickly, but sometimes there is a lag of one or two quarters. We saw this happen with the New York apartment market, as Harlem and other neighborhoods watched property values plummet, even as new condo sales were keeping at least the average price of the luxury market afloat for some time.

Witness, though, the cold hand of time. Two major aspects of the high-end luxury New York apartment market, the Hamptons and new Manhattan condo sales, are coming back down to earth. Sales in April of new Manhattan condos fell roughly 70% from last year’s figures. This number was in part powered by developers and lenders’ unwillingness to lower their prices, relative to other sellers.

The Hamptons, the fabled summer playground of the wealthiest of New Yorkers – I’ve always preferred Martha’s Vineyard, myself – many properties are now selling for less than two thirds of their initial property values.

These markets are still stronger than many others within the larger picture of NYC real estate. The global recession, though, has finally, literally reached home – driving down the property values of those New York financiers that caused it.

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Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick
University, Oxford University and the University of Massachusetts-Amherst.

Source: http://www.articletrader.com

Real Estate Agent Anecdotes Suggest Strong Summer

Mon, 15 Sep 2008 00:00:00 -0500

There has been little doubt recently that the Manhattan real estate market has been slowing down recently. Inventory is up, and sales are down. While average prices have remained strong, it is clear that the days of the superman-like invulnerability in the market is a thing of the past.
If a year of horrid national economic news has finally proved to be the market's kryptonite, though, there has been no lack of Louis Lanes as of late, pulling our fabled hero to areas of safety and respite, to suffer little harm as the danger slowly passes.
While many in the industry were expecting a sharply negative turn this summer, many real estate agents have reported experiencing, if not a record summer, a stronger-than-expected season.
The weak dollar has greatly aided the market, as otherwise bored and possibly unemployed real estate agents in the city have found themselves with ample interest from holders of euros and the British Pound.
Indeed, the luxury market as a whole has continued to expand, even as its largest source of demand – the New York City financial industry – has taken a serious hit in the form of a global credit crunch and the closing of Bear Stearns. The dollar has played a huge role in this, as has the surprising resilience of domestic demand for New York City's apartments.
Supply, too, has helped considerably. Unlike most major American cities, which have experienced a significant condo glut, building in New York City has been significant but moderate in pace.
This fact is particularly apparent when one looks at where many of the sales have come from in recent months. While sales of units in middle-aged buildings – built after World War II, but not in the recent past – have declined significantly, many of the high profile new units have been moving at a brisk pace.
The Superior Ink units close to the water are perhaps a prime example. The sales numbers from this large collection of new luxury apartments has displayed the strength of both the super-high end luxury market and the market for new condominiums.
The super-high end has been particularly strong as of late. Indeed, Superior Ink was supposed to be 68 different units, but may end up being just shy of fifty units, after wealthy buyers combine units.
The city is also leading the way with a number of luxury green apartments near completion; a set of buildings that will experience their own unique source of demand from buyers, and should help prop up future numbers somewhat.

While no one is saying the city's market is experiencing its best days, there is a consensus that if this is the worst there is, then the market will experience a recovery from the recent negativity with perhaps record speed.
Original Post at Elika Blog

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Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst. New York City Apartments

Source: http://www.articletrader.com

Super-Luxury New York Apartment Sales Set New Record

Mon, 09 Jun 2008 00:00:00 -0500

With the peak of the Manhattan Real Estate market looking like it has passed for the near term, many observers are waiting to see when the drop in the market's value will begin and how far down it will go.
Those assuming the same will happen with the luxury market, however, are beginning to wonder if the old axiom about assumptions might start to apply to them. The number of super-luxury apartments – those with a cost greater than $4 million – sold in the month of May hit a new all-time monthly record of 52 units.
Indeed, though the luxury market has led the way, the Manhattan market in general is faring relatively well. Even excluding some of the priciest closings on the island that took place at 15 Central Park West, the average price for an apartment has risen to $1.54 million.
There was a widespread agreement among high-end brokers that demand for trophy apartments had hit a new high. The economics of it is simple: Those that are looking to purchase a home for more than $4 million have far more in the way of liquid assets than the value of their homes. So much so, in fact, that their purchasing decisions are as immune to the business cycle as any segment of the larger economy.
Indeed, especially with the low dollar stimulating foreign demand, the luxury New York apartment market may more sheltered from the larger macroeconomic situation as any major market in the country.
That being said, some of the more prominent condos in the city have recently cut their prices. The lay offs at Bear Stearns and other financial firms may have been a factor. At the Time Warner building overlooking central park, sixteen units have seen their prices reduced recently, three of them in the last week, and two of those by more than a million dollars.
It's easy to read too much into recent moves at properties like Time Warner, however. Since the overall economic situation effects the luxury New York apartment market far less than most real estate markets, the importance of quality is considerably more important. Some buildings simply do not live up to their hype, and after the initial luster wears off, landlords find few people who will actually spend millions on an apartment where small details are not as perfect as they should be for that price.

