The Buyer's Guide to Preparing a Board Package

When purchasing a co-op apartment, you will be required to complete a purchase application and assembling a board package—a comprehensive presentation of financial documents and references. The main purpose of the board package is to guarantee the corporation of your financial ability to support the apartment and to give them confidence that you will be a “cooperative” shareholder and welcomed member of their community.

Each co-op has its own set of requirements and application forms, which Alfred Real Estate will obtain for you from the managing agent of the building. The package will most likely consist of:
Purchase Application: This should be typed. Fill in all blanks and answer all questions (fill in “not applicable” when necessary).

Credit Release Form: This allows the managing agent to obtain a credit check for each applicant.

Financial Statement: This is a statement of all assets and liabilities and supporting documents. The sums on the statement must reconcile with the attached supporting documents. Every item on the statement (except personal property) must be documented. Don't forget to add earnest money (deposit on contract) in the asset column.

Reference Letters: You will be asked to provide a combination of personal and business reference letters. It is through these letters that the board will attempt to get to know you. Have your friends and associates write positive things about you-but also include some basics: How long have they known you? How did you meet? Why do they think you will make a great addition to the community? If they live in a co-op or have served on the board at their building, it is a good thing to mention. Letters should be addressed to the Board of Directors, on letterhead and with their contact information.

Tax Returns: Most co-ops require two years' worth of tax returns including all schedules and W-2 forms.

Landlord Reference: This verifies your prompt payment of rental or maintenance charges.

Bank Reference Letter: Just ask a banker at your local branch. They do this all the time and will know what you are talking about.

After you've gathered together all your documents, your agent at Alfred will have them copied and submitted to the managing agent for you. As a rule, if you are applying for a mortgage, managing agents do not accept any papers without a written commitment letter from the bank.

Don't Ditch Your Broker

In today’s market, some buyers have been ditching their brokers with the hope of striking a better deal by cutting out their agent’s commission. Don’t be fooled by what may seem to be an easy way to make a buck—this underhanded move will most likely cost you.
Some buyers also believe that the seller will give them a discount if they don't use a buyers' broker, since that means paying one commission, not two.

"People think they're going to get a better deal if they don't use a buyers' broker," said Kate Meckler, a senior vice president at Sotheby's International Realty, noting that buyers seem more concerned with that than usual in a climate where they are "thinking out every dollar and where it's going in the deal."

In reality, the commission for both the seller’s broker and the buyer’s broker is determined in advance, and the seller generally pays the same percentage regardless of whether it is split between two brokers.

Although there are some cases where the listing agent agrees to take a slightly smaller commission to help a deal go through, buyers' brokers are often more effective at negotiating the best possible price for a client, Meckler said. And new developments are especially keen to work with buyers' brokers in the current climate, where they get less walk-in traffic, since buyers' brokers bring in potential purchasers.

So stick with Alfred. Alfred has exclusive luxury properties and staff whose mission it is to find the top properties that exceed our clients' expectations. Our brokers are NYC Manhattan real estate experts. Whether you are searching for furnished apartments, condos, co-ops, lofts, townhouses, brownstones, luxury living, new flats or developments, we have professionals available to meet your housing needs. Our agents are very accommodating and offer service in English, Spanish, and Portuguese. We will keep you up to date on co-op and condo apartments in Manhattan and recommend the best course of action for your New York City Real Estate.

Congress approves first-time homebuyer tax credit extension

Good news for people who want to buy a home but just can't close prior to December 1, 2009. Congress has extended the first time home buyer tax credit into April 2010. Obama is expected to sign the bill into law today.

The first time home buyer tax credit extension allows a buyer to enter an agreement with a seller by April 30, 2010 and close on the house by the end of June 30, 2010. First time home buyers are defined as anyone who has not owned a home for the past 3 years. First time home buyers will get an $8,000 tax credit, similar to the tax credit for much of 2009. Other home buyers, who have owned their current home for at least five years, are eligible for a $6,500 tax credit.

Income limitations have been increased to $125,000 for single filers and $225,000 for joint filers. The purchase price of the home must be less than $800,000. The estimated loss in tax revenue to the government comes to $10.8 billion.

“The substantial rise in home sales we’ve seen over the past few months proves that the tax credit is working and is being used by buyers who were waiting for the right opportunity to get into the market,” said NAR President Charles McMillan. “This important incentive is helping to stabilize the housing market, stimulate the economy and create new jobs in communities all across our great nation. Extending and expanding the home buyer tax credit will enable even more families to take advantage of current low interest rates and affordable prices to invest in their future through homeownership.”

Take advantage of the tax credit today. Contact Alfred Real Estate today view furnished apartments, condos, co-ops, lofts, townhouses, brownstones, luxury living, new flats or developments. Our agents are very accommodating and offer service in English, Spanish, and Portuguese.

Yankees Win 27th World Series Championship

The Yankees captured their first title since 2000, humbling the defending champion Philadelphia Phillies on Wednesday, 7-3, in Game 6 of the World Series at Yankee Stadium.

For the past eight seasons the Yankees have led the way in payroll and in many major victories. They have also built a new stadium—and now they have christened it with their first World Series championship in nine years.

The Yankees will celebrate their World Series title with a "ticker tape" parade up the Canyon of Heroes on Friday.

Derek Jeter, A-Rod and the rest of the Bronx Bombers will be celebrating in grand fashion amongst confetti and congratulatory cheers on lower Broadway from the Battery to City Hall starting at 11 a.m.

"Congratulations to all the Yankees for bringing the world championship back home to New York City, where it belongs," said Bloomberg, who revealed the parade plans after the Yanks' stunning victory last night. He will present the keys to the city to the champs at a City Hall ceremony right after the triumphant march.

While anyone can line the route, a limited number of tickets to the City Hall celebration will be available, the mayor's office said. Information on how tickets will be distributed will be available today.

NY Real Estate

Time to Invest in Manhattan Real Estate!

This may surprise you: Manhattan residential real estate has performed better than the broader U.S. real estate market and comparable major cities such as San Francisco and Los Angeles.

For potential buyers, now is the time to shop. The Dow is at 10,000 without justifying fundamentals, unemployment is at 10%, and the dollar is weak and inflation is coming. Relative to the stock market and comparable major cities, Manhattan has performed well.

Cities like Los Angeles and San Francisco have seen their real estate prices decline more than 40% from their bubble highs while prices in Manhattan have taken a significantly smaller hit.
The Manhattan market is showing signs that it is starting to find its bottom. Third-quarter 2009 data show prices declined at a lower rate while transaction volume surged 46%. Experts predict that it will decline another 10% with an eventual U-shaped recovery. However, the duration and the magnitude of the decline have been less than for comparable major cities.

According to The Wall Street Journal, Wall Street firms are expected to pay a record $140 billion in bonuses this year because of the resurgent stock market, an easing in credit markets, an increase in deal-making and government programs. This is despite the recession and despite an unemployment rate of 10.3% in New York City. These bonuses may be undeserved, but regardless, their payday will boost Manhattan real estate prices.

Manhattan is a landlocked island. While developers in most cities keep expanding outward, developers in Manhattan do not have this alternative.

Manhattan is a global must-see destination. Emerging markets like Brazil and China are creating wealth at a very high rate and churning out millionaires and Manhattan is often the first international destination they want to visit. It's also one of the first places where they want to buy investment property.

Manhattan is full of diverse industries. Besides finance, New York has media, hospitality, advertising and professional services like law and accounting firms. These industries will be serving emerging-market economies and will benefit the local New York economy in terms of job creation and housing demand.

The city's unemployment rate was at 10.3% in August. If not for the diversity of the current New York City economy, the unemployment rate would be even higher. While the finance industry lost jobs, sectors like education, health, leisure and hospitality gained jobs.

Manhattan provides top quality of life. The air in Manhattan is pristine compared to air in other global metropolises like Hong Kong. Transportation, although via a 100-year-old subway system, is still efficient and dramatically reduces commuting time for those living in Manhattan. The legal system is established and there is a better work-life balance compared with countries like China. These are major considerations for attracting global talent.

It's time to invest. Manhattan residential real estate has a net rental yield of 4% and still benefits from rental income and price increases. Real estate prices and rental income will increase with inflation.

