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Douglas Elliman released the October 2013 report for Manhattan & Brooklyn Residential Rental Markets.  The October 2013 Elliman Report for the Manhattan & Brooklyn Rental Markets reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.

 “Manhattan rental prices weakened, caused by summer sales surge that poached demand” Mahattan_Brooklyn_Rentals_10-2013

This summer’s record sales activity pulled some of the demand from the Manhattan rental market, causing prices to slip slightly from prior year levels. Vacancy rates rose to more normal levels as marketing times and negotiability remained tight and the use of landlord concessions were limited. We don’t expect much relief in rental prices for tenants anytime soon as the economy continues to improve and mortgage lending conditions remain tight.

  • Median Manhattan rental price for October fell 1.6% below the same month last year to $3,150.
  • This decline was the second consecutive year-over-year drop, following the September drop that broke the 26 consecutive month record without a decline.
  • The use of landlord concessions in Manhattan remained limited, used in only 3.7% of all new rentals with an average rental equivalent of 1.2 months.

As they have for most of 2013, Brooklyn’s rental prices continued to rise. The pace of the market remained fast, with rapid marketing times and less negotiability than we saw last year. New rental activity was brisk, as tenants continued to resist rental price increases at time of lease renewal, seeking out greater affordability but with limited options. We anticipate tight market conditions through the remainder of the year

  • Other than last May, in Brooklyn all monthly year-over-year rental price indicators have not declined in 2013.
  • Brooklyn median rental price rose 6.8% to $2,699 over the prior year quarter.

Douglas Elliman released the Third Quarter report for Manhattan Residential Co-op and Condo sales market.  The Manhattan Sales Quarterly Survey of Co-op & Condo Sales for 3Q-2013 reported here  and summarized below was prepared by Miller Samuel for Douglas Elliman.


“The third quarter was a period of records and near records as sales surged and inventory fell sharply.”


Our third quarter housing market was one of the most active in decades. Manhattan experienced the second highest number of sales in more than 24 years and the most sales in six years. Our agents helped buyers navigate rising mortgage rates, bidding wars and the lowest inventory in 13 years. It’s an exciting period for our real estate market as we look forward to continued improvement into the next year.

  • The 3,837 sales in the third quarter were 30% above last year’s total and second highest only to 3,939 in the second quarter of 2007.
  • Listing inventory dropped 21.9% to 4,567 from the prior year quarter, the lowest since it was tracked in 2000.
  • The sales share of 1-bedroom apartments reached 40.5%, a 15-year high as co-op sales expanded to 62% share 9-year high. The shift to lower priced units in response to rising rates caused overall median sales price to slip 2% although individually, co-op and condo median sales price rose 0.8% and 3.7% year-over-year.
  • Days on the market, the number of days from the last price change to the contract price, collapsed to 88 days from 191 days in the prior year quarter. The elevated year ago level reflected the absorption of languishing older listings as inventory began to fall sharply.
  • Listing discount, the percentage difference between the list price at time of sale and the sales price, fell sharply to 2% from 7.2% in the prior year quarter.

In 1971, the city launched the 421a program as an incentive for developers to build projects on underused or unused land.  Today, a record number of condos have a 421a status.  Ranging from 10 years duration below 96th Street to 15-25 years in Upper Manhattan, the exemptions do have an expiration date.  The exemptions start to decrease annually after the first two years, which usually means rising common charges.

Historically, condos will sell for a higher price if the common charges are low.  While in development, the developer will set the rate for the monthly charges until a board is in place.  Luxury buildings with high-end amenities like rooftop decks, concierges, etc. may have lower common charges while the 421a Tax Abatement is in force.

Once the tax abatement expires, condo boards are generally scrambling to find ways to reduce costs.  Some condo bards have taken the drastic action of terminating their contracts with property management and hiring an on-site manager.  This extreme step takes a dedicated hands-on board to oversee the manager, decrease costs and look for ways to raise revenue.  Board members are generally volunteers, so finding people willing to give their time for the community is sometimes difficult

Some condo boards find other ways to chip away at the expenses; cutting staff, renegotiating mortgage rates, installing high-efficiency lighting in the common areas, and other similar strategies. Some cost-cutting measures come with risk of reduced services, but the upside remains – lower common charges generally create higher selling prices.


