A heated bipartisan debate began earlier this month in the House and Senate over proposed changes to the Federal tax code. While it’s too soon to predict exactly how a revised structure will play out, tax incentives for homeownership are in jeopardy. How will reducing and maybe even eliminating tax benefits for owning a home affect our housing market?
Numbers tell only part of the story. At the end of each quarter, we’re showered with statistical reports that require us to consider the macro and the micro of our market. Yet each neighborhood and even each building has its own contextual history. To best serve buyers and sellers, agents need to dig deeply into quarterly reports and then plough even deeper into individual comps, examining both sold and current properties to scrutinize every factor that influences a sale including condition, staging, monthly carrying charges, price drops, time on the market and extenuating circumstances.
According to nyc.gov, Bedford-Stuyvesant measures 2.782 square miles and has a population of 154,332: 64% black, 20% Hispanic, 11% white, 5% other. Occupying north central Brooklyn with Crown Heights to the north, Clinton Hill to the east, Williamsburg to the south and Bushwick to the west, Bed-Stuy is a small fraction of its parent Brooklyn borough which totals 71 square miles and 2,629,150 residents. Its housing stock, dominated by an estimated 6,000 3-4 story townhouses that date mostly from the late 19th century, is increasingly attracting more and more homebuyers who feel priced out of the other residential markets as well as U.S. and foreign investors looking for steady return and appreciation.
Buying a home for the first time in New York City, one of the nation’s most complex and competitive real estate markets, can be a daunting and overwhelming experience. But it doesn't have to be. Real estate novices are advised to collaborate with an experienced professional who will narrow the multitude of choices, minimize the stresses and streamline the process from start to closing.
With the click of a mouse, homeowners today can obtain instant quotes on the value of their most significant asset: their homes. Banks, insurance companies, real estate brokerages and even media companies offer computer generated property valuations using formulaic software based on publicly available metrics such as square footage, number of rooms, bedrooms, bathrooms and recorded neighborhood sales. These computer-generated estimates, however, lack elementary inspections, critical market perspective and professional intuition, so they fall grossly short of the mark
As the number of condominium products grows, there’s mounting pressure among condo boards to operate their buildings efficiently and to maintain the character of their residences in the best interests of unit owners. Increasingly condos are trying to exert more control over resales, imposing conditions for granting waivers and even implementing new policies—behaving very much like their co-op cousins.
I had something to say when StreetEasy launched Premier Agent six weeks ago on March 1st 2017 (see “Doing Battle With a $600M Gorilla”). As a lead generation advertising product for real estate agents, the program is a major profit center for Zillow, the parent company, and generated more than $604M in revenue last year nationwide. In New York, the platform was justified as a new way for consumers to reach buyers’ agents. In reality, the program has been confusing consumers and misleading them for these last six weeks. When buyers click the CONTACT AGENT box, believing they will be directed to the seller’s agent, they instead wind up in the inbox of an agent who has paid for the lead in a particular zip code.
Can you fight City Hall? Can you wrestle with an acknowledged power that has overtaken consumers? How significant are individual voices of censure?
Last week I cancelled my PRO account at StreetEasy and posted on social media my hope that all self-respecting agents with integrity do the same. I wrote, “We should not support misleading advertising which only confuses consumers.” The post attracted 60 likes, 15 comments and 1 share. Not a storm of response but a sentiment supported publically by the heads of Compass, Corcoran, CitiHabitats and Town Residential who each announced to their agents that they would not reimburse participants in StreetEasy’s newest Premier Agent advertising program which was introduced to New Yorkers on March 1st.
One of the city’s oldest neighborhoods, the Lower East Side is in the midst of a transformative gentrification. From its former identify as a low income immigrant neighborhood of largely Irish, Italian, Jewish and recently Dominican descent, new demographics are emerging as the landscape changes from overcrowded tenements to a mixed residential landscape of rent regulated and market rate apartments alongside rising new luxury condominium developments. Against a gritty backdrop of graffiti, after hour’s bars, and pawn shops, amid a counterculture of artists and musicians, there co-exists an expanding culture of contemporary art galleries, hip performance spaces, music venues, trendy boutiques and culinary destinations. At the same time, a new evolving housing stock with high end finishes and escalating square foot prices to match, is appealing to upscale purchasers including young families and empty nesters from the surrounding suburbs of Westchester, Long Island and New Jersey.
For Manhattan residential real estate, how different will 2017 be from 2016? Last year the market was in transition as the pendulum swung away from sellers to favor buyers (especially for properties priced above $4M) and shifted even more to a preference for condos over co-ops, also continuing to highlight downtown as Manhattan’s hottest neighborhoods.
While the law is exacting and black and white, ethical dilemmas operate in the grey areas between right and wrong when there is a conflict of interest or a dilemma between values. As licensees of the state, we operate within the law; however, compliance is not the same as behaving ethically or doing the right thing. In fact there are numerous instances when the law is silent or permits what some might consider questionable.
The single most significant factor that has affected NYC’s residential marketplace, even more than interest rates which have hovered at historic lows for the better part of eight years, is the explosion of condominium choices including ground up construction and prewar rental conversions. New developments have reshaped the face of New York’s housing supply.
Called a “city within a city” by some and “the new heart of New York” by promoters, The Hudson Rail Yards Project will transform the far west side of Manhattan. Being built from the ground up by developers Related Companies and Oxford Properties Group of Canada over active rail yards they leased from the MTA, it will bring new choices to New Yorkers and global citizens for housing, commerce and culture.
August 4, 2016. We’re past the year’s halfway mark and well into the 3rd quarter of a year in transition. For most of 2016, buyers gained the negotiating edge, but while prices are holding, transaction volume and velocity are down. Interest rates have hovered at historic lows for the better part of 8 years, and as of this writing, we’re at an all time average low of 3.44% on a 30-year fixed product. Rates are expected to inch up nominally in December after the US presidential election, though the change, at least initially, is unlikely to make much of a difference in residential real estate.
I’ve been selling residential real estate for 35 years, and for the first time I hosted a business talk last week in my Living Room with a guest banker and an attorney. I had a script and an agenda, but we were an intimate group, and the setting was informal, so as I touched on the stats that impact the market, I encouraged Q & A from the buyers and sellers who had gathered. To set the stage for discussing whether now is the time to buy or sell, I offered an overview of current inventory, identified 3 distinct market segments, highlighted the rise of the condo product, and considered absorption rates.
IS NOW THE TIME TO BUY OR SELL?
Shirley Hackel, a 35 year real estate professional, invites you and a friend to her Living Room for cocktails and an intimate and informative discussion about Manhattan's changing real estate market.
June 15th, 7-9 PM
with Guest Experts Mark Wenitzky, VP Home Loans, Bank of America and Craig L. Price, Esq. Partner, Belkin Burden et al
I WOULD LIKE TO ATTEND
No matter where we are in the cycle of real estate’s ups and downs, it’s appropriate to consider where we’ve been, evaluate where we are and think about where we are going. This year nearly every industry event I attended focused on the market’s upper end, a subject that has captured the most press recently. Last week’s Annual NYC Real Estate Showcase + Forum hosted by The Real Deal opened with the question “What’s Ahead For Luxury?”
Manhattan’s residential real estate market has always been fluid, but increasingly it is becoming more multi-layered and segmented, with different price points moving in different directions. In the light of Q1 2016 stats which show average residential prices exceeding the $2M mark for the first time, it’s instructive to take a close look at inventory numbers and pending sales to see how they break out according to co-op versus condo purchases by price. Two important caveats are noteworthy when reviewing 2016 sales figures: for one thing, these averages are skewed by closings at high end new developments such as 432 Park Avenue and 150 Charles Street; secondly while sales records are an important part of history, it’s contracts signed that more accurately reflect the market moment since the closings for most new developments can follow contracts signed by as many as two years ago.
Is it legal for an attorney to send out multiple contracts on the same property simultaneously? The answer is yes. Is it ethical? The answer depends on whether there’s full disclosure. In the same vein, is it lawful and ethical for an agent to represent more than one buyer in negotiations on the same property? Both queries are thorny and merit serious consideration.
The more things change, the more they remain the same. Ten years ago, I concluded in a column, “Some sellers get no respect.” Homeowners who set unrealistic values on their homes—who fail to heed conservative pricing advice from experienced agents—lose valuable time and ultimately money. That message is worth repeating, particularly in today’s climate where price drops abound and where activity has slowed.