Digestible Real Estate News
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, so enjoy some light real estate snacks so I can make this newsletter tax deductible.
1. Finally, an ending to the saga of the Flatiron building – it will be turned into condos! After the building fell on hard times, its fate was tossed around like a hot potato but has finally settled on the unsurprising resting spot of being converted to luxury housing. The Brodsky Organization bought a stake in the 22-story tower and now will lead the transformation, slated to take about three years between city approvals, demolition, and construction. Details are still murky but initial quotes have the project at 40 units and while the developers would love office space, the economic climate is pushing this solely towards residential.
2. And just like that, the city’s war against Airbnb is getting juicy: a property manager is suing their tenant for listing a rental on Airbnb, testing the city’s strict new guidelines for short term rentals. This fall, the city started enforcing licenses for short-term rental hosts, banned whole-home rentals, and limited guests to two per reservation. Following this, NYC listings dropped from ~20,000 in June to just 4,600 in September. Now things are getting spicy. An UWS property manager sued a tenant advertising on Airbnb and the platform itself, the verdict of which could have ripple effects. The lawsuit alleges the tenant violated her lease by hosting a short-term rental in a building that explicitly banned them in the lease. The city’s new rules deny licenses if a building already prohibits them. This case tests the consequences of the regulations, becoming the first to “compel compliance” for hosts and operators, as right now landlords are the one stuck with having to enforce the law.
3. Times Square is one of the most iconic spots in New York yet it is unanimously the neighborhood New Yorkers make a point to avoid at all costs. Curbed explores a new book that covers the real estate bets that shaped the neighborhood, giving it a dimensional history and softer edge. While Times Square history isn’t a popular one (however I touched on it a few years ago on my blog for an easy catchup…) and everyone has tried to forget the utter chaos of the 1970s (except for – also – on my blog), the neighborhood does have some conversation starters, like when Disney tried to tame 42nd Street, and for my picture lovers, how the neighborhood has evolved from 1898.
4. We are all aware that history repeats itself in every faucet of life, seeing that low rise jeans have made their return against all odds; however in the real estate world, many are heralding the present market as an eerie Déjà Vu to the 1980s housing market. Starting in the late 1970s, boomers were aging into their home-buying years, providing a wave of demand. Since millennials are “an echo” of the boomers, currently aging into their home-buying years, there seems to be a mirroring effect. Eerily the housing market today also faces a recession very similar to that of the late ‘70s/early ‘80s, with interest rates soaring as the Fed fought to rein in the “Great Inflation.” As a result, mortgage rates increased to a peak of 18% in 1981, causing homes to become less affordable and home sales to fall. By October 1982, inflation had fallen to 5% so the Fed allowed the federal funds rate to fall back to 9% and along with it came mortgage rates. The housing market did rebound from the 1980s, but it took time. Similar to the 1980s, mortgage rate stability, even if the stabilization occurs with higher rates, is the key to an housing recovery. An interesting graph below for all of you who learn better with images:
5. Just when we got used to Spotted Lantern Flies: Giant Spiders are most likely going to start parachuting into New York this year. And we thought we’d get a break in 2024…
And for the two homes I’m ogling this month…
…a nearly 5,000 square foot townhouse nestled in the heart of the West Village at 48 Commerce Street going for $10,000,000…
…a stately brownstone dripping in sinful historical detailing located at 126 Pierrepont Street in Brooklyn Heights and listed for $15,000,000…
