Archive for Geezer Thoughts
Square footage: It’s a matter of opinion!
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I remember seeing a cartoon in the New Yorker Magazine Cartoon Bank showing two mice talking about the size of their in-wall apartment. One said to the other “Counting the space behind the pantry shelves, it’s eleven square feet.”
Nowhere is caveat emptor more applicable than when referring to the stated square footage of a Manhattan apartment. Many real estate sites have disclaimers like this: “Exact Dimensions can be obtained by retaining the services of a professional architect or engineer.” At best all stated square footage and dimensions are approximate. At worst they are deceptive and misleading.
It is part of the overall marketing plan with most brokers: clean up, de-clutter, professional photos, and professional floor plans. Brokers want to show the property in the most flattering light. A floor plan in black and white (lately I’ve seen 3D color floor plans), provides a visual that shows walls, doors, fixtures and open space.
In addition to the stated square footage, does the floor plan show the whole truth? Are columns shown in the proper location and proportion to the space? Are radiators and moldings shown? How about the thickness of the walls? Sometimes they are, sometimes not. While technically correct, some graphic designers will measure from wall to wall, without taking into account such things as moldings and radiators. But, these things eat into usable floor space. Many times columns and window and door placements, even wall thickness are just estimates based on educated guesses and knowledge of building practices for a particular building.
For more information on how floor plans are created, see the New York Times article here.
Week in Review: News You Can Use June 10, 2011
Posted by: | Comments- Foreclosures fall 38% in May for New York City according to data from PropertyShark.com, the total number of residential foreclosures fell last month from May 2010, however co-op apartments made up 79% of all new foreclosure auctions scheduled. Read it all in Crain’s New York
- Federal Reserve publishes Beige Book June 8, 2011 “The Second District’s economy has continued to expand since the last report, though at a somewhat diminished pace.”
- City’s Design Sector grew 75% the past decade: “More designers are employed here than in any other U.S. city, thanks in part to an explosion in recent years of Brooklyn-based companies, said the report, released on Wednesday by The Center for an Urban Future, a think tank in Manhattan. It noted that the number of Brooklyn-based firms spiked from 257 in 2001 to 433 in 2009, for a 70% increase”. Read it all in Crain’s New York.
- The Bullish Case for the U.S. Economy “Investment strategist Robert Doll says America’s edge is faster population growth, companies that are global in scope, and a culture of innovation and entrepreneurship.” Read it all in the Wall Street Journal.
New York Mansion Tax? I don’t live in a mansion!
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According to New York State, if the purchase price of an apartment is $1 million or more, you are buying a mansion! Therefore your purchase would be subject to a 1% Mansion Tax, calculated on the entire purchase price, not just the part that exceeds $1 million. Buy at $999,999.99 no tax; buy at $1,000,000.00 or more, and you’ll owe $10,000+ tax.
If you’re thinking you’re safe if the purchase price is less than $1 Million, but are paying fees or taxes that would have otherwise been paid by the seller, think again. Those fees become part of the consideration for the property and could lead to being responsible for the Mansion Tax.
According to Joel E. Miller, a Queens tax lawyer, although the mansion tax is not deductible, however it does increase the property’s tax basis so it will ultimately reduce the tax paid on a gain on the sale of the property.
All Real Estate is Local. Very, Very Local!
Posted by: | CommentsTruth, lies and statistics!
Earlier this month, Zillow released its Q1 Real Estate Report. Many in the press joined in and cried gloom and doom.
The hysteria was best summarized by a Curbed article that listed the 10 Most Depressing Things Mentioned in The Zillow Report. Perhaps real estate prices continue to decrease in Phoenix, Los Vegas, Tampa, etc., but in New York City, especially Manhatan, it’s just not the case.
You would be misled if you simply looked at the Zillow Home Value Index for New York Metro data and assumed it had anything to do with Manhattan Residential real estate sales.
| MoM | QoQ | YoY | |
| New York Metro | -.5% | -1.6% | -5.3% |
But if you focus on coops and condo sales which account for over 99% of residential properties sold in Manhattan vs single family homes , you’ll see that in New York City there have been significant price increases.
| MoM | QoQ | YoY | |
| New York Coop+Condo | +2.3% | +7.5% | +19.2% |
As previously discussed with regard to the Case Shiller report discussed here, the Case Shiller report excludes new developments, condos and coops. At least the Zillow report has that data available (perhaps not new development) but you have to dig for it.
