Cities Where Rents Are Skyrocketing

With rental rates increasing across the country, new numbers were published real estate data sources, that indicate mixed reasons for the increases. According to the housing data for the top one hundred markets, sales prices have barely increased, while rental prices are up an average of five percent from April 2011.

An examination of the data by 24/7 Wall St. shows a diversity of influences on the increased rent prices. An increase in asking rents of more than ten percent landed these six cities on the list of markets where asking rents far outpace asking sales prices:

• Edison-New Brunswick, New Jersey
• San Francisco, California
• Miami, Florida
• Warren-Troy-Farmington Hills, Michigan
• Indianapolis, Indiana
• Colorado Springs, Colorado

Economists could not credit any one factor for the rising rents. Rather, a mixture of different factors created a perfect storm in each location. The main ingredients included: lower price declines during the recession, an increase in job growth and a decrease in available listings.

Markets where sales prices remained more stable during the recession, such as Indianapolis (a decline of only 6.6%) or Colorado Springs (down just 11%), show only modest job growth (1.49% and .53% above the national average, respectively). Available listings, however, fell by more than 25% in Colorado Springs, bumping up asking rental prices by more than ten percent. The data for Indianapolis is less clear, where the increase rents increased over 11%. One likely cause: the newly employed tend to rent rather than buy until their employment is more secure.

The data for the Warren-Troy-Farmington Hills area of Michigan and Miami, Florida correlates to the massive decline in sales prices during the recession (over 35% in Michigan and more than 45% in Florida). While both areas are experiencing rates of job growth above the national average (2.53% and 2.34%, respectively), in Michigan, rents have increased nearly 12% while sales are only up 6.9%. In Florida, the increase in rents (12.3%) trails the increase in sales pricing, which is up 16.1%.

San Francisco, boasting job growth of nearly 3% has rents increasing 13.2%, but a sales price decline of a half a percent. A similar scenario in terms of increase rents and decreased home prices has the rent prices in the Edison-New Brunswick area up over 15%. But, with job growth in the New Jersey market is less than one percent and sales prices down by 4.7%, shows a less obvious correlation between job growth and rent increases, so seemingly there are other factors in play—commuting costs, perhaps?

At Over $90 Million, Sale of Midtown Penthouse Sets a New York Record

Topping the previous record $88 million purchase of the 15 Central Park West penthouse, an unnamed buyer arranged to purchase the duplex penthouse at One57, a Midtown tower. According to developer Gary Barnett, president of Extell Development Company, the 10,923-square-foot penthouse, comprising both the eighty-ninth and ninetieth floors will be home to a “very nice” and “recognizable” family whose origin he declined to identify. While citing an agreement to keep the exact price confidential, Barnett claimed that while the agreed to price surpasses the earlier record, it does not break the elusive $100 million barrier for New York City residential purchases.

Currently under construction, the property known as One57, with the Park Hyatt hotel situated beneath the condominium units, will join the company of New York City’s highest residential buildings once it is completed in 2013. Nearly half of the available 92 apartments already have buyers since they became available for purchase in December 2011, says Barnett. Its location is 157 West 57^th and boasts views of Central Park’s southern vista.

The purchase, kept secret for more than three months, supersedes the Central Park West deal in total prices, but calculates to about $8,000 per square foot, as compared to the $13,000 per square foot paid in the previous record-breaking sale. That purchase caused upheaval in the city’s luxury apartment market. Barnett believes the appropriate price-point per square foot for “superluxury” apartments in similar locations and with similar appointments in the City should be closer to $10,000, and has since increased the price for other One57 penthouse units accordingly.

The opulent floorplan includes a grand salon with 23-foot high ceilings. Another available unit, the Winter Garden, a 13,500 square foot duplex with a separate solarium, was the subject of negotiation earlier. The potential buyer wanted to purchase both that unit and an additional entire floor. The conjoined space, floors 75 to 77, would comprise 20,000 square feet. Barnett divulged that the asking price would have broken the illusive $100 million hurdle. For undisclosed reasons, the deal fell through.

Although not revealing the buyer’s nationality, developers and brokers have indicated that foreign nationals from countries as diverse as the former Soviet Union, China and Brazil see owning top dollar homes in New York and Miami as a coveted prize. As such, their willingness to spend ever-increasing amounts to acquire these so-called “trophy” properties has fueled a buying spree.