Inspired by The Real Deal Article by Hayley Kaplan

Douglas Elliman released the August 2013 report for Manhattan & Brooklyn Residential Rental Markets.  The August 2013 Elliman Report for the Manhattan & Brooklyn Rental Markets reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.

“The Manhattan rental market has not seen a decline in rents for 26 consecutive months.”Aug_2013_M&B_Rental

  • The Manhattan median rental price increased by 1.8%, to $3,150 from the same month last year. The last time this metric posted a decline was in June 2011, an unprecedented 26-month run. Concessions from landlords continue to be rare with only 2.5% of all new rentals offering some sort of special rewards, averaging the equivalent of 1 month of free rent.
  • Over the past several months, rents in Manhattan continued to rise, but at a much slower rate than we experienced earlier in the year. The number of rentals jumped this month as tenants sought greater affordability at the time of lease renewal. Negotiability and marketing times were low as the use of concessions by landlords remained rare. The tight mortgage lending and improving economic conditions are both helping to keep rents near record levels.
  • Median rental price in Brooklyn increased 4.6% to $2,850 from the same month last year, reaching a 5-year high. Average rental price and average rental price per square foot increased by 3.6% and 6.9% respectively from the same period last year
  • The number of new rentals in Brooklyn surged from this time last year as tenants sought relief from the rising rental prices. More potential tenants did this by seeking new places to rent in lieu of renewing existing leases. The price of a rental reached the highest level seen in over five years. Properties have been renting at a faster pace as negotiability continued to decline, consistent with the tight market.


Brooklyn Rents on the Rise – Rivaling Manhattan Prices

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Brooklyn, once thought of as the affordable alternative to Manhattan, is seeing a steady climb in rental prices.  Especially in the Williamsburg, Greenpoint, Brooklyn Heights and Cobble Hill neighborhoods, the average rent climbed to $3,035 in July, an 8.2% increase according to the Elliman Report for Manhattan and Brooklyn Rentals for July 2013.

Long time Brooklyn residents are concerned about being priced out of the market as more and more people are finding Brooklyn to be their primary option when looking at rentals, causing demand to go up, along with the prices.  Manhattan’s rents have been rising for more than two years, but the growth seems to be slowing.


Excerpted from NY Post column 


Tax breaks on Second Homes

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Second homes or Pied-a-Terre’s often offer owners tax breaks that are similar, but not identical to, those for primary residences.  You may also be able to earn additional income that could help the bottom line tax.  The second home could be an attractive investment when you consider the potential for long-term appreciation along with the potential income and tax breaks.

You should consult with a qualified tax attorney or CPA when trying to figure out tax implications on transactions involving real estate.  The laws change frequently, and they can keep you apprised of the latest information and help you maximize your tax advantages.

In general, how it works:

  • Mortgage interest up to $1 million of “acquisition indebtedness” incurred when buying the primary and on additional interest can be deductible.  If your combined mortgages exceed $1 million, the interest paid on the first $1M could be deductible.
  • Second homes can be timeshares, yachts, motor homes, as long as it includes sleeping, cooking and bathroom facilities.
  • Gains from selling a second home are generally taxed as a short-term or long-term capital gain.  While the sale of a principal residence can be excludable, gain on the sale of a vacation/second home is not.  Recent rule changes limit the amount of prior gain on a vacation/second residence that can be sheltered if that home is converted to a primary residence.
  • Vacation Home Rentals – many owners rent vacation homes to earn income and help pay for the cost of owning the home.  These rentals are taxed under one of three sets of rules depending on how long the homeowner rents the property.
    • Income from rentals totaling not more than 14 days per year is nontaxable under current guidelines.
    • Income from rentals totaling more than 14 days per year is taxable and is generally reported on Schedule E Supplemental Income and Loss on your 1040.  Homeowners who rent their properties for more than 14 days can deduct a portion of their mortgage interest, property taxes, maintenance, utilities and other expenses to offset that income.  That deduction depends on how many days they use the residence personally versus how many days they rent it.
    • Owners who use their home personally for less than 14 days and less than 10% of the total rental days can treat the property as true rental property if certain rules are followed.


This post is provided as informational purposes only and should not be construed as legal, accounting or tax advice by the RealEstateGeezer. You should seek advice from a qualified professional.


Excerpted from Presti & Naegele Accounting Offices newsletter


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Douglas Elliman released the July 2013 report for Manhattan & Brooklyn Residential Rental Markets.  The July 2013 Elliman Report for the Manhattan & Brooklyn Rental Markets reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.

“Although the rate of Manhattan rental price growth shows signs of easing, vacancy rates are low and rents remain at high levels”M&B_Rental_07-2013

  • Manhattan rents have been pressing upward for two years now without a break, but the rate of growth has been slowing. There were less new rentals than a year ago as landlords and tenants were more likely to agree on a lease renewal. Marketing time and negotiability remained low. Improving economic conditions and tight credit are expected to keep rental prices elevated.
    •  Manhattan median rental price moved 1.1% higher to $3,042 from the same month last year. Average rental price also posted a modest gain, rising 1.7% to $3,822 over the same period. Only 3.1% of rental transactions during the month had some form of landlord concessions. When a concession was provided, it was the equivalent of 1 month free rent, up from 0.8 months free rent in the prior year period.
  • Brooklyn continues to show a faster pace of rising rents than Manhattan. Demand from those priced out of Manhattan and would-be buyers who don’t qualify for purchases with today’s tight lending standards have tipped the balance toward rising prices. Marketing times remain fast and negotiability has fallen sharply. Like Manhattan, we expect more of the same conditions in the coming months.
    •  All rental price indicators continued to show year-over-year gains. Median rental price increased 5.1% to $2,675 from the same period last year. Average rental price expanded by 8.2% to $3,035 and average price per square foot increased 6.4% to $37.66 respectively from the prior year period.

Douglas Elliman released the June 2013 report for Manhattan & Brooklyn Residential Rental Markets.  The June 2013 Elliman Report for the Manhattan & Brooklyn Rental Markets reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.


“The rate of rental price growth is beginning to show signs that the pace seen over the past two years might not be sustained”


  • After two months of slowing price growth in Brooklyn, there was a jump in rental prices for June, the largest gain in nearly a year. The rise in rents was consistent across all sizes. Properties are taking somewhat longer for landlords to rent and negotiability was basically unchanged from this time last year. Similarly to Manhattan, we don’t see much weakness in the direction of rental prices over the coming year.
  • There wasn’t much relief for Manhattan renters in June. Median price edged up slightly as rents remained at high levels and landlord concessions such as free rent were rare. Although negotiability remained unchanged, it is taking a bit longer than last year for landlords to rent their apartments. We don’t see much change on the horizon as tight credit and rising employment are expected to continue over the next year.

Douglas Elliman released the September 2013 report for Manhattan & Brooklyn Residential Rental Markets.  The September 2013 Elliman Report for the Manhattan & Brooklyn Rental Markets reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.

“The heavy Manhattan sales volume siphoned off some of the excess demand in the rental market causing prices to slip.”M&B_rentals_09-2013

 After more than two years of rising rents, Manhattan prices slipped a bit as compared to last year. Rents haven’t been rising as quickly as they did in the previous year and the mortgage rate jump last spring pulled many would-be renters into the sales market by the end of the summer. Landlord concessions continued to be rare, but tenants continued to resist rent increases at the time of lease renewal by seeking better affordability if it could be found. With rising mortgage rates and tight credit we expect rents to remain at a plateau for the coming quarters.

  • Median rental price slipped 3.1% to $3,095 from the same period last year. This was the first year-over-year decline since June 2011, as heavy sales volume pulled more renters into the purchase market, incentivized by concerns over rising mortgage rates. The use of concessions by landlords remained limited to 2.7% of new rentals, averaging a 1.2-month rental equivalent.