All real estate is local. So local, in fact that certain neighborhoods, blocks, buildings and even specific apartments have their own hyper-local real estate data.
Mortgage Market Trends for week ending October 29, 2010
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MARKET RECAP
Were we smart or lucky? We’d like to think smart, but we won’t discount luck either. We are speaking of the housing sales trend that unfolded after the tax credits expired at the end of April. We noted back in May that we expected sales to dip post-tax credits, and they did. We also noted that we expected sales to rebound once the market became acclimated to standing on its own feet, and that appears to be occurring.
Indeed, sales of existing-homes strengthened across all categories to jump 10 percent in September to 4.53 million annualized units, while sales of new homes rose 6.6 percent to a 307,000 annualized rate. The surge in sales helped push supply down to 10.7 months for existing homes and down to eight months for new homes.
The obvious question is how much discounting was required to stimulate sales? It appears some discounting occurred, when holding sales composition firm. The national median price for existing homes fell 3.3 percent to $171,700, with the average price falling 3.5 percent to $218,200. Meanwhile, the median price for new homes rose 1.5 percent to $223,800, with the average price dropping 1.2 percent to $257,500.
We’ve been vocal in our belief that home prices have stabilized. We stand by that sentiment, even though we wouldn’t be surprised to see some price volatility over the next month or two, thanks to the brouhaha over the foreclosure processes of the large banks and the expectation that foreclosures could swell into 2011.
That said, it’s important to remember that the housing market is much more orderly and stable than it was a year ago. All the malinvestment and all the excesses of yesteryear have percolated to the surface. We know what we are dealing with, which means foreclosures will certainly be handled in manner that won’t be too disruptive to the market. After all, the people selling foreclosed houses still want to sell at the highest price possible; the highest price possible isn’t achieved by flooding the market with inventory.
As for the foreclosure-servicing issues, the NAR warned that a single related court order could take 20 percent of the homes off the market. We’re somewhat circumspect. To be sure, an unfavorable court order could happen, but the pressure is great for it not to. If we were to balance the odds on a scale, we think the scale favors it not occurring.
As for balancing lower or higher mortgage rates, we side with higher. That’s not just our opinion. Bill Gross, a highly respected bond manager at PIMCO, noted this past week that a Fed announcement on additional monetary easing “will likely signify the end of a great 30-year bull market in bonds.” In other words, Gross expects bond prices to fall and interest rates to rise, which would translate into higher mortgage rates.
Let’s Get On With It
The time for waiting has ended. Confidence will return; that is, if it hasn’t already returned. Merrill Lynch reported on Bloomberg this past week that Americans – at least those with a few dollars to invest – are feeling more financially secure today than they were a year ago. Merrill surveyed 1,000 people with investable assets of at least $250,000 and found that 78 percent of those surveyed are confident their economic circumstances will improve in 2011.
For everyone else, confidence is within reach. Claims for jobless benefits unexpectedly dropped last week to a three-month low, an optimistic indicator that the U.S. labor market is on the mend. What’s more, the total number of people receiving unemployment insurance dropped to a two-year low. Meanwhile, consumer spending – a direct measure of consumer confidence – continues to move higher, and could give employers reason to add workers ahead of the holiday shopping season.
We think this latest slate of good news portends a robust economy for the New Year, which is why we think the opportunity to take advantage of historically low mortgage rates and low housing prices is dwindling for this year.
Graph Courtesy from NY Times in an article by Lynnley Browning October 29, 2010. Data and Commentary provided by Fred Ashe, from DE Capital Mortgage.
Which Spot In Central Park Was Voted Most Romantic?
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As the snow falls heavily in Manhattan, I received an update from the Central Park Conservancy. Reminding me of Valentines Day (note to self: Send flowers to Les), I did wonder which was the most romantic spot in Central Park.
The answer? Bow Bridge. Check this and see what so many have said about Bow Bridge. Even in the snow of winter! Or read about Central Park’s most romantic stories.
The story behind Bow Bridge…
- Named for its resemblance to a violinist’s or archer’s — or Cupid’s — bow, Bow Bridge’s dreamy setting over the sprawling Lake has inspired many a lovers’ stroll.
- Designed by Central Park co-designer Calvert Vaux and his assistant Jacob Wrey Mould and built in 1862, Bow Bridge is the second-oldest cast-iron bridge in the United States. The Bridge spans 60 feet across the Lake, linking the cultivated and flowering landscape of Cherry Hill with the rustic and sprawling woods of the Ramble.
