Digestible Real Estate News
Royal Tenenbaum bought the house on Archer Ave in the winter of his 35th year. I paid a visit in the winter of my 32nd.
We’re keeping this recurring piece to do a bit more for those genuinely interested in New York real estate and give my LinkedIn designation a little luster. Taking a note from the easy to absorb nuggets of information in Robinhood Snacks‘ newsletter, here are your RealEstateSnacks so I can make this newsletter tax deductible.
1. Remember Jerry Seinfeld’s famous Op-Ed mid-pandemic, “So you think New York is ‘dead'” – well, didn’t that end up being the wonderful truth. The real estate market in both Manhattan and Brooklyn has exploded, with people pouring back into the city to both buy and rent. The “exodus from New York” that naysayers-of-the-city have been waiting FOREVER to harp turned out to be just smoke and mirrors. In March, around 1,500 Manhattan residences were in contract for sale. That marked the highest number of deals for any one month in 14 years. This month, the number of people returning to the city is expected to outpace those jumping ship. What does this mean for the market? The window for apartment hunters to nab a great deal, either for leasing or for purchasing, is rapidly closing: signal the beginning of a power shift. What has been a buyer’s market is morphing into one in which buyers and sellers feel equally empowered, if not sellers are gaining the upper-hand. The luxury market is still trading ~10% under ask-price, however we’re seeing multiple bids for units priced at $2 million and under. With so many buyers in the marketplace, any potential negotiation gap is evaporating. With regards to leasing, concessions are falling off and broker’s fees are back in the picture as demand is sky-rocking. Scariest thing is we’re not even close to the busiest part of rental season…hold onto your hats for the ever-spicy June 1 move-in date…
2. Leading the drama in the luxury market, 432 Park Avenue, the crown jewel of the recent high-end condo boom with a penthouse that sold for $88 million, is in the middle of a hellish nightmare, causing many owners to sue and resale value in the building to go up in flames. The building that was the destination of top billionaires during its construction is now racking up a public list of horrors: millions of dollars of water damage from plumbing issues; frequent elevator malfunctions; walls that creak like a ship and the ghostly whistle of rushing air in doorways and elevator shafts; annual common charges that jumped nearly 40% due to repairs; a yearly requirement at the private Michelin star restaurant that skyrocketed from $1,200 to $15,000, despite limited operation; and the building’s insurance costs that ballooned 300% in two years. Poor Billionaires.
3. Unlike the real estate boom that led to the Great Recession, the current nationwide price spike is not being fueled by a wholesale collapse in lender ethics. There aren’t any low-doc or no-doc loans to be had and borrowers are having to do much more than simple tricks to get funding. Supply and demand fundamentals are largely to blame for rising prices, as most markets have been unable to shake a chronic lack of supply for years. But most agree that the rate at which prices are appreciating isn’t sustainable; at a certain point, interest rates will rise and there won’t be enough buyers coming in from more expensive markets to pay the higher prices. If homeowners can’t sell or refinance, there could be a spike in the supply of homes on the market, pushing prices back down.
4. From a national standpoint, the U.S. housing market is suffering from its lowest supply in history, and that is taking an increasingly hard toll on sales. Pending home sales, a measure of signed contracts on existing homes, fell a wider-than-expected 10.6% in February compared with January, according to the NAR. Sales were 0.5% lower year over year. There were just 1.03 million homes for sale at the end of February, a 29.5% drop compared with February 2020. That is the largest annual decline ever and the lowest supply on record. But you know what this means….absolutely crazy inflation in prices.
And for the two homes I’m ogling this month…
…the most jaw dropping living room in TriBeCa’s 286 West Broadway Apt 1/2C, listed for $7,995,000…
…the most…insane townhouse in Cobble Hill at 195 Congress Street listed for $12,950,000, that has 3,500 square feet of outdoor space…One of its multiple outdoor spaces:
