Archive for June, 2012


Putting a Price Tag on Views of Central Park

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A new report  from finds that the price of a typical apartment sold in buildings that border New York’s Central Park was more than double than that for for apartments in surrounding neighborhoods last year.

The price difference is even greater for co-ops on the park with those prices three times higher along the parks than in co-ops in surrounding neighborhoods, the largest reported since 2008.

Living close to the park is something that nearly every homebuyer wishes for, but the waterfront and nearby neighborhoods may eventually reduce the premium paid for shelter on park-lined blocks.

The report found that median apartment sales price was 1.85 million last year compared to $850k in the surrounding ZIP codes which includes most of the Upper East and West sides, which works out to a 118% premium.

Similarly, the median co-op price was $2.4 million compared with $795k for the surrounding ZIP codes, making a 202% premium for Central Park Properties.  The premium was 233% in 2008 when the sale of more expensive properties intensified.

New York real estate is very local, with prices and status varying from building to building.  One great advantage to owning on  Central Park:  no new buildings will be built in front of your building.  But one doesn’t need to live on Central Park to take advantage of the view; some of the priciest sales often have a view of Central Park as well.

From Wall Street Journal article by Josh Barbanel

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MTA Unveils Second Avenue Subway Air Monitoring Website

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You can take a deep breath along the Second Avenue subway construction zone, according to the MTA.  Even with the dirt and dust from the digging and blasting, the MTA says the air is safe, and created a website to post the data online to prove it. 

  • Every Wednesday, MTA will post updated air quality monitoring data from the 10 locations between East 63rd to 96th streets on its website  for the pollutant Particulate Matter 10, which can cause or aggravate such health concerns as asthma, bronchitis or other lung disorders.
  • Data collected so far show that the levels along the corridor are generally 1/3 below the national standard set by the EPA
  • The results show the 24-hour readings of minute-to-minute samples collected.
  • If levels exceed standards during a 15-minute window, an alarm goes off and immediate action is taken.

 Local politicians and some residents are pleased with the voluntary transparency and find the results and increased communications encouraging.

Excerpted from

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Is That “L” Really A Room? Maybe…

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Room Requirements

Q:  Does a room need to have a window to be considered a “room” for listing purposes?  If so, is there a minimum required size for the window?

 A:  Yes.  For listing purposes, the NYC Administrative Code requires every “room” to have at least one window that opens onto a street, yard, or court on the same lot.  Furthermore, the window must have a total area of at least one-tenth the floor area of the entire room.  Closets, halls, stairs, laundry rooms, bathrooms, foyers and dining spaces are not considered “rooms” and therefore do not require windows.

To view a FAQ on the proper marketing of bedrooms and other rooms in a dwelling, CLICK HERE.  Note that “bedrooms” and “living rooms” have different window size requirements than regular “rooms”.

From REBNY Newsletter

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Staging a home for a sale often includes clearing clutter, adjusting the placement of furniture and making the apartment appear as clean, fresh and desirable as possible.  Virtual staging will digitally alter photos of a home to show potential buyers what could be done in the space without actually making the changes.  Typically physical staging is expensive, starting at around $2,500.  A photo of a room can be digitally staged for about $65 to $75 per photo.

If given a choice, physical staging is most advantageous; when viewing the property, buyers can actually see rather than imagine the space in the perspective of size and scale.  An empty apartment leaves buyers wondering if their furniture will fit, but seeing digitally staged photos will allow buyers to better visualize how furniture works within a space.

Virtual staging has other benefits as well.  Is the space a perfect fit for a grand piano, but the cost is prohibitive to put one in the physical space?  Digitally add one with a few clicks of a mouse.  Furnishings look a little outdated?  Wipe the slate clean and digitally put in new furniture.

Staging experts recommend focusing on the living room and master bedroom, using just a few key pieces of furniture that will make the room appear open and inviting.  Furniture should never take over a space.