- Bow Bridge is one of the most photographed spots in the Park and is provides the romantic backdrop for many wedding proposals and classic film shots.
Don’t worry spring is on the way…
Back On The Market
Posted by: | CommentsThanks to the many friends, clients, customers and readers for showing your concern for my apparent absence from posting to the Real Estate Geezer.
As Boomers and DINKs, my wife and I have been fortunate enough to celebrate the holidays this year with my dad 84, my aunt who is 100 and my wife’s mom who is 94 years old.
But some things had changed. In early December 2009 my dad was diagnosed with pancreatic cancer and my aunt, although physically “healthy”, began having more difficulty walking, severe memory problems, and because caring for herself had become impossible she needed around-the-clock assistance.
Becoming a caregiver for our loved ones takes a lot of adjustment. Dealing with their doctors, Medicare, working with the pharmacies and the nurses’ aids is daunting and very time consuming. The emotional strain and the role reversal, if you will, as well as the financial aspects of getting old, made my wife and I look into ourselves, face our mortality and wonder what our lives will be like when we reach their age and have similar medical problems.
All this with the backdrop of the health care reform bill now coursing its way through congress. I must say, from what I understand, the bill does nothing to ease the financial and emotional strain of what millions of Boomers will be facing in the very near future. More on this when I actually get to read what the House/Senate reconciliation committees finally agree on — behind closed doors.
Well I’m back now. Back on the real estate market, so to speak. There is an order to things. My aunt’s nurses and Dad’s chemo therapy are scheduled. I give a wake up call to my father every day, bring him his breakfast, the morning newspaper and arrange his medication. And if he feels good that day perhaps we go for a short walk. I pick up my aunt’s mail give her a hug and hope she remembers who I am that day. Then I head to work.
Things make more sense now. Reading the New York Times blog The New Old Age has been very helpful. I feel less alone now. The support of the neighborhood and city infrastructure can be very reassuring. For example, The Lenox Hill Neighborhood House, only a half block from our apartment and where I was an after-school and day camp member over 50 years ago, was so helpful in assisting my dad and I in getting him Medicare drug coverage. They continue to offer invaluable help with assisted living ideas for my aunt and perhaps the eventual hospice care for both of them. And on good days, when both dad and aunt get out their apartments, they can visit with their friends at the senior center and have some lunch.
We’re lucky to live within four or five blocks of each other. We love our doormen who are an important part of our extended family. They show genuine concern, hold the elevator when dad is walking a bit slow, and even help us get a cab when the wind and snow make it difficult for even the sure footed to get around. They are just really nice! We love New York City because of the convenience, and yes, the small-own feel of the neighborhoods. We’re thankful for Fresh Direct and the convenience of being steps away from almost anything you may ever need or want.
I’ll file this under Boomers and will continue to update this story from time to time. If any of you are having similar experience, or just need some support or someone to speak with, please don’t hesitate to contact me. I’ll be more than happy to help in anyway I can.
Four Reasons To Buy and Invest In Manhattan Real Estate
Posted by: | Comments1 -The Numbers
- Manhattan residential real estate has performed better than the broader U.S. real estate market.
- Compared with losses of more than 40% for Los Angeles and San Francisco over the past few years, Miller Samuel reports in the third quarter 2009 Manhattan Residential Market Overview that the average price per square foot in Manhattan was $996 vs. $1289 as reported in the first quarter of 2008 , a price reduction of 23% from the peak.
- Third-quarter 2009 data show prices declined at a lower rate while transaction volume surged 46%, a sign that the Manhattan market is starting to find its bottom.
- As Donald Trump once said “It’s a water thing”. Manhattan is a landlocked island. While developers in most cities keep expanding outward, developers in Manhattan do not have this alternative.
- Wall Street firms are expected to pay a record $140 billion in bonuses this year according to The Wall Street Journal. Regardless of whether these bankers deserve their lavish bonuses, their payday will boost Manhattan real estate prices.
2 -Capital of the World
- 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.
- New York is often the first international destination new millionaires from emerging countries want to visit. It’s also one of the first places where they want to buy investment property or a pied-a-terre.
3- Diversity of Industry
- 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.
- If not for the diversity of the current New York City economy, the unemployment rate would be even higher than 10.3% that was reported in August.
- Sectors like education, health, leisure and hospitality have gained jobs, which partly offset the negative impact of the financial job losses.