For the primary residence buyer who is still renting, the value of your saved dollars is getting weaker. The Dollar Index is now at 75, down from 88 in March, reflecting the world's pessimism about our currency. Rents will increase. So start shopping for real estate. It's better than sitting on a pile of cash with weakening buying power.

Mortgage Rates Holding Steady

According to a Freddie Mac weekly survey, mortgage rates remained fairly steady for the week ending October 29, with the 30-year fixed-rate mortgage coming in at an average of 5.03 percent—up only slight from last weeks 5 percent average. Last year at this time, the 30-year averaged 6.46 percent.

Over the past 10 months, the 30-year rate average has been at its lowest levels in the 38-year-old survey's history. The 15-year fixed-rate mortgage average was 4.46—a small increase. The five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.42 and one-year ARMs averaged 4.57 percent, up from 4.40 and 4.54 percent, respectively, for the week earlier. The five-year ARM was at 6.36 percent and the one-year ARM was at 5.38 percent during the same period last year.

Government stimulus efforts, including up to $1.45 trillion of mortgage-related debt purchases by the Federal Reserve — the U.S. central bank, have reduced and held down borrowing costs to bolster the housing market and the economy.

However, demand for mortgages slid last week for the third straight week, with home purchase applications the weakest since mid-May and refinancing requests at a two-month low.
Congress is currently debating a possible extension of the tax credit to keep adding fuel to the fragile housing market.

The National Association for Realtors reported a 9.4 percent jump in existing home sales for September and said last week that first-time buyers accounted for more than 45 percent of sales during the past year.

Surprisingly, however, the Commerce Department reported that new home sales experienced a 3.6 percent drop last month after rising the five prior months.

Manhattan Real Estate

Market Reports Show Good News for Potential Renters

According to third quarter market reports released earlier this month, those looking to rent in Manhattan still have the upper hand. Rents in Manhattan remain low and flat this winter, except in trendier areas like SoHo and TriBeCa. Vacancies in Manhattan rose 1.72 percent this month, the most sizable increase in six months. Inventory is also up—giving potential renters their choice of prime Manhattan apartments in desirable neighborhoods.





Tips for Renters

• A walk in the park. Gramercy Park non–doorman two–bedroom units have hit their lowest price points this month. These units fell 5.31% to $3,416. And while many of these do not come with a key to the park, they do come complete with easy access to virtually all of Manhattan’s other neighborhoods.
• Hang out on the hill. Non–doorman and doorman studio units in Murray Hill are both reporting their lowest price points in months. Non–doorman units fell 2.35% this month to $1,775, while doorman units fell 2.84% to $2,112. So whether you’re a new hire looking for your first apartment in Manhattan or a long–time resident looking for a fresh start, there has never been a better time to check out Murray Hill.
• Head to Harlem. Harlem is known for great deals, but the already low priced non–doorman two–bedrooms have dropped further this month to their all time low of $2,032.
  

NEWS UPDATE: National Home Sales Rebound to Highest Level Since July 2007

The dollar is low, prices are low, and mortgage rates are low. For Americans, but even more so for foreign investors, now is the time to purchase Manhattan real estate.


According to a report released Friday, sales of existing homes rebounded sharply in September to their highest level in two years, in part due to a strong boost from first-time homebuyers.

Sales of previously-owned homes jumped 9.4% in September after falling for the first time in four months in August, said the National Association of Realtors. Information from a NAR report to be released next month suggests first-time homebuyers accounted for more than 45% of home sales in the past year.

"Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home," said Lawrence Yun, NAR chief economist.

Yun said the market is still underperforming as the prices of homes continue to fall.

The $8,000 tax credit that has helped first-time home buyers take advantage of the most affordable conditions since 1970, but the looming expiration date of the incentive could hold buyers back from entering the market, said NAR president and real estate broker Charles McMillan.

To help boost home prices and sales, lawmakers are considering extending the tax credit and expanding it to all but the wealthiest homebuyers.

While keeping the credit would help lift housing prices, senior economist at PNC Robert Dye says it would only be a temporary effect until the program stopped, as was seen with Cash for Clunkers.