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Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst. Manhattan Real Estate

Source: http://www.articletrader.com

Importance of Negotiation Tactics Rise as Uncertainty Increases

Mon, 09 Jun 2008 00:00:00 -0500

The major Manhattan real estate firm, Brown, Harris and Stevens reports that the number of new contracts during the first quarter has decreased by 21% from the same quarter in 2007.

While the volume of demand is down sharply in most places, it has showed particular strength in the luxury market, which continues to benefit from high foreign demand resulting from the weak dollar. On Friday, the Dow Jones Industrial Average fell over 300 points as oil saw its largest one-day increase in history, and unemployment numbers saw their largest uptick in over a decade. This will surely lead to further weakness in the dollar, which in turn will continue to benefit the New York luxury real estate market.

One major variable that remains to be seen is if Wall Street financial firms will continue to cut their employment levels significantly. Over 7,000 analysts at Bear Stearns lost their jobs during the takeover by JP Morgan. Lehman Brothers has also clayed off a large number of workers. Similarly, Citigroup has announced a major set of layoffs to take place over the coming months.

Furthermore, bonuses are expected to be significantly smaller this year, at least for the bulk of the analysts and other mid-to-high range employees that make up a large swath of potential demand for luxury apartments in the New York City real estate market.

That being said, it seems that the worst of the subprime crisis is over, at least for Wall Street banks and financial institutions. Further bad news for these firms is not assured, and this has left the market with a great deal of uncertainty.

Exploiting this uncertainty may be a good move for buyers and renters, who have greater leverage to negotiate now than at any time in the past decade or so. Landlords and coop boards are beginning to feel ill at ease about the long term fate of the market, and thus are far more willing to compromise than they were even just six months ago.

As the importance of negotiation increases, using a buyer's broker becomes even more important.

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Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst. Manhattan real estate

Source: http://www.articletrader.com

Importance of Negotiation Tactics Rise as Uncertainty Increases

Mon, 09 Jun 2008 00:00:00 -0500

With the volume of deals decreasing at a significant pace, a new set of questions are being asked about the Manhattan real estate market. Most of them have to do with the general point of curiosity that has got everyone's mind in a fix: Will the slowdown in the national housing market reach its way into Manhattan, which has been something of a fortress of good news for the real estate market over the past several years.
The major Manhattan real estate firm, Brown, Harris and Stevens reports that the number of new contracts during the first quarter has decreased by 21% from the same quarter in 2007.
While the volume of demand is down sharply in most places, it has showed particular strength in the luxury market, which continues to benefit from high foreign demand resulting from the weak dollar. On Friday, the Dow Jones Industrial Average fell over 300 points as oil saw its largest one-day increase in history, and unemployment numbers saw their largest uptick in over a decade. This will surely lead to further weakness in the dollar, which in turn will continue to benefit the New York luxury real estate market.
One major variable that remains to be seen is if Wall Street financial firms will continue to cut their employment levels significantly. Over 7,000 analysts at Bear Stearns lost their jobs during the takeover by JP Morgan. Lehman Brothers has also clayed off a large number of workers. Similarly, Citigroup has announced a major set of layoffs to take place over the coming months.
Furthermore, bonuses are expected to be significantly smaller this year, at least for the bulk of the analysts and other mid-to-high range employees that make up a large swath of potential demand for luxury apartments in the New York City real estate market.
That being said, it seems that the worst of the subprime crisis is over, at least for Wall Street banks and financial institutions. Further bad news for these firms is not assured, and this has left the market with a great deal of uncertainty.
Exploiting this uncertainty may be a good move for buyers and renters, who have greater leverage to negotiate now than at any time in the past decade or so. Landlords and coop boards are beginning to feel ill at ease about the long term fate of the market, and thus are far more willing to compromise than they were even just six months ago.
As the importance of negotiation increases, using a buyer's broker becomes even more important.

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Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst. Manhattan real estate

Source: http://www.articletrader.com

New York City Real Estate Market holding steady?

Thu, 05 Jun 2008 00:00:00 -0500

While many predicted the first quarter of 2008 would finally show the New York City real estate market's connection to the ailing national market, the city's real estate actually dramatically increased in value during that time. Manhattan led the way for the rest of New York City, which increased its value by an estimated 28%.
The luxury market played a large role in increasing the value of the real estate market as a whole, with a number of different high-end condos coming onto the market during that time. The sales from those apartments have continued to aide the market, even as the national business media focuses on the ailing national economy.
The lesson from the first quarter of the year is an important one: Events not connected to the business cycle – in this case, a number of luxury condominiums coming onto the market when worries about a recession began to amount – such events can prop up markets during pivotal moments, leading to a disproportionate impact on the market as a whole.
It is possible that similarly unexpected positive news could aide the market in the second quarter. The month of April, at least, showed some some signs of healthy activity. The number of sales of existing single family homes increased to 5,838 from 5,035 in March. That accounts for a month-to-month an increase of roughly 14%.
While such upticks are generally expected for this time of year – spring tends to be one of the real estate market's most strongest seasons – the size of the increase is unexpected. It is particularly important because sales volume has been an area of concern since the first quarter numbers showed a decline in year-over-year sales volume of 22%.
The rest of New York state also faired relatively well: Two-thirds of the state's counties reported increases in sales volume during the past month.
Nationally, mortgage rates are once again beginning to near forty year lows in the wake of the fed's recent aggressive rate cuts.
While there is still ample concern over the future of the national market, it is doubtful that the New York apartment market – insulated by its coops from the direct impact of the subprime crisis – will share the fate that markets like Cincinnati, Cleveland and other Midwestern cities.
A recent survey has put the average length of owning home at seven years. Despite the current troubles in the market, it is almost certain that significant growth will be achieved over that time frame.