4 -Quality of Life
- New York City is one of the safest cities in the US.
- The legal system is established and there is a better work-life balance compared with countries like China.
- Transportation in Manhattan via the Subway system is efficient and reduces commuting time for those living in Manhattan.
- The air in Manhattan is pristine compared to air in other global metropolises like Hong Kong.
Portions excerpted from NuWireInvestor reporting on a story written by Wei Min Tan of TheStreet.com
Boomers, Empty Nesters and Retirees – Welcome Back to Manhattan!
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There’s no grass-mowing or snow-shoveling. No need to endure the aggravation and expense of maintaining a couple of cars (unless you want to). Mediocre restaurant chains are few and far between, and commutes that run an hour or more are unheard-of. What could be better?
One of the city’s fastest-growing groups of residents is Baby Boomers (their clout is evidenced by the fact that their descriptor is usually capitalized, contrary to the basic rules of the English language). Often empty nesters and retirees, many of these folks have been languishing in suburbia after raising their lovely children, missing the City’s vibrant culture.
Manhattan, of course, is arguably the biggest and best cultural center in America. In fact, maybe, the world. We have it all – whatever kind of entertainment you prefer, some of the world’s best museums, great opera, symphonies, jazz clubs, theater and more great restaurants than most of us will ever have the chance to dine in.
People 55 and older make up more than 20% of the borough’s population and they’re on the verge of a major growth spurt. While the elderly population increases across the city, Manhattan’s share is projected to increase 57.9 percent over 2000 to 2030, to 295,000 people 65 and older in 2030 according to the New York City Department For The Aging which published this report.
The figures are great news for anyone who’s a Boomer, empty nester or retiree. It means Manhattan will continue to develop a fabulous array of the amenities you love the most. You also have a great choice of homes, from beautifully-detailed pre-war apartments to new condos and lofts with in-house fitness and business centers.
Yankees And Bronx Real Estate
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Yankees Win! NY Daily News photo
I’m not really a raving baseball fan but as long as Boston doesn’t win, I’m OK with whoever does.
John Massengale an architect and urban planner posted this brief history:
“The boss of the Yankees, George Steinbrenner, complained about parking and a perception of crime, and said he might move his team if the city didn’t build a new stadium for them. The then Mayor of the city, Rudolph Giuliani, proposed building a new stadium over a railyard on the west side of Manhattan, at a cost of $1,000,000,000.00.
The Bronx Borough President, the Honorable Fernando Ferrer, wanted to keep the Yankees in the Bronx by building what he called the Yankee Village.”
The rest is history as they say.
“The Yankees won. The world is right again,” team president Randy Levine said.
I was curious about how housing prices were doing in the Bronx since the construction of the new stadium so I visited Trulia’s Bronx Real Estate Overview
Average price per square foot for Bronx NY was $201, a decrease of 9% compared to the same period last year. The median sales price for homes in Bronx NY for Jul 09 to Sep 09 was $390,000 based on 443 home sales. Compared to the same period one year ago, the median home sales price decreased 11.9%, or $52,500, and the number of home sales decreased 8.8%.
There are currently 3,048 resale and new homes in Bronx on Trulia, including 43 open houses, as well as 1,390 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Bronx NY was $463,916 for the week ending Oct 28, which represents an increase of 0.7%, or $3,009, compared to the prior week. Popular neighborhoods in Bronx include Riverdale and Throgs Neck – Edgewater Park, with average listing prices of $654,112 and $456,530.
Trulia’s Heat Map and neighborhood by neighborhood residential sales details here.
Home Prices Continue to Improve While Consumer Confidence Declines
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All real estate is local.
As I previously discussed here, the S&P/Case-Shiller indices are virtually useless for tracking Manhattan residential sales. Case-Shiller does not include sales of co-op and condo apartments even though those property types account for 99% of what is sold in Manhattan.
The data through August 2009, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices show that the annual rate of decline of the 10-City and 20-City Composites improved compared to last month’s reading. This marks approximately seven months of improved readings in these statistics, beginning in early 2009.
This perceived improvement of real estate prices, if you can call smaller declines an improvement, is as irrelevant now as when I reported the uselessness of the S&P/Case-Shiller doom-and-gloom report back in June .
What I do believe is significant is that the Consumer Confidence Index as reported today by The Conference Board today dropped to 47.7 from a revised 53.4 in September. A measure of employment availability deteriorated to a 26-year low.
Unemployment in New York City (specifically in Manhattan) is very high. This fact, in addition to the seasonal slowdown in residential sales, will cause price reductions on properties where the sellers are motivated to move.
Harry Potter Buys Townhouse In West Village
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Daniel Radcliffe buys Manhattan townhouse in West Village
Daniel Radcliffe, the 20-year-old Wizard in Broadway’s Harry Potter production, has purchased his third New York City property, a five-bedroom, 3,000-square-foot West Village townhouse. The price: $6.4 million.
Celebrity publications report Radcliffe now owns more than $16 million in Manhattan area condos and apartments, plus a luxury condo in his home United Kingdom neighborhood of Fulham in London.
As reported by Real Estate Channel
It’s Halloween, Charlie Brown: A Few Tips for the Night of the Great Pumpkin
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Yes, Halloween is Saturday, so it’s time to finalize your Trick-or-Treat plan if you are old enough to give out candy, under 13 or the parent of same.
Here are some tips for celebrating All Hallows Eve in the city:
- If you welcome visits from all the little superheroes, pirates, witches and bumble bees in the building, make sure you’re apartment number is included on the list that should be posted in the lobby of your building.
- If your building doesn’t have such a list, suggest one to the super. It ensures that those who don’t welcome visitors won’t be disturbed.
- If you really don’t care how cute little Sara is going to be in her princess outfit, leave a supply of candy with your doorman with “Happy Halloween from 11A” taped to the side of the bowl. He’ll hand them out – and enjoy a few of the mini Snickers himself. (Be sure to mention it if you want your bowl back in the morning.)
- No doorman? Want to participate but don’t want to spend the evening traipsing back and forth to the front door? Leave a container of candy outside the door. Remember to replenish the offering as needed as long as your budget allows.
- If you live in a walkup, take pity on the frustration this causes for kids and parents – put a sign on your door to announce whether you are a treater. You might try to post a lobby list and let everyone add themselves at the appropriate spot, but messing with the list may be irresistible for kids between 13 and 30 (possibly 40 in some cases of arrested development – you know who you are).
- Make sure to give kids only store-bought, individually-wrapped candy, since wary parents will toss anything else. Trick-or-Treaters’ faves include chocolate bars, Skittles, and Tootsie Roll Pops. Kids today often are not fond of candy corn – yet another sign that times change. No one but dentists gives sugarless gum. It’s only once a year!
- In the process of shedding pounds or watching your weight? Buy only treats you dislike enough that you really, really won’t eat them, and be sure all extras get dropped off in a child household or taken to work on Monday.
Parents, here is some more information on how to Trick or Treat in New York City.
Happy Halloween!
Boomers and Empty Nesters Cry Foul on New York Daily News
Posted by: | CommentsIn an otherwise interesting article about the trendy set born between 1946 and 1964 flocking back to Manhattan in record numbers, the NY Daily News could have aroused the ire of many members of the Baby Boom generation.
The problem? A casual opening sentence that said those Boomers bring “plenty of gray hairs and wrinkles” to the trendy and sophisticated borough. Even the title is somewhat unfortunate: “Oldie but goodie: Retirees, empty-nesters flock to Manhattan – and thrive.”
Here’s some tongue-in cheek advice I’d give to the NY Daily News which is cluelessly unhip regarding Boomers and the empty nest crowd:
- Don’t even try referring to Boomers as old until you’re sure most of them are at least 80 – that will occur in about 2045. Boomers are Boomers, not oldsters! Being ahead of your time is often good, but not when describing Boomers.”
- 80 may be the new old. Until then, the Boomers may consent to being referred to as middle-aged.
- Female Boomers very rarely have gray hair, and Grecian Formula hasn’t been around since 1961 because nobody uses it.
- Be prepared for the Botox and cosmetic industries to rain scorn upon you. Wrinkles are not the in thing, and a multi-billion dollar industry is not going to take this sitting down. Spending on anti-aging cosmetic products has passed $75 million a year, and has been growing at about $8 million per year since 2004.
- Be careful – plastic surgeons and other specialists involved in anti-aging services will be launching random scalpels your way. Dermatologists and others will do heaven-knows-what – inject you with acne, perhaps? About 60,000 U.S. docs now profit from aging services, and anti-aging medical procedures are on track to surpass $15 billion per year by 2012.
Having assured my readers that I hear you, I’m off to start on an upcoming post about why Manhattan is a Mecca for the forever young. .