Brooklyn rental prices continued to rise at a fast pace reaching their highest level in five years. Marketing times were faster and there was limited negotiation of list price. An increasing number of renters challenged by higher prices were seeking out affordability rather than renewal. We expect this trend to continue into next year.

  • Median rental price increased 10.4% to $2,800 from prior year levels, second only to the prior month which had been a 5-year high.

Douglas Elliman released the May 2013 report for Manhattan & Brooklyn Residential Rental Markets.  The May 2013 Elliman Report for the Manhattan & Brooklyn Rental Markets reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.

“The rate of rental price growth is beginning to show signs that the pace seen over the past two years might not be sustained.”M&B_Market_May_2013

Strong price growth has defined the Manhattan rental market for the past two years. Landlord concessions remain rare and vacancy rates are still very low. Marketing times remain short and there is limited negotiation on price. The key drivers of high demand include improving New York City economy and tight mortgage lending conditions, both of which are expected continue through the year.

For the second consecutive month, Brooklyn rental price growth slowed from year ago levels but it is not yet clear whether this is a sustainable trend.  The market has enjoyed strong growth for much of the past two years and the number of new rentals jumped as more tenants opted to search for affordability rather than renew. The key drivers of tight credit and rising employment remain firmly in place and we expect Brooklyn rents to remain elevated over the near term

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Douglas Elliman released the April 2013 report for Manhattan & Brooklyn Residential Rental Markets.  The April 2013 Elliman Report for the Manhattan & Brooklyn Rental Markets reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.

“Rental prices continued to trend higher, despite rising affordability of home purchases.”

Year to date, Manhattan rents continued to rise at the same brisk pace as last year. The gains in rental prices have been consistent across allManhattan_Brooklyn_Rental_Report apartment sizes compared to a year ago. Landlord concessions were used sparingly and the vacancy rate remained below long-term averages. The continuing strength of the rental market has been somewhat surprising since the Manhattan sales market has also seen rising prices and sales volume. Tight credit conditions and an improving regional economy continue to keep pressure on the demand for rental housing

  • Since the beginning of 2013, rental prices continued to push higher.
  • Median rental price jumped 6.5% to $3,195 from the same period last year, but was unchanged from the prior month.
  • The average year-over-year increase in median rental price has been rising since the beginning of 2013, averaging 5.1% year to date.
  • The vacancy rate was 1.58% in April, exactly the same rate in the same month last year, but below
  • The 1.7% 5-year monthly average.


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The New York Department of Buildings shares the following tips for recognizing an illegal apartment:

  • Windows – Legal rooms require windows with a minimum size of 12 square feet.  Total window area must be 1/10th of the room size.  For example: a 100 square foot room must have at least 12 square foot (the minimum allowed) of window area.
  • Rent – Rents that are significantly lower than comparable apartments
  • Egress – Tenant should be able to access all available exits either directly from the unit or a public hallway.  To be legal, the apartment must have two means of egress.
  • Utilities – A listing in which utilities are included in the rent may be a way to prevent the disclosure of an illegal apartment.
  • Mail – Tenants should be able to receive mail at the building address and should not be required to obtain a separate P. O. Box.

If you suspect the apartment you are considering may not be legal,  you should request a copy of the certificate of occupancy for the building that shows the apartment is legal.  In addition you can search the Department of Buildings’ Building Information System (BIS) for most recent certificate of occupancy to check the stats of the apartment.


When Foreign Persons Sell

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In New York real estate sales there is one sure bet; you will pay taxes.  Whether you are a US tax payer or a foreign investor, the State of New York and the US Government will get their cut.

The question is when will you have to pay up?  The rules are a bit complicated, but one of our favorite legal bloggers, Jerry Feeney explains it like this:

For New York State: people who sell real estate in New York State, whether they are individuals, trusts, estates, or LLCs, must pay the tax at closing on the estimated gain as a condition of the sale, unless they are exempt from payment at closing.  Most transactions are exempt.  However, the exemption is only about the timing of the tax payment, not the obligation to make the payment.   Make no mistake; the seller is accountable to the taxing authority to account for the gains.