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Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst. New York apartment

Source: http://www.articletrader.com

New York City Real Estate Market Starts the Second Quarter off with a Solid Month

Tue, 27 May 2008 00:00:00 -0500

Despite the predictions of many, Manhattan real estate increased in value dramatically during the first quarter of 2008. Led by the luxury market's huge increase in value, Manhattan led the way for the rest of New York City, which increased its value by an estimated 28%.

A number of important new Manhattan condo developments came onto the market during the first quarter of the year, and their sales have continued to power the market, even as the national business media focuses on the poor state of the national economy.

Indeed, the lesson of the first quarter is an important one: Events not closely tied to the business cycle - in this case, a number of luxury condominiums coming onto the market when worries about a recession began to amount - these events can prop up markets at crucial times, leading to a disproportionately positive impact on the market as a whole.

Some observers have been holding out hope for a similar set of unexpected positive news for the second quarter. The month of April, at least, showed some of those positive signs. The number of sales of existing single family homes increased to 5,838 from 5,035 in March. That's an increase of roughly 14%.

While increases are typically expected for this time of year - spring tends to be one of the Manhattan real estate market's most strongest seasons - the size of the increase is unexpected. It is particularly important because sales volume has been an area of concern since the first quarter numbers showed a decline in year-over-year sales volume of 22%.

The rest of New York state also faired relatively well: Two-thirds of the state's counties reported increases in sales volume during the past month.

Nationally, mortgage rates are once again beginning to near forty year lows in the wake of the fed's recent aggressive rate cuts.

While there is still ample concern over the future of the national market, it is doubtful that the New York market - insulated by its coops from the direct impact of the subprime crisis - will share the fate that markets like Cincinnati, Cleveland and other Midwestern cities.

A recent survey has put the average length of owning home at seven years. Despite the current troubles in the market, it is almost certain that significant growth will be achieved over that time frame.

Cometh the Manhattan Buyers Market

Wed, 14 May 2008 00:00:00 -0500

Perhaps because everyone in the industry has been waiting for New York City's real estate market to begin looking a bit more like the rest of the country's, the media's coverage of the last quarter's surprisingly strong numbers were almost celebratory.
That doesn't mean that the numbers were strong. Just because the numbers were a whole lot better than expected doesn't mean they were good, per ce. Average prices actually rose on Manhattan, and the rest of the city didn't seem to be doing terribly. With Spring typically being a strong quarter, some analysts have been holding out hope for another quarter of unexpectedly strong performance by the New York apartment market.
The numbers, however, just don't add up... the first quarter numbers are a bit like Hillary crushing Obama 2-1 in West Virginia... It helps, but the race is already over. Similarly, the Manhattan apartment market has been doing truly incredible in comparison to the national market, but the bottom line is that the country is now in a recession, and the math just isn't there.

Inventory has been increasing through many parts of the city, though not all. Condo sales are indeed slow. It seems like the market is in a bit of a holding pattern as prices begin to come down in many of the city's largest neighborhoods. Areas like Chelsea, that saw major developments come on line at inopportune times for the developers have seen large increases in their inventory numbers.
This is, though, New York City. That the numbers aren't as strong as they have been doesn't mean there are harbingers of doom. Just the opposite for buyers, actually. It means prices for many New York City apartments are actually coming down to earth. After an incredibly strong seller's market, and then a lengthy period of detente between buyers and sellers where each side of the equation held about the same amount of bargaining chips, finally... finally a buyers market is coming.
A number of buyers have been waiting for just such a time, and in the coming months, it will finally arrive, if it's not here already. The strongest parts of the market will not see much of a decline in prices, but, at the least, the negotiations with sellers will be easier than they were just six months ago.

There are signs that owners are starting to adjust their prices in many areas and market sectors. Perhaps most strikingly, over-priced apartments are receiving more and more extremely low ball offers, which should eventually move landlords to lower prices. Accurately-priced, high quality homes are still moving with at a brisk pace.
However, the market is beginning to function again like a market should – overpriced apartments or homes of more marginal quality are beginning to feel downward pressure on their prices.
As that pressure grows stronger, truly good deals are becoming easier to find.

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Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst.New York City apartments

Source: http://www.articletrader.com