East Village NYC in Focus

East Village NYC in Focus

Known for its reputation as a bastion for Beatniks in the 1950s and later, the birthplace of punk rock and hip-hop, the City’s center of counterculture, grew out of earlier roots as a neighborhood of working class Polish and Ukrainian immigrants. The 1960s ushered in a new era however, and the community redefined itself as East Village. The onetime lower rent haven attracted creative poets, musicians and coffee house patrons. Jonathan Larson’s long-running Broadway rock musical and movie Rent, portrays the neighborhood in the early 1990s; exposing the East Village neighborhood to the world as home to a collection of artists and activists, filled with drugs and crime, and ravaged by the AIDS epidemic.

East Village Now

In the new millennium, its storied past is slowly giving way to gentrification: newcomers, attracted by its interesting past and eclectic diversity acquire property and increase the demand for rental space. The result has both raised the price of housing and increased the goods and services available in the community.

In the East Village, still known for its high concentration of bars, night life and restaurants, retail is now more diverse and newer housing options make it an interesting, if less gritty, place to call home, especially for younger buyers.

Boundaries

Generally bounded on the west by Broadway and the Bowery and continuing east to the East River, the East Village begins at 14th Street and ends at Houston Street, but does not actually have defined boundaries. It includes the smaller communities of Alphabet City, Loisaida, St. Marks Place and the Bowery.

Nature

The main green spaces are the 57-acre East River Park and Tompkins Square, former drilling grounds for the New York National Guard and site of 1960s-era war demonstrations and the highly publicized rousting of the homeless in the late 1980s. The park underwent massive renovations in the early 1990s, and now is notable for its first-in-New York City dog run and as popular gathering place for young families, students from nearby New York University and seniors. Amenities added include playgrounds, handball and basketball courts, ping-pong tables, and permanent outdoor chess tables. More recent refurbishment added three swimming pools, picnic grounds and a bathing area for pets.

Places to Eat

Popular eateries span most nationalities comprising varietal offerings from Venezuelan (Caracas), Scandinavian (Vandaag), Austrian (Edi and the Wolf), and all ethnicities in between, including the historic Ukrainian East Village Restaurant.

The East Village is served by subways 4, 5, 6, F and L, and bus lines M8, M9, M14, M15 and M21.

How to Deal with Wind in a High Rise Balcony Garden

There are many great reasons to live in a high rise apartment building – not the least of which are the stunning views of the landscape below.  But if you live in a high rise and have tried keeping plants on your balcony, you have undoubtedly discovered one of the challenges of living in a high rise – exposure to harsh winds.  Wind can dry out your pots very quickly, or even knock them over.  It can shred the leaves of your plants or break their stems.  If you are high rise gardener, don’t give up!  There are steps you can take to help combat the wind, and plants you can choose that are better suited to your unique conditions.

Coping with the wind

A great way to help combat the wind is to create a wind break on your balcony.  You can either install clear plexiglass panels to the railing, or if that isn’t to your taste plant hedges in planter boxes along the perimeter of your balcony.  Strategically place the boxes in the areas where the wind generally comes through, such as on the east side.

To prevent your planters from drying out, add mulch.  Use heavier materials such as pebbles or river rocks so that they don’t blow away.  Fill your pots with soil to two inches below the lip, and then add an additional one inch layer of mulch.

Use pots made with durable materials.  Avoid unglazed terracotta planters.  Terracotta dries out faster than other materials.  Wood is the best choice, and can also be secured to railings by screwing in an eye hook and looping a short length of chain or rope through the eye and around the railing.

Also consider having a few large pots instead of several smaller pots.  Smaller pots are lighter and can be knocked over more easily, which could potentially break them or damage the plants.

Great plant choices for balconies

There is actually a great variety of plants that can withstand the conditions of a high rise balcony.  Below are just some of the choices available.  You can also ask the staff at your local garden center for plants suitable to your conditions.

Floribunda roses are both beautiful and sturdy enough to handle the wind.  They will even flower with less than six hours of sunlight, making them ideal for balconies with tough conditions.

Bayberry tolerates wind, cold, shade, and virtually ever other situation you throw at it.  It would work very well as a wind break, and in the winter it has blueish-white berries.