From NY Times Article by Tim McKeough


In the News

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6/11/12  Manhattan apartments tip furthest in favor of buyers in last six years:  Amid rising rents, buying a Manhattan apartment hasn’t looked this sensible since 2006. Citing data from appraisal firm Miller Samuel, Bloomberg News reported that in the first quarter the average cost of buying was 20.8 times more expensive than the annual cost of renting, the smallest spread since the end of 2006, when buying was 20.4 times the cost of renting. In the second quarter of 2008, the multiple was 26.7.   Read the full article at the Real Deal

6/11/12:   For Comedian, Leading Her Condo Board Is a Serious Matter:  To sit on the board of a condominium or cooperative in New York City is to exert exquisite control over your building, to decide who gets to buy Apartment 12C and to pick the color of the lobby wallpaper. But it is also a position that comes with neither compensation nor thanks, and it requires sitting through hours of bickering over questions like whether the doormen ought to wear little caps. The ranks are often dominated by retirees, real estate brokers and lawyers.   Read the full article in the New York Times 

6/13/12  American buyers join foreigners in flight to city’s luxury market:  Wealthy Americans have been lost in the hysteria over foreign buyers descent upon the city’s luxury real estate market, but in the last week domestic buyers have returned with a vengeance. The Wall Street Journal noted that two apartment deals totaling $110 million closed Monday to foreign buyers.  Read the full article at the Real Deal 

6/14/12  Hospital for Special Surgery Unveils Plan for New Building:  The Hospital for Special Surgery unveiled plans Wednesday to build a 207,000-square-foot, 13-story ambulatory care facility.  The proposed building would included three floors of operating rooms for ambulatory surgeries — where patients stay up to 23 hours — along with a floor for recovery.  Read the  full article at


Record Setting Low Vacancy for NYC Apartments

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Manhattan is one of the foremost apartment markets in the country, featuring some of the highest rents and features an extremely affluent tenant base. While there are a variety of rental housing types in New York City, including extensive rental units, vacancy is low across the board. The 167,000-unit market-rate investment-grade apartment market has the lowest vacancy rate among the top Reis markets, a rate lower than the low-point of the prior cycle. New York City is set to test the limits of how low its vacancy can fall and how high its rents can rise. The city’s household average income is forecast to increase 27.7% during the half-decade from 2011 to 2016. With the vacancy rate down to frictional levels, effective demand is constrained to the extent of new supply. And new supply is hard to come by in a densely developed city where buildable sites are scarce and expensive

Record Low Vacancy

  • Reis reports a New York Vacancy rate of 2.0% for first quarter 2012, down from fourth quarter 2011 and first quarter last year. 
  • The number of vacant market-rate units have fallen below 3,400 and rent regulated and subsidized units are generally even harder to find. 
  • Vacancy rates are predicted to fluctuate within 10 basis points of its current level through 2015.

Search for New Supply

  • Demand is being quelled by the limited amount of new supply. 
  • Net absorption was only 526 units in the first quarter follow a two-year surge, but is expected to end 2012 at more than 4300 as more units become available to absorb. 
  • Approximately 780 market rate apartments were added in the first quarter according to the latest new construction data leaving nearly 5800 under construction.
  • The first quarter also saw 423 condominium units completed, leaving about 1830 under construction.  Condo construction is down from the housing bubble years and in the past four quarters 553 condo units have gone rental.

Rents Still Increasing

  • The average asking rent was $2953 per month, unchanged in the first quarter 2012 and the average effective rent was up .3% to $2885 per month.
  • Reis predicts an increase of 5.1% asking and 6.0% effective for 2012 and 5.0% to 6.0% for each year from 2013 to 2016.
  • Rents will rise until excess demand is depleted.

From ReisReports

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Reading and Understanding a Co-op Financial Statement

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It’s bad enough to keep poor track of your own spending habits. But in the case of a co-op board, which is responsible for the financial well-being of a corporation, it can be catastrophic. Most of the board’s business hinges on financial matters: dealing with shareholder arrears, taking out new mortgages, estimating the cost of needed repair work, and so on. Financial statements are the backbone of the industry. Here’s how to read one.

A co-op’s financial statement consists of several parts: the opinion letter, or auditor’s report; the statements (balance sheet, statement of income and expenses and deficit, and statement of cash flows); and footnotes.

  • Play fair. The auditor’s report, which is usually addressed to the shareholders and/or the board, should affirm that the financial statement presents fairly the financial position of the co-op and the results of its operations and cash flows for a stated period (usually a year). Take note of the concept of “presenting fairly.” It’s not a penny-precise accounting, and it’s not a judgment on the co-op’s financial position. It simply means that the information is accurate and complete enough to be the basis of a well-informed decision.
  • In and out. Your primary interest in reading the financials is the co-op’s cash flow and how it will affect maintenance fees. You’ll find this information in the income and expense statement. Have the co-op’s maintenance charges and other income covered its operating expenses? If the building ran a large deficit, absent extraordinary circumstances, a whopping maintenance increase is on the way. 
  • Looking ahead. The next figures to look at are the mortgages, which are found under “Liabilities” on the balance sheet. The important items to note for each mortgage are the due date and the interest rate. A more remote due date assures a stable line item in the co-op’s expenses, and the interest rate’s relation to current market rates suggests whether a refinancing will bring higher or lower payments. 
  • Taking credit. The existence of a revolving line of credit is also important. It enables the cooperative to cover emergency needs without an assessment, if it so chooses. To some extent it exists as a substitute for reserve funds.
  • Show me the money. After the credit, look to the cash. This can be found at the top of the balance sheet. Find the cash position and any liquid investments. Taken together, will these give the co-op sufficient cash to meet its operating expenses as they come due? If the co-op is “cash poor” and reliant on its shareholders paying on time, the result may be emergency assessments, a general strain on credit and finances, and higher maintenance. 
  • Reserve judgment. Another element of the cash picture is the recurring question: how big a reserve fund should a co-op have? The answer depends on many things, including the age and condition of the building and the types of shareholders living there. An old building needing a lot of repairs, or one with elderly shareholders on fixed incomes, should have more cash on hand to deal with emergencies rather than using assessments.
  • Loose ends. As the final step in your review of the co-op’s financials, you should then look at all remaining items, noting those that you can’t explain or don’t understand, and discuss them with the treasurer. When you finish reviewing the financial statements, you should have a better understanding of your corporation’s finances and be better able to participate in the task of running your co-op.


From Habitat Magazine

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How’s the Market – May 2012

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While Quarterly Sales Reports show closed activity for the previous quarter, monthly Contract Signed reports are the ‘crystal ball’ of closed sales to come.  Granted all contracts signed for any given month may not close in the next month,  and some may not close at all but most (over 95%) will become closed sales which will become part of the next Quarterly Sales Report.

In the following charts and graphs you can see how the market stacks up against last month and this month last year.








In the News

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6/3/12  Tourists Drive Retail Surge in Manhattan:  Tourists are spearheading a retail spending surge in Manhattan, with $52.4 billion expected to pour into the cash registers of clothing stores, electronics shops and other outlets by the end of 2012, according to a report being released Monday.  See the article in the Wall Street Journal 

6/6/12  Foreign investment in NYC commercial properties doubles, Knakal says: VIDEO:  While foreign investment in New York City residential real estate has captured the headlines, Massey Knakal Realty Services Chairman Robert Knakal appeared on CNBC’s “Street Signs” this afternoon to say foreign investors have also sought commercial properties (see video above). He reported seeing twice as much foreign investment in real estate thus far in 2012 as he did during the same period last year.  See the Video and read the article at The Real Deal 

6/6/12  New York Hospitals Look to Combine, Forming a Giant:  A proposal to bring together NYU Langone Medical Center and the Continuum Health Partners network would change how medical care is delivered in the city.  See the full article in the New York Times   

6/7/12  Reports:  Manhattan rental market gets even tighter:  With rents again hitting record highs, vacancy rate dips below 1%.  See the entire article at The Real Deal


Mortgage Market Trends for June 2012

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Central Banks Prepared to Act

Following a large improvement in mortgage rates and a large decline in stocks last week, investors partially reversed direction this week. The European Central Bank (ECB) and the Fed were the main focus, providing a degree of comfort, and investors were a little more willing to take on risky assets. This was negative for bonds, however, and mortgage rates ended the week modestly above last week’s record low levels.

The high degree of uncertainty about the troubles in Europe and the pace of US and global economic growth remains a major influence on US mortgage rates. In general, the uncertainty causes investors to reduce risk, which supports low rates. In addition, it tends to produce a higher level of volatility, which was evident this week. Reports about potential actions by the ECB, the IMF, China, Greece, and Spanish banks all produced significant reactions, even though little of the news could be supported as more than speculation. There will be series of major events later in the month, including Greek elections, an EU summit, and a Fed meeting, so it is reasonable to expect that volatility will continue.

Highly anticipated statements from the President of the European Central Bank (ECB) and from Fed Chief Bernanke this week helped ease investor concerns a little. Neither the ECB nor the Fed is ready to provide additional stimulus right now, but they are open to further action if necessary. The ECB and the Fed have already taken extraordinary measures to ease the financial crisis. The leaders of both central banks pointed out that monetary policy alone will not be enough to solve all the problems. They suggested that decisive action by political leaders would be more effective than further central bank action at this point.

 Also Notable:

  • China cut rates for the first time since 2008
  • Fitch downgraded the debt of Spain
  • The Fed’s Fisher stated that weak job creation is a bigger concern than inflation
  • The Treasury will auction $66 billion in 3-yr, 10-yr, and 30-yr securities next week

Week Ahead

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Wednesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. Retail Sales also will be released on Wednesday. Retail Sales account for about 70% of economic activity. Industrial Production, Consumer Sentiment, and Empire State will come out on Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.


Graph Courtesy from NY Times in an article by Vickie Elmer June 7, 2012.  Data and Commentary provided by Fred Ashe, fromCitibank N.A.

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In the News

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5/2/12  StreetEasy Manhattan Market Report for April 2012:  StreetEasy Manhattan Condo Market Index shows that Manhattan condo market in March had a 0.8% increase over a year ago.  Contract volume jumped 11.8@ over a year ago, with the Downtown market showing the biggest increase in contract activity with 22.1% more contracts than this month in 2011.  Get the full report at 

5/17/12  City’s job gains in 2012 are best in 60 years:  New York City added 12,000 private-sector jobs in April, bringing this year’s gain to 60,000, marking the best four months since the 1950s, data released Thursday show. Unemployment rate dips to 9.5%.  Read the full article at Crain’s New York 

5/18/12  How’s the Weather Down There?:  New York, it seems, is entering a tall-buildings arms race. By 2016, New York could have 6 of the 10 tallest buildings in the country (with Chicago having the other 4), and 3 of the highest residential structures, according to the Council on Tall Buildings and Urban Habitat in Chicago.  Read the full article in the New York Times

5/18/12  One57 Penthouse sells for more than $90M, breaks the price record:  Gary Barnett has set a new record for a New York apartment sales price with the deal for a penthouse apartment as his One57 worth between $90 million and $100 million for the 10,923 square foot penthouse on the 89th and 90th floors of the new building.  Read the full article at The Real Deal

5/25/12  Now Coveted:  A Walkable, Convenient place:  As a neighborhood moves up each step of the five-step walkability ladder, the average household income of those who live there increases some $10,000. People who live in more walkable places tend to earn more, but they also tend to pay a higher percentage of their income for housing.   Read the full article in the New York Times Sunday Review Opinion Page.

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