If you are a New York State resident, and/or the property being sold was the principal residence of the seller for 2 of the last 5 years, the exemption from paying at closing applies.

For example:  A seller who has owned a condo in New York City that is used as a second home, and is a New Jersey resident must fill out the applicable tax foand remit the tax payment on the estimated gain from the sale or they cannot close.  This is a very good reason to have a good accountant on retainer.

For United States Taxes, people who sell real estate in the United States must also certify at closing if they are exempt from the federal withholding requirement on real estate unless the sales price is $300,000 or less and the property is acquired for a primary residence.  If not, the seller must certify that they are exempt from withholding.  Face it, most New York City real estate is over $300,000.  There are 2 ways the seller could be exempt; if they are U. S. citizens, or resident aliens.  Others are ‘foreign persons’ under the statue and must withhold 10% of the purchase price unless they have obtained a withholding certificate from the IRS approving a smaller withholding.  These certificates can take up to 90 days to obtain, sometimes more, so be sure your attorney starts the process early to ensure a smooth closing.

For Example:  A Canadian citizen who does not have any immigration status in the U.S., and who sells an investment property would be required to have 10% withheld at closing, which must be remitted to the U.S. Treasury.  This seller would then need to file a U.S. Tax return for the year that the property was sold, regardless of whether they have any other U.S. income.

It is vitally important that your team include a qualified attorney and accountant to help you navigate these treacherous and complicated waters.

Based on article by Jerry M. Feeney,  Esq., Residential Real Estate Attorney.

This post is provided as informational proposes only and should not be construed as legal, accounting or tax advice by the RealEstateGeezer. You should seek advice from a qualified professional.


Douglas Elliman released the March 2013 report for Manhattan & Brooklyn Residential Rental Markets.  The March 2013 Elliman Report for the Manhattan & Brooklyn Rental Markets reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.


“Since the beginning of the year, the rental market has found its second wind, resuming a higher rate of price increases.”Mar_2013_Manhattan_Rental


Manhattan:  For the past three months, the year-over-year rise in median rent price has increased. After bottoming to 0.8% in December of 2012, the percentage changes for January, February and March of 2013 were 2.6%, 4.7% and 6.7% respectively. The vacancy rate fell to a 2-year low of 1.46% in March 2013 from 1.89% in the same period last year.


Brooklyn:  Though 2013 began with no growth in the year-over-year median rental price, rents resumed rising with a 7.2% gain in February, followed by an 11.3% increase in March.


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This week, Elliman released the February 2012 Elliman Report for Manhattan & Brooklyn Rental Markets.   The Rental Market Report summarized below and reported here   was prepared by Miller Samuel for Douglas Elliman.

“Despite the more modest pace of rental price gains at the end of 2012, a more rapid pace has returned in 2013.”

The pace of rising rents in Manhattan cooled at the end of 2012, but returned in February with even stronger gains. We expect the improving economy, low vacancy rates across most markets, and tight credit conditions to continue placing upward pressure on rents in the coming months. However, with rents already at or near record highs, and low mortgage rates turning more would-be renters into first time buyers, rents may not see the same rapid rise throughout the year.

  • After four consecutive months with an average of 1.6% year-over-year price gains, median rent rose 4.7% from prior year levels to $3,190. Average rental price also expanded at a similar pace, rising 4.9% from year ago levels to $3,956.
  • After 7 months of year-over-year declines, the overall Manhattan vacancy rate was unchanged from its 1.69% year ago level.

After taking a breather in January, Brooklyn rental price indicators began to once again rise at a quicker pace in February. The number of days it took to rent a property fell and landlord concessions were rare, as the rental market remained tight. Rents rose quicker for larger apartments, as would-be tenants of smaller rental apartments continued to shift to the purchase market, enticed by record low mortgage rates. We anticipate rents to remain high this year as the economy slowly improves.

  • After last month’s more modest gains, the rental market resumed robust price growth in February. Median rent increased 7.2% from the same month last year to $2,590.