"First-time homebuyers don't represent the bulk of the market and there is strength well beyond them," said Dye. "If economic indicators such as consumer confidence show improving trends, then experienced homebuyers will stay in the market and take advantage of [the low] prices" even without the credit.

Buyers: Prices are low and the market is moving. Time to buy.
Sellers: Buyers are starting to have more confidence.

Click Here to view beautiful apartments in Manhattan.

Port Authority Plotting “Plan B” for World Trade Center

It appears that the Port Authority has begun planning an alternative “Plan B” for when/if the Silverstein's Towers 2 and 3 go unbuilt. $20 million was allotted to 14 consultants working on a design study for "Plan B." The redesign is unrelated to the Silverstein plan to construct six-story stumps, and will look at where to stick the WTC Transportation Hub's mechanicals should Silverstein just vanish into thin air (the various tanks and such are currently supposed to be housed in the lower floors of the two skyscrapers).

Throughout all of the confusion and muddled planning for the new structure, there were rumors that the WTC Performing Arts Center planned next to One World Trade Center could move to the current site of the Deutsche Bank Building in order to speed up construction. However, the Downtown Express reported that there are all sorts of complications with changing the plan, and the move seems unlikely to happen. Keeping in tune with all of the confusion, there are also all sorts of complications with keeping it where it’s currently planned.

What are your thoughts on the new World Trade Center construction?

NYC Real Estate

Demonstration to save historic Greenwich Village Buildings Today

Following the city’s approval Monday to build an oversized building in place of a recently demolished 1862 row house at 178 Bleecker Street, the Greenwhich Village Society for Historic Preservation led neighborhood activists in protest of the new construction. Locals say the proposed eight-story building would violate zoning restrictions and would tower over its neighbors, including the MacDougal Sullivan Gardens Historic District, which is comprised of 22 identical 3.5-story row houses from the 1840s. A public hearing will be held next Tuesday regarding the landmarking of 30 percent of the neighborhood, which does not include the site at 178 Bleecker Street.

NYC Real Estate

Subway Fares May Be Lowered During Off-Peak Hours

The MTA is considering altering subway fares to offer discounts for those using the train during off-peak hours, late nights and weekends. This will be the most prominent change to the subway system since the abolition of the token.

This past summer prices for a single ride went up 25 cents, from $2.00 to $2.25, although half of those riding the subway use an unlimited pass, and therefore the price differs depending on what type of card is used.

The unlimited-ride MetroCard was introduced in 1998. Ridership on weekdays has since swelled by 40 percent, and weekend ridership has risen almost 70 percent. In 2008, the average weekday ridership was 7.6 million, according to New York City Transit.

A new computerized, scannable fare card would allow New York City Transit to charge passengers different prices depending on the time of day. This kind of system is already available in London. Mr. Walder says the MTA has no plans to raise prices for longer trips, a system used in cities such as Washington DC and London.

Chairman of the Metropolitan Transportation Authority, Jay H. Walder says, “We might imagine that we offer discounts at later times, or we offer weekend discounts. Time-of-day pricing might be very attractive.”

The goal would be to encourage use of buses and subways during traditionally quieter hours. “We have an infrastructure that is set for the capacity of the peak,” Mr. Walder said. “What we really want to do is use that infrastructure all the time.”

About $220 million is included in the authority’s new capital plan to install a smart card payment system, a no-swipe fare card that is waved over a sensor to speed up payment. Mr. Walder wants the cards to be linked to credit card accounts and usable in multiple forms of transit. Unlike in other cities like London and DC, however, passengers in New York would not have to wave their cards again to exit the system.

What do you think about this proposed system? Please post comments for discussion.

NYC Real Estate

NEWS UPDATE: Prices Stabilize, Sales Increase for Homes in NYC

According to REBNY, Citywide Home Prices Up 4% From Last Quarter, Sales Volume Increased 35%

Average home prices in New York City climbed in the third quarter of 2009 compared to the previous quarter, reversing the trend that began last year. This is a sign that the market could be leveling off. Prices were down 14 percent to $670,000 from this time last year. However, for the second quarter in a row, Manhattan home prices declined, dropping five percent to $1,233,000 compared to the second quarter of 2009.

