Archive for July, 2009

Jul
30

All Real Estate is Local, Very Very Local (Still)

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Real Estate is Hyper-Local

Real Estate is Hyper-Local

The Case-Shiller Index reporting on residential  property sales for the period of March, April, and May was published yesterday.

As noted in last month’s Geezer Rant,  because the index excludes price data on new developments, condos and co-ops,   the Index is not applicable to 99% of residential sales in Manhattan.

It’s interesting to note that the Wall Street Journal commented on this fact albeit  in the second page and 22 paragraphs into the article:

The Survey doesn’t track condominium or cooperative apartment sales, so it doesn’t take into account the majority of housing stock on New York City.

To get a better picture of the Manhattan real estate market in the second quarter of 2009, check out the various reports and press commentary published and discussed at the beginning of this month.

The Q2 Manhattan Market Overview prepared by  Miller Samuel, an independent appraisal firm,  and Prudential Douglas Elliman real estate, differentiates sales by the four major regions of Manhattan:  East Side, West Side, Downtown and Uptown. In addition to accounting for seasonal adjustments, the report also breaks out sales by new developments and resales–both very important factors in reporting median and average prices so that like sales are properly compared.

Even with that degree of Manhattan specificity, there remain neighborhoods within those regions can have quite different sales price results. For example the East Side consists of at least  seven neighborhoods including Beekman, Kips Bay, Murray Hill, Sutton Place, Carnegie Hill and Yorkville. Then there are “corridors” like the 5th Avenue and Park Avenue.

Within Manhattan there are areas, neighborhoods, sub neighborhoods corridors etc. Within those areas are specific blocks, specific buildings with specific views from specific floors or amenities which may affect property prices. Think about  a 5th Avenue apartment on a high floor facing Central Park vs.  an apartment in the same building on a low floor with no park views.

But  as Barry Ritholtz pointed out in his blog The Big Picture the “media coverage was mostly gushing” (see below),  the point is that all real estate is local, very very local and even hyper-local. Caution should be taken when extrapolating any national reports’ data  to any specific city or  town.

Front Page WSJ: Home Prices Rise Across U.S.Home prices in major U.S. cities registered the first monthly gain in nearly three years, according to a new report that provided fresh evidence that the severe U.S. housing downturn could be easing. Standard & Poor’s Case-Shiller index, which tracks home prices in 20 metropolitan areas, rose 0.5% for the three-monthperiod ending in May, compared with the three months ending in April. It marked the index’s first increase after 34 straight months of decline, and came after a variety of housing indicators has shown glimmers of hope for the past several months

Front Page NYT: Recovery Signs in Housing Market Stir Some Hope

After a plunge lasting three years, houses have finally become cheap enough to lure buyers. That, in turn, is stabilizing prices, generating hope that the real estate market is beginning to recover. Eight cities, including Chicago, Cleveland, Denver and San Francisco, showed price increases in May, up from four in April and one in March, according to data released Tuesday. Two other cities, Charlotte, N.C., and New York, were flat.

Bloomberg.com - U.S. Home Prices Rise for First Time in Three Years

Home prices posted their first monthly gain in three years in May, a gauge of values in 20 major U.S. cities showed, reinforcing signs of stabilization in a market hammered by the worst slump since the 1930s. The S&P/Case-Shiller home-price index rose 0.5 percent from April, the first monthly gain since July 2006 and biggest since May of that year, the group said today in New York. The measure was down 17.1 percent from May 2008, less than forecast and the smallest year-over-year drop in nine months.

CNN/Money – Home prices up for 1st time in 3 years

Index of 20 major cities rises on a monthly basis for the first time since July 2006, hinting that the worst of the declines may be over. The value of U.S. homes grew on a monthly basis in May for the first time in nearly three years, according to 20-city index released Tuesday. The month-over-month increase was 0.5%, according to the report from financial data company Standard & Poor’s and economists Case-Shiller. It was the first increase in the monthly index since July 2006.

Reuters - Home prices up for first time in three years

U.S. single-family home prices rose in May from April, the first monthly increase in nearly three years, suggesting prices may be stabilizing, according to Standard & Poor’s/Case Shiller home price indexes on Tuesday.

Jul
29

Tuna Salad Sandwich Throwdown

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Tuna Salad IngredientsIt was a hot humid going-to rain-any-minute kind of a Wednesday in the summer. My wife was going to stay at her office late then go to Lincoln Center to see South Pacific at the Vivian Beaumont theater.

I had some time before an afternoon meeting and some follow-up calls. So I jumped in a cab and went home. I’d take the conference calls and GoTo Meeting there.

But I was hungry and had about 20 minutes to kill before the 1pm meeting. It was going to be a tuna sandwich lunch. I wondered which would taste better in tuna salad- scallions or shallots (I normally use red onion).

So I whipped it up and let the flavors meld together:

Bumble Bee canned tuna in water, 1 Tbs chopped scallion, 1 Tbs chopped scallion, 2 Tbs chopped celery, 4 Tbs Hellmann’s low fat mayonaise, fresh lemon juice. Some grape tomatoes and lettuce for the sandwiches.