Honeysuckle vines are cold tolerant and will happily attach themselves to balcony railings.  The wind will actually help keep them from developing mildew, which is a problem for honeysuckles.

Threadleaf Coreopsis is another great choice for a wind tolerant plant.  It forms lacy clumps of leaves with small yellow flowers and looks great spilling over the side of a planter.

Russian sage is also another excellent choice.  Cold and wind tolerant, it will thrive on a balcony with full sun.

So all you high rise gardeners out there, no need to worry.  Although your balconies may present their own unique set of challenges, you can use the steps and plants outlined above to create a beautiful high rise balcony garden.

America’s Most Expensive Places to Live

America’s Most Expensive Places to Live

Although housing costs predict the cost of living in Americans towns and cities, New York City’s boroughs continue to sit at the top of the list as the most expensive places to live, despite lower home prices. A list of 306 housing markets that indexes the relative cost of living for each city puts the Manhattan at 228.3. With 100 as the mean, or average, the cost to live in the city is 128 percent higher than the average.

The index is compiled and published by the Council for Community and Economic Research (C2ER), and has been since 1968. Prior to that time, the government compiled and reported the cost of living figures. Another name for the Cost-of-Living Index is the Consumer Price Index (CPI)

To determine the cost basis, the index determines the prices of sixty consumer good and services in the categories of housing, healthcare, groceries, utilities, transportation and a category for some miscellaneous items. Using a matrix that assigns a value or weight to each item, they compile costs monthly, giving housing more weight than the other categories.

At the top of the list is Manhattan (New York City), New York at an index of 228.3, followed closely by fellow borough, Brooklyn at 181.3. Both boroughs, being densely populated areas, have smaller properties compared to Texas, for instance, so the figures include pro-rated adjustments to compensate.

Moving to the West Coast, San Francisco, California comes in third at 166.5. Housing is more affordable there compared to its East coast counterparts, but the costs of transportation and healthcare are higher. Higher costs in the categories of groceries, transportation, utilities, and healthcare, as well as items in the miscellaneous categories puts Honolulu, Hawaii at number four, with 165.8. Its housing is less than San Francisco, but everything else costs more. Just an hour away to the south of San Francisco is San Jose.  At the center of Silicon Valley, the South Bay city came in at 154.3.

Back on the East Coast, Stamford, Connecticut, considered by most as a suburb to New York City, has more available real estate than the boroughs, so housing is less, but the utilities are higher giving it an index of 147.4. Queens, another of New York City’s boroughs, has lower housing costs than its nearby neighbors, but Brooklyn beats it in the areas of utilities, transportation, healthcare and even groceries.

Rather than just one city, the entire central metropolitan area of Orange County, California, comprises a single entity. That means that the index combines the County Seat of Santa Ana with Anaheim and Irvine in a single score. Housing is higher, on average, in Orange County than in Queens, but utilities and healthcare come in lower. One challenge for the O.C. is its lack of an efficient public transportation system making its score in that area higher than Queens, San Francisco and San Jose’s transportation scores.

Finally, the District of Columbia with Arlington and Alexandria, Virginia comprise the Washington, D.C. index region. The nation’s capital comes in just under Orange County at 144.6.

Is Buying a Condo in New York City a Good Investment Now?

With all the talk of the economy improving, it’s pretty easy to get swept up in optimism. But despite improvements, the numbers still aren’t that great. In April, unemployment numbers fell to a three year low of 8.1 percent, but that’s only because less people are actively seeking work. (The government only counts those who are actively looking as the “unemployed” figure.)

According to recent data, there are 12.5 million Americans out of work which is the longest period of high unemployment in the U.S. since the Great Depression.

So, if you’re fortunate enough to have a good job in this economy and have cash to spare, then you might be asking yourself if it’s the right time purchase a home. If the answer is yes, then you may want to consider New York City, because of its unique position as a financial capital.

To help you decide, here are some more questions to ask yourself: Do I know how to keep my expenses down? Am I more comfortable keeping cash on-hand versus investing it? Would I prefer having my money in the stock market? Or do I want to diversify by having cash, money in the markets and own real estate? Of course, these are questions only you can answer.