Average home sales prices (which includes cooperatives, condominiums and one-to-three-family dwellings) increased by six percent in Brooklyn to $534,000 and by three percent in the Bronx to $367,000 compared to the second quarter of 2009. Average prices in Queens increased by one percent to $406,000 and Staten Island home prices declined by one percent to $382,000 compared to last quarter.

The report found that citywide sales volume increased 35 percent to 9,734 compared to last quarter. Manhattan sales volume increased 59 percent to 2,840 while sales volume in Brooklyn increased 27 percent to 2,102. "

While we see the market slowly coming back to life, REBNY President Steven Spinola says that in order to be sure of the market recovery the trend must continue for at least two more quarters. But, nevertheless, sales volumes noted in this third quarter report show that it was a busy summer for real estate transactions—a reliable sign that the market is on the rebound.

For a more in depth look at third quarter market reports, click here.

The Pedestrian Friendly Future of 42nd Street

On March 25th 2009 Manhattan’s iconic Herald Square and Times Square were closed to traffic. Broadway is now a pedestrian mall from 47th to 42nd Sts. and from 35th to 33rd Sts. Mayor Bloomberg and other proponents of the street shutdown believe that their decision to close the area to motor vehicles will make New York more livable by reducing pollution, cutting down on pedestrian accidents, and helping traffic flow more smoothly.

Now, some people say they believe the city should take an even more radical step: close 42nd Street to car traffic and build a light rail system to run the width of Manhattan.

The main supporter of this proposal is an organization called Vision 42, a citizens’ group with dozens of supporters. Formed in 1999 by the Institute for Rational Urban Mobility, Vision 42 is a nonprofit corporation that finances its initiative with grants from the New York Community Trust/Community Funds Inc. and the John Todd McDowell Environmental Fund.

The proposal put forth by Vision 42 would add a light rail line that would connect the 39th Street ferry terminal on the Hudson River, near the Jacob K. Javits Convention Center on the West Side Highway, with the 36th Street ferry terminal on the East River, near the undeveloped Con Edison sites on the Franklin D. Roosevelt Drive. The plan also includes a proposal to turn the full length of 42nd Street into a pedestrian mall.

George Haikalis, an engineer who serves as a co-chairman of Vision 42, says the light rail system, which would cost an estimated $500 million, would run from terminal to terminal in about 20 minutes—half the time that the current bus system takes.

Advocates for Vision 42 say they have large owners of real estate on 42nd Street on board with the proposal; however they have not been able to get the city involved in a discussion. Many advocates of the light rail line believe that Mayor Bloomberg is worried about the rail system competing with the plan to extend the No. 7 subway line.

Advocates of light rail said that there was still a need for better surface transportation, since the No. 7 line has no stops east of Grand Central Terminal at Lexington Avenue. Jeffrey Gural, the chairman of Newmark Knight Frank, a real estate company that manages office buildings along 42nd Street, said it would make sense to connect the Javits Center to the United Nations, which currently has no subway stop. The light rail would stop at every intersection along 42nd Street and produce less pollution than the bus system.

Citizens and visitors to cities such as Amsterdam, where traffic is cut off to the city center and light rails serve as the main means of transportation, say the city feels much safer. “Real estate people should take a look at what’s happened with real estate values in other cities where there are these walking streets,” said Mr. Douglas Durst, the chairman of the Durst Organization, which owns five office buildings on 42nd Street, including One Bryant Park and 4 Times Square. “They’ve increased tremendously.”

An economic study done by the consulting firm Urbanomics of New York, projected that about 398 office properties along 42nd Street would have an average increase in lot value of $188 a square foot because of the time saved with a light rail line, a combined increase in value of 4 percent. The study also showed that completely closing 42nd Street to cars and adding light rail would increase the pedestrian volume by about 35 percent, producing a proportional annual increase in sales of about $380 million for the street’s 126 retail outlets.

While the benefits to having a light rail system seem to be clear cut, it is yet to be seen whether or not city bureaucrats will jump on board with the proposal.

What do you think?


NYC Real Estate

Foreign Investors See Now as Prime Time to Buy

On October 4th HSBC sold its headquarters to Israeli firm Koor Industries and Property and Building for $330 million. The deal signals that foreign investors currently see Manhattan real estate as a bargain, experts say. Foreign buyers have been looking at the Manhattan real estate market for the past year, and the general feeling is that if the market has not hit a bottom yet, it is pretty close to it.

Other foreign firms are also expecting prices to soon see a rebound. Over the summer, Youngwoo & Associates and Korea-based Kumho Investment Bank reached a deal to buy 70 Pine St. and 72 Wall St. from AIG for what sources say was about $110 million. Youngwoo reportedly said it plans to turn 70 Pine into a residential condo, and are extremely optimistic about selling, expecting units to fetch $2,000 a square foot. Israel-based Optibase and an American partner agreed to buy half of 485 Lexington Ave. with a plan to buy the remainder later. The deal values the 500,000-square-foot tower at $504 million.

Experts say that buyers can now purchase office buildings for about $800 a square foot, without land costs—far less than it would cost to build them. In the first nine months of 2009 sales of properties priced at $10 million and over were down 80 percent from the year-earlier period. Although firms looking to buy are still struggling with the acute lack of financing, it appears that overall foreign buyers see now as the time to invest Manhattan real estate. The market may be at its bottom—and the rest of the world is not letting this opportunity pass it by.



Looking to invest in Manhattan real estate? Click Here for information on the market and residential investment opportunities.

Active Inventory on the Rise as Market Takes Shape

While third quarter reports show that the market appears to be picking up, it is not nearly as active as it was during the earlier months of 2009. The four months of market depression allowed prices to rapidly adjust, reshaping the new world of Manhattan real estate. Seller confidence seems to be growing, and the optimistic viewpoint at the moment is that buyer assurance is matching it. Bids are improving, and the time that properties are spending on the market is lessening. The fierce conditions and adjustments that the market has experienced has caused hesitation in both buyer and seller expectations, and it is absolutely an exciting time. However—sellers must be cautious, your property is worth only what a buyer is willing and able to pay for it. Prices are heading back up, but it is important to not get over zealous with an asking price.

New York City Wine & Food Festival Begins Today

The Food Network’s New York City Wine & Food Festival has started today and will continue on until Sunday, October 11th. The celebration of food, wine and cheer will take place in Manhattan’s famed Meatpacking District. It is absolutely the most fitting neighborhood for the celebration—the district’s abundance of restaurants and bars gives the area the reputation of food lover’s haven. However, even more profound is the sense of tradition which brings seasoned New Yorkers as well as out-of-towners to experience a taste of New York culture.

The festival will consist of over 80 events stemming from the Meatpacking District and beyond. These events include street tastings, performances and music. All of the proceeds go towards benefiting community based hunger relief organizations including Food Bank for New York City and Share Our Strength. This year’s talent includes Rachael Ray, Bobby Flay, Paula Deen, Anthony Bourdain, Alton Brown, Martha Stewart, Tom Colicchio and Guy Fieri, to name a few.

Important to the festival is the atmosphere of closeness—people will go from store to store, discovering wines and food as well as mingling with their neighbors. Throughout the weekend, the area’s galleries, shops, bars and restaurants will offer special menus, wine tastings and other events.

While many of the events require tickets, it is still worthwhile to visit the festival and experience how it feels when a New York City neighborhood joins together in the name of the arts, food and culture.

Organizers expect a turnout of around 2,500 people. Tickets for limited events are still available. For more information, visit www.nycwineandfoodfestival.com/

Third Quarter Market Reports are Out: The Free Fall is Over

After months of hyping up the possibility of a Manhattan market rebound, the moment we have all been waiting for has arrived: the release of the third quarter market reports. So, the question remains: do we have something to be happy about? The reports show that the free-fall of market prices is over, and the number of sales is way up from the previous quarter. Here, some “key metrics” from three brokerage firms describing their individual sales from the last quarter:




Average sale price

• Elliman: $1.323M Down 10% from last year, up 0.8% from last quarter
• Corcoran: $1.282M Down 16% from last year, down 11% from last quarter
• Halstead/Brown Harris Stevens: $1.274 million Down 13% from last year, flat over last quarter
  

Median sale price

• Elliman: $850,000 Down 8.4% from last year, up 1.7% from last quarter
• Corcoran: $799,000 Down 18% from last year, down 4% from last quarter
• Halstead/BHS: $781,000 Down 14% from last year, down 1.7% from last quarter
  

Number of sales

• Elliman: Down 16% from last year, up 45.6% from last quarter
• Corcoran: Down 38% from last year, up 16% from last quarter
• Halstead/BHS: Down 25% from last year
  

For a more in-depth look at third quarter market data, click here.

The Debate on the State of the Market Rages On as Third Quarter Stats are Released

Today’s Headlines

Taken from:
The New York Times Manhattan Apartment Sales Bounced Back Over the Summer, but Not All the Way by Josh Barbanel
Published October 2, 2009

It’s the question that has been on the minds of many New Yorkers: Has the real estate market reached a bottom yet? After a year of declines in Manhattan co-op and condominium sales, the residential market has recovered enough to finally have real estate appraisers and brokers approach this debate. Here, some statistics from the third quarter market reports released today (Friday, October 02, 2009):

• From July through September sales rose sharply from the second quarter, up 45.6 percent, but are down 16 percent from the levels they were at a year ago.
• For the most part, sale prices moved sideways this quarter although prices of apartments and new condominiums continued to fall. The average co-op and condo apartment sale price is now at $1.32 million, off 10.6 percent from the same quarter in 2008, but up 0.8 percent from the second quarter.
• Co-op prices are down 5.9 percent from the previous quarter, while condominium prices are up 3 percent.
• Average sale price on Upper East Side townhouses is still 50 percent below the price in the first quarter of last year.
  

With all of this exciting new data, the debate on the market has sparked speculation from multiple New York real estate firms:

• A spokesman from Miller Samuel Inc. said that while the Manhattan housing market may be getting better in some ways, it has “not yet found a bottom.” The company attributed the current situation of the market to high local unemployment and tight credit.
• Many firms are more optimistic and are reporting that they had experience their busiest summer in years because buyers who had been scared of pulling the trigger in the spring had more confidence in the market. Dorothy Herman, the president of Prudential Douglas Elliman says, “We see the market as stabilizing. It has hit bottom.”
• Hall F. Willkie, president of Brown Harris Stevens, believes that with the rebound in the stock market and slowing job losses buyers are becoming more comfortable and that “confidence is returning to the marketplace.”
• Pamela Liebman of the Corcoran Group believes that “if we are not at a bottom, we are close to it.” However, she also says that despite the increase in sales, there is little evidence that prices will rise significantly in the near future.
  

Those who believe the market has yet to hit bottom attribute the sharp rise in sales to a shift in the busy season due to economic conditions. Usually, the spring is the busiest season for apartment sales in Manhattan. This year sales were halted due to the struggling economy and therefore the surge happened later. The spring market, in effect, occurred this summer.

Despite all of the hearsay, the new market has yet to take shape. But one thing is for certain—people are buying, and New Yorkers can’t ignore that sneaking suspicion that it is time, once again, to feel comfortable in the marketplace.


News Flash

Update from Alfred Real Estate

For those of you who think the real estate market is still dead, it is time to think again! The market is alive and property is selling. Don’t let anyone tell you otherwise. Sellers—the time has come to once again feel comfortable putting your property up for sale. Buyers—now is as good a time as ever to invest in a new home.

One of Alfred Real Estate’s principal brokers recently decided to invest in property and submitted a bid that was 10% less than the asking price. A few months ago she may have had it in the bag, but as it turns out she was one of three bids, and not even the highest at that! In fact, encouraged by the demand on his property the seller decided to have another open house to solicit more potential buyers. At the open house he plans to have a highest-and-best-bid closed auction. People are back in the market, and if the price is right, they are buying!

Mythbusters: Buyer’s Remorse in Today’s Manhattan Real Estate Market

Buyer’s remorse: a dark, threatening cloud that hangs over your head when the forecast calls for sunny weather. But in the current Manhattan real estate market it is important to ask yourself, “Is it really going to rain?” A recent Alfred Real Estate client spent weeks deliberating whether to sign a contract to purchase a six-room condominium in the desirable Upper East Side neighborhood. As time went on, she and her husband watched prices dip, prompting them to hold off as to not feel the sting of buyer’s remorse. In the meantime, the fear of overpaying combined with gossip floating around urging them to “wait for the right time” has them still paying a five figure rent. $200,000 in rent later, she is still house-hunting and living in a building and an apartment that she doesn’t really like. The news is that there is only so much downward play left in this market.

Most buyers in Manhattan think they are overpaying. With figures constantly being thrown around like “prices are down 20%” or “the market has yet to hit bottom” it is very easy to get caught up. However, just because prices are low doesn’t mean you shouldn’t be cautious. Read the offering plan, and then read it again. Make sure you are getting exactly what you want. The truth of the matter is you and your agent need to understand the reality of the market and how that applies to the property (condo, brownstone, or apartment) you are interested in. You must consider only appropriate comps, meaning properties that have recently been sold in buildings from the same era (prewar or new developments) and with the same amenities (doorman, gym) and the same neighborhood (Upper East Side, Upper West Side). When you are looking to buy, only assess properties that are either in contract or have sold in the past two to three months. Keep in mind that at the moment prices in Manhattan are lower than they have been in years, and how much further they are going to go down or when they are going to spike back up is anyone’s guess.

This is no time to be scared off from buying a Manhattan home if your finances allow it—the market has reached a realistic point and, when factoring in the connection between interest rates and prices it may be at its best point in years. If prices come down another 10% but interest rates increase by 1 percentage point, that would mean the same monthly payment today versus waiting. So, if you buy today might you end up paying more than if you had waited a couple months? Perhaps— but show me the buyer who has ever successfully picked the exact bottom or top of a market. Third quarter 2009 reports show that the number of sales is on the rise—a reasonable sign that the market has bottomed and is stabilizing. Does this mean that soon we are going to see prices shoot back up to where they were? No. But prices will probably rise enough to find a new, higher-than-current stabilized level. Continuing to pay an expensive lease in an apartment you want to leave behind could be a senseless waste of money. You might also end up waiting too long and missing out on an opportunity that hasn’t been available to buyers in Manhattan in 20 years. Now that would be a real case of buyer’s remorse.

An update on the NYC housing market and what it means for you

Keep track of trends. Since 3rd Quarter 2008 real estate reports, New York City’s housing market has faced some of its toughest challenges in twenty years. Manhattan has certainly felt the effects of the global financial crisis. It took New York City nearly 9 months to feel the effects of the housing crisis that the rest of the country had been struggling with. And when it hit—it hit hard. The decline in the amount of closings happened frighteningly fast. During the 2nd quarter of 2008, total closings on home sales decreased by nearly 60 percent. However, trends in recent months have shown signs of improvement. On September 18th the government announced that housing starts have hit a 9 month high—indicating that the market is most likely turning around. During the 1st quarter of 2009, closings had increased by 10 to 15 percent and research has shown that home sales will most likely increase further. With the market starting to reshape itself, this quarter and the next will most likely define the new levels of pricing in Manhattan.

The market may be recovering, so take advantage while prices are low. This fall the market appears to be behaving much more normally than it has been over the past 12 turbulent months. Reports show that the number of listings added in Manhattan after Labor Day was similar to last year’s. This bode of confidence in the market shows that consumers are once again feeling comfortable enough to sell. This is good news for sellers—the steep decline has certainly subsided—but it does not mean that the market has returned to the way it was in its heyday. Although inventory has somewhat stabilized, sellers will not be getting the prices they received a year or two ago. New data suggests that asking prices are about 24 percent below levels last year at this time. According to 2nd Quarter 2009 real estate reports for Manhattan, the average sales price of condos is $1,598,000 and the average sales price of co-ops is $922,000—the lowest prices the city has seen in years.

Foreign investors: Listen up! The Association of Foreign Investors in Real Estate has released a survey of its members and has ranked New York City the number one city in the world for real estate investment. The real estate downturn has made New York apartments and townhouses an incredible value for those who earn money in euros, Japanese yen, British pounds, Brazilian reals and other foreign currencies.