Divide tuna into 2 bowls, then added the scallion to one bowl and the scallions to the other. Combine half of the celery and mayo in each bowl and add a squeeze of lemon. Mix, cover with plastic wrap. Refrigerate and let sit ’till after the meeting.

The Winner is---The GoTO meting was over at about 2:10 so I had about 20 minutes until my next call. I made a couple of sandwiches and the tasting began.

As the thunder started to roll and the rain began to pour, I logged into the meeting and  decided that the shallots beat the scallions.

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Jul
27

Mortgage Trends July 27, 2009

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Mortgage rates ticked slightly upward last week with the Fed Chair providing some comfort to nervous markets.  Ben Bernanke was busy last week with testimony in both houses of Congress and an op-ed piece published in the Mortgage_Rate_Watcher_7-26-09Wall Street Journal.  According to the Fed Chair’s assessment, the Fed needs to stay focused on stimulating the economy and exiting this recession.  As importantly, Bernanke sought to reassure both houses of Congress and the public that the Fed has the tools at its disposal to bring rates higher and reduce the flood of money the Fed has introduced to the market.  He believes all of this can he accomplished with limited long-term inflationary consequences.Freddie_Mac_07-2609

Mortgage rates start this week with some upward pressure that could stretch into coming weeks.  The Fed’s Beige Book which combines and synthesizes regional report is due this wee. along with the first reading of the 2nd quarter’s GDP. If these show a continued moderation in the severity of this recession, mortgage rates will likely move upward, albeit at a relatively slow pace.

Top_Economic_Reports_07-26-09

Mortgage Fraud on the Other Side
When you think of mortgage fraud, images of inflated incomes, false appraisals, and undocumented assets may come to mind.  Authorities are now investigating more and more cases of fraud on the other side of the coin.  A surprising number of people are trying to hide income and assets, while trying to get their homes appraised below market value. The goal of these cases is to falsely qualify for various mortgage relief programs. How times have changed!

Data provided by Larry Weinstein and Fred Ashe, Senior Loan Officers at Preferred Empire Mortgage Company, a sister company to Prudential Douglas Elliman.

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Jul
17

Malbec Wine Tasting at Morton’s Restaurant

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Malbec Tasting at MortonsWe had a wonderful bottle of Malbec while in Argentina a few years ago. I think it was called Luis Borcas. I’ve never tasted a more wonderful wine paired with beef but have been unable to find it here in Manhattan.

So when I was invited to a Malbec tasting at Morton’s Steakhouse on East 45th Street I was excited to taste these Trapiche Malbecs.  In addition to the wine we were treated to samplings of food as well.

On the wine list:
Trapiche, Torrontes, 2008
Trapiche, “Oak Cask,” Malbec 2007
Michel Torino, “Don David,” Malbec 2006

Broquel, Malbec 2006
Trapiche, “Adriana Venturin,” Malbec 2006

Paired with samplings of:
Sliced Tenderloin with Chimichurri Sauce
Broiled Sea Scallops, Apricot Chutney
Selection of Cheeses
Miniature Morton’s Legendary Hot Chocolate Cake

I dutifully sampled the five selections, but kept coming back to my favorite the Trapiche Single Vineyard “Adriana Venturin.” It was spicy yet soft, and after breathing for about a half hour was wonderful with the sliced tenderloin on crostini.

Not really a fan of deserts-and for some reason I didn’t think the chocolate cake would compliment the wine,  took a glass of the Adriana Venturin to the bar and ordered lamb chops.

It was really was excellent.

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Jul
16

Brooklyn Residential Sales Report For Q2 2009

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Brooklyn Market Report 2nd Quarter 2009Miller Samuel, an independent appraisal firm,  and Prudential Douglas Elliman real estate today released the Brooklyn Market Overview.

This quarterly survey of Brooklyn residential sales analyzes the 1428 sales of condos, coops and 1-3 family properties that closed in the second quarter of 2009 and compares the data to first quarter sales of this year as well as the same quarter sales of 2008 thus adjusting for seasonality.

The luxury market subcategory was also included in the analysis and represents the top 10 percent of all coop, condo and 1-3 family sales.

Categories : Co-op, Condo, Market Reports
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Jul
16

Queens Residential Sales Report For Q2 2009

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Queens Market Report 2nd Quarter 2009Miller Samuel, an independent appraisal firm,  and Prudential Douglas Elliman real estate today released the Queens Market Overview.

This report of Queens residential sales analyzes the 2129 sales of condos, coops and 1-3 family properties that closed in the second quarter of 2009 and compares the data to first quarter sales of this year as well as the same quarter sales of 2008 thus adjusting for seasonality.

The luxury market subcategory was also included in the analysis and represents the top 10 percent of all coop, condo and 1-3 family sales.