But, if you aren’t clear, here is some information about the current NYC housing market that can help you decide:

Real estate can be an amazing appreciating asset which you can both live in as well as get deductions on. And if you have a strong knowledge base about the market or have a skilled real estate agent who can guide you, you should be able to make money purchasing a home, especially if you are willing to hold on to your investment for two or more years and, even more so, if you buy in New York City.

Because the city draws investors from all around the globe, there are more people buying homes in NYC than ever before, unlike practically any other time in history.

The adage still holds true: If you’re going to buy, think location. But you still need to determine what part you want in real estate, investment and/or cash. Owning NYC real estate — especially today with the prices being flat and interest rates being historically low—is one of the most solid investments you can make.

Even factoring in new development, the total listing inventory coming on the market is not even close to what it was from 2005 through 2008.

Since its peak in 2008, new development has been depressed, and though some developers have started to swing into action, inventory will, most likely, continue to stay low for at least a few years, since many projects have only recently gotten underway.

So, when the market does take off in New York City, it’s really going to go! Thus, if you stick to what you know or know someone who can really educate you in making the right real estate decision, you will be in a great position.

Also, don’t just follow the packs regarding what’s hot, that’s where people get into trouble.

Further, be sure to put enough cash down and have a good understanding of your finances to know what you can really afford on a monthly basis; avoid over-leveraging yourself at all costs. In addition, look at the comparables before you buy so that when and if you decide to purchase a home, you will have made the smartest investment possible.

High Demand for Residential Real Estate in Manhattan

New York City may be stunningly diverse, fast-paced and busy, but there’s at least one thing about it that is surprisingly stable: Manhattan has an incredibly strong and steady real estate market, unlike anywhere else in the country.

Though the housing market is in flux throughout the United States, residential real estate in Manhattan remains a great investment.

For instance, Manhattan has seen a 1.2 percent increase in median sales price over the past year. This increase, combined with a decrease in discounts from the listing price, bodes extremely well for the overarching stability in the Manhattan market.

It’s a modest sales price increase, but nonetheless, when compared to the rest of the country’s depressed market, New York City’s slow and steady rise is a bona fide bright spot.

So what makes Manhattan a stable investment? There are a few reasons behind the health of the City’s housing market. For one, sellers can count on the reliable influx of foreign buyers who are interested in purchasing Manhattan real estate. A weak dollar and the enduring cache of owning property in one of the world’s most desirable cities is attracting house hunters around the world.

Another explanation goes back to basic economics: good old-fashioned supply and demand. The dearth of new development and construction in New York City has left buyers clamoring for any and all desirable property.

Here are some interesting statistics:

Back in 2008, when the economic outlook seemed far rosier, there were 9,700 filings put in to build new housing versus in 2009 when there were only 1,363 filings, following the economic crash, and in 2010, it was even more dismal, with only 704 filings. It is not a surprise, then, that buyers are chomping at the bit.

This can be seen on an anecdotal level as well. Several months ago, two new Manhattan developments were selling out fast and furious: the property has 44 luxury units and there were 33 contracts out in just one month’s time — and approximately 5 price increases.

The second is the Toll Brothers’ 15-story luxury condominium building at 132 East 65th Street: The Touraine.

Upon opening its sale office in October 2011, more than half of its 22-units had gone into contract and more than 3,000 people were on a waiting list, and, at that point, only the foundation was done, according to Toll Brother’s City Living, the urban development division of the high end, Pennsylvania-based home builder. An executive at the firm states that as soon as a unit is released, it sells within a week.

Now, here it is in June and even though the building still isn’t completely finished, there is only one unit left for sale. Designed by Luciene Lagrange, The Touraine should have all of its finishing touches completed in the early part of 2013.

So although the forecast for the housing market looks gloomy elsewhere, Manhattan’s outlook remains temperate, calm and downright attractive. The demand is definitely there and prices are on the rise. New York may be one of the most exciting cities on the planet, but for buyers it remains a pretty safe investment.

Manhattan’s $60 Million Apartment Will Be the Priciest Co-op Sale Ever

While some incredibly pricey homes have been facing bankruptcy auction and foreclosure, Manhattan’s multi-million dollar apartments have been attracting billionaire buyers. So is the case at the Upper East Side cooperative tower, 740 Park Avenue, where a combination of two duplex units asking $60 million has found a moneyed taker.

The luxury property is actually two apartments side-by-side belonging to one owner and selling to one buyer. As a joint sale, it will be the City’s top four most expensive sales ever and once it’s finalized, it will be the second-highest transaction year-to-date in the United States.

Michael Gross, who has written a book about the high-end building, first reported the deal indicating that the full $60 million asking price had been obtained.

Forbes has heard the same figure from reliable sources familiar with the deal. But the Wall Street Journal reports the accepted offer may actually be less than that — at $52 million.  Executives at the luxury real estate firm representing the pricey pads, declined to confirm any details in the contract.

If it sells for $52 million or if it sells for $60 million, either way, it will be the highest Manhattan sale for a co-op ever. It will be a record, says Jonathan Miller, chief executive of Miller Samuel, a real estate appraisal firm based in the City.

Since the co-op market is the highest priced and the largest in the Big Apple — co-ops account for 70 percent of all residential properties in the area, it will also be the highest price ever paid for a co-op across the nation.

The high-rolling buyer’s identity is not yet known but those familiar with the deal says it’s someone local. Unlike the uber-rich trophy home hunter from Russia, taking a cue from Dmitry Rybolovlev, he plunked down $88 million on a condominium for his daughter in January.

You usually don’t see foreigners buying in co-op buildings because the co-op board is in first position, and it’s harder to go after someone if they aren’t based in the United States, notes Miller.

In other words, since co-op units actually represent ownership shares of the building overall, potential buyers must disclose all of their stateside assets, which must be substantial, for co-op board approval.

If a buyer were to get approved and then fall upon dire straits, the board further reserves the right to exercise legal options over those property shares before other creditors. So if the owner lives abroad, that becomes practically impossible to do. Further since a sale hinges on co-op board approval, in a posh building like 740 Park Avenue, co-ops usually attract only local buyers.

Since the property is an all-cash building, the sale will be in cold, hard cash.

But the board will also want to determine whether the potential buyer can afford to pay an additional $412,000 in annual maintenance fees, and on a more implicit level, whether they will get along well with the other rich and famous residents of the building who include fashion mogul Vera Wang, Estee Lauder billionaire Ronald Lauder, and Blackstone billionaire Stephen Schwarzman.

Board denial is not uncommon either: the notoriously persnickety board reportedly blocked billionaire investor Nelson Peltz and late actress Joan Crawford from buying in the building.

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US real estate markets are strengthening

Real estate experts are saying that homeowners need to be persuaded that it is worth taking a step back by selling for less so they can take two steps forward to buy a more expensive home. He added that if you buy up in a down market, you make money on selling. Markets are strengthening in many cities due to economic improvement and declining unemployment. The supply of homes for sale fell in March as the prices continued to drop. That is a clear indication that sellers in those markets are becoming discouraged.

Real estate economists say that when job seekers lose heart and there is a decline in the unemployment rate, sellers can become discouraged. As prices recover in markets nationwide, individual sellers and banks will put homes on the market that they have been holding onto while demand was weak. Many sellers will not move. Sellers believe their home will be worth more next year. The interest in homeownership is increasing and prices will rise.

Home buying is more competitive

The home that you are interested in buying most probably received offers from other potential buyers. It is not a good idea to focus on the other offers. Rather focus on the offer you want to make. Do not allow yourself to feel rushed to make an offer. Only make the offer when you are ready to do so. Your focal point should be the negotiations with the seller. Regardless of what the other buyers are doing and offering, you keep on focussing on your own negotiations with the seller.

Home buyers have mixed feelings

People selling their homes are not just selling a structure. This was home to them and a place where they created memories. They want to know who is buying the house, what interest do you have in their property and how much are you offering them for this property. Respect and deal with the sentiment.

Present your offer in the best possible manner. It is a good idea to write an introduction note and present that with the written offer. Include your pre-approved bank letter. This will demonstrate to the seller that you are serious about buying the home and that you qualify. The seller will respect the fact that you came well prepared.

Close the deal quickly

You can finalize the deal with the earnest money deposit. This money is refundable, so there is no risk in losing your money. Paying at least the minimum 3% will convince the seller that you are serious. Selling a home can be a stressful experience too.  The buyer must be patient. Showing empathy can do no harