The Big Apple: Will there be too FEW condos? More!

WITH NEW CONSTRUCTION AT ITS NADIR, LOOK FOR HIGHER CONDO PRICES BY 2012

As the market plods along in a slow but steady recovery, brokers and developers are saying the city will soon face a shortage of new development projects.

Last year, through November, the city issued permits for only 10 new residential buildings, for a total of 505 new units. That’s 95 percent fewer apartments, either condo or rental, than for the same period in 2008, when permits were filed for 9,448 units in 147 buildings, according to census data. (The number of units had dropped to 1,203 in 31 buildings in 2009.)

Starting in 2012, after most or all the new projects that were stalled or delayed have finally sold out, the supply of new apartments will take a decided dip, and prices for all apartments could start to rise significantly again.

“Once we work through the existing inventory and there’s nothing new coming on line,” President Kelly Mack of the Corcoran Sunshine Marketing Group told the New York Times, “there’s going to be a major shift in the market. Prices may start going up significantly in 2012 in anticipation of the shift in inventory.”

THAT OTHER INEVITABLE FACT OF LIFE IS GOING UP

Co-op and condo owners

The Big Apple: Luxury sales skew market. More!

LUXURY SALES COLOR THE HOUSING MARKET, WHICH IS MOVING ‘SIDEWAYS’ AND PROMPTING CAUTIOUSLY OPTIMISTIC FORECASTS

Sales activity in the second half–as measured by number of sales, median sale prices, average number of days on market and the number of Manhattan apartments on the market–settled comfortably into historic 10-year ranges, according to two separate market reports in Crain’s New York.

(via Prudential Douglas Elliman)

Despite a busy market for trophy properties, the pace of sales and median prices of Manhattan apartments slipped during the fourth quarter, the Wall Street Journal observed.

The number of sales fell by

Weekly roundup of news you don’t want to miss

Here’s your chance to catch up with news included to inform, enlighten and perhaps even entertain you. To read about The Big Apple, check out another of today’s three posts.

HE SCORES BIG AND HIGH IN HARLEM

SELF-STYLED OLD AND CRANKY FASHIONISTA LISTS

The Big Apple: Q3 reports suggest stabilization

PRICES ARE UP AND SALES ACTIVITY IS DOWN IN THIRD QUARTER

After two years of unpredictable sales trends, the Manhattan real estate market seems to have settled into a more typical and seasonal pattern, with prices rising slightly and sales volume dipping in the recent summer months, according to third-quarter market reports, says the New York Times.

Prices increased for the fifth straight quarter, with the average sales price hovering around $1.43 million and the median price around $910,000, according to data provided by the city’s four largest brokerage firms. But prices are still well below the market’s height a couple of years ago, when the average was higher than $1.7 million and the median was close to $1 million.

Inventory has declined, reports the Real Deal, and the Wall Street Journal says Manhattan is a star in the apartment market.

But my post (below) on Wednesday questions whether September has evolved into a healthier market.

FIVE NEW YORK NEIGHBORHOODS ARE AMONG NATION’S MOST COSTLY

The West Village’s 10014

Don’t laugh, but REBNY’s ‘survey’ is a joke

The Real Estate Board of New York (REBNY) released its latest survey results today, unwittingly providing insight into why they don’t merit your attention.

As a member, I’m sure I got an e-mail asking for my participation.  I may even have responded, though I don’t recall.  But any survey that depends on self-selected responses is not worth the bytes it consumes.

What was the methodology?  I have no idea.  What I do know from today’s press release is only this:

The Broker Survey is conducted quarterly and was sent to REBNY Residential Division members in July after the close of the second quarter.

The release begins with the insupportable conclusion

Condo prices in May suggest ‘moribund’ market

Data analysis firm Radar Logic says in its newest RPX report that Manhattan condo prices were 6.7 percent higher in May than one year earlier but 16 percent lower than the peak in late 2008.

Referring to a gradual upward trend, the company said month-to-month growth in condo prices in was “de minimis,” suggesting “a relatively moribund Manhattan condo market at a time of year when prices typically rise.”

In May 2009, Manhattan condominium sales dropped to their lowest rate since the beginning of Radar Logic’s 10-year data history. Since then, the RPX Manhattan Condominium Transaction Count has doubled while remaining below its 10-year average.  The firm declared:

Rent declines in 2009 were slow but steady

Manhattan’s rental market opened 2009 with a continuation of the downward trends that began in the fall of 2008, reports the Real Estate Group of New York, which noted that landlords quickly saw that incentives were needed to decrease inventories.

“Manhattan rapidly became a no fee market.”

The chart below (which, I’m sorry to say, is hard to read), summarizes the report:

Apartment vacancies rise, rents fall over a year

Asking rents for units in doorman buildings in Manhattan this month are down 5.79% compared with December 2008, according to the Real Estate Group of New York. But rents in non-doorman units are off just 1.74%.

From November to December, rents for doorman units slipped 1.19%, yet non-doorman units rose 0.87%.

Manhattan rents were generally flat in October

Rents, which generally decrease in the fall, were relatively flat this month, but the Real Estate Group of New York reports that prospective tenants seemed to be pushing up prices in trendy neighborhoods such as SoHo and TriBeCa.

On average, Manhattan rents were off approximately a half percent from September, and supply was rising again.  Inventory in Manhattan went up 1.72 percent, posting the first significant increase in vacancies in six months.  The biggest month-to-month change was in doorman studio units, which increased 2.09 percent.   (You’ll find much more on the Manhattan housing market in my free bi-weekly e-newsletter.)

The charts above are taken from the Real Estate Group's report.

Inventories are back on the rise.

Court hands Stuyvesant Town owners huge defeat

The Court of Appeals dealt a financial blow this morning to the already beleaguered owners of the sprawling Stuyvesant Town and Peter Cooper Village complexes in Manhattan when it ruled that they improperly began charging market rents on thousands of apartments, the New York Times reports.

The ruling by the state’s highest court may mean that the current owner, a partnership of Tishman Speyer Properties and BlackRock Realty, and the former owner, Metropolitan Life, may have to pay an estimated $200 million in rent overcharges and damages to tenants of some 4,000 apartments.

The court, in a majority ruling (two of the six judges dissented), said the owners improperly raised rents beyond certain set levels at the complexes while receiving tax breaks from the city for major renovations.

The decision could also affect landlords of as many as 80,000 apartments across the city who also may have improperly raised rents and deregulated apartments while receiving special tax breaks.

Tishman Speyer Properties and BlackRock, which purchased the properties in 2006 for a record-breaking $5.4 billion, are already under enormous financial pressure. The partnership is running out of cash to pay building loans and could default within the next several months.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
http://www.ServiceYouCanTrust.com