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Jul
10

Manhattan Rental Market Report 2nd Quarter 2009

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Manhattan Residential Rental Report 2nd Quarter 2009Miller Samuel, an independent appraisal firm,  and Prudential Douglas Elliman real estate today released the Manhattan Rental Market Overview. The report tracks the 2346  apartment rentals that occured in the second quarter of 2009 and compares the data to first quarter sales of this year as well as the same quarter sales of 2008 thus adjusting for seasonality.

The market report shows that rental inventory year-over year was up 28.8% , there was a 17.5% year over year decline in rental price per square foot and a 58.3% decline in the number of new rentals. Interestingly, the average rental price in Q2 09 vs. Q2 08 shows a decrease of only .9%,

At the end of a very interesting article written by Jonathan Miller for the Huffington Post,  he confirms what I’ve seen is that there are a large number of first time buyers out there, and contracts are being written (and signed).

“One of the key culprits for the rental price and activity drop was the record low mortgage rates in the spring, which pulled many first time buyers out of the rental market (if they could qualify under the banks newly-found underwriting conservatism). Combine that shift with rising unemployment and there is less activity and downward pressure on rental prices.

One could therefore argue that the rental market is a leading indicator for the purchase market, at least in Manhattan. When the economy improves and the pace of unemployment begins to ease, the number of rentals should begin to rise, eventually followed by sales activity.”

Lobster Dock-Boothbay Harbor MaineWhat a great July 4th weekend! Our  visit to Boothbay Harbor, Maine included lobster dinners at the Lobster Dock restaurant which has wonderful views of the bay.

Mitch, the owner buys fresh lobsters daily from the local fisherman who dock their boats in the bay near this well known lobster shack. They are boiled in sea water and are accompanied by corn on the cob and a biscuit! Don’t forget to check out the crispy onion rings.

Lobster cooking pots at the Lobster DockBut the Lobster Dock is not just a one trick pony. Lobster rolls, lobster stew, creamy and and fresh clam chowder and amazing crab cakes are also featured there.  You might recall the crab cake throwdown between Mitch and Bobby Flay from the Food Network.

While in Booth Bay I couldnt resist checking out a few of the condos. On Trulia I found 12 listings in Boothbay Harbor. They ranged in price from a $279K 2br/1.5bth 1360sf  condo to a $475K 3br 3bth 2200sf unit with water views.

We drove by four of them  just  “steps away”  from  the Lobster Dock as we drove in for our pre fireworks dinner.

On the water 3Br 3bth 2200sf condo

On the water 3br 3bth 2200sf condo-$475K

Interestingly, I tried to get comparable selling prices but that information doesn’t appear to be publically available. Like in the old days, I guess you have to check with one of the local brokers who are the price/information gate keepers. I didnt have time to visit the county clerks office because we were on our way to visit the town’s July 4th picnic bash.

July 4th town picnic in Boothbay Harbor MaineAt the picnic, my wife needed to have a taste of the cherry pie. Since it wasn’t available ala carte, I was “forced” to get the barbecued chicken which included the pie!  Hmm that was good.

Categories : Condo, Fun Stuff
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Jul
02

Manhattan Coop and Condo Sales Reports For Q2 2009

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Manhattan Market Report Q2 2009

Manhattan Market Report Q2 2009

Miller Samuel, an independent appraisal firm,  and Prudential Douglas Elliman real estate today released the Manhattan Market Overview. The report tracks the 1532 sales of coop and condo apartments that closed in the second quarter of 2009 and compares the data to first quarter sales of this year as well as the same quarter sales of 2008 thus adjusting for seasonality.

In addition, the  report separates and compares median sale prices of resale properties ($725,000) with the median sale prices of new developments ($1,069,162). This is important because new developments represent the state of mind of buyers who signed contracts up to 18 months ago. Other stats include:

  • Listing inventory grew a modest 8.7% over the same period last year but fell 10.2%  from the prior quarter. This reflects the restrained release of “shadow” inventory, which include new development units at or near completion not currently offered for sale, and “casual sellers” opting to wait until market conditions improve before listing their properties.
  • There were 50.3% fewer sales in the second quarter as compared to the same period last year as weaker economic conditions and more difficulties for many to obtain a mortgage made it more difficult to buy an apartment.
  • The average amount of time to sell and apartment is now 162 days. Twenty seven days longer than the same period last year as raising inventory creates increased competition among sellers.
  • The listing discount, which is the difference in price between the last asking price and the selling price, was 7.8% was down from 12.4% in the first quarter of this year but up from 3.6% in the prior year quarter.
  • Both studio and 1 bedroom coop apartments saw no change in median sales prices from the prior quarter at $365,000 and $580,000 respectively.
  • Two bedroom coop apartments had a decline of 4.4% to $1, 075, 000.
  • Both 3 and 4 bedroom coop apartments declined by 41.8% to $1,995,000 and 53% to $4,200,000 respectively
  • The overall median sale price a Manhattan condo fell below $1,000,000 for the first time since the first quarter of 2007.

Other reports published today include Corcoran and Property Shark, Brown Harris Stevens and Street Easy.

Other commentary supplied by The Huffington PostThe New York Observer, ForexYard, CNNMoney and The New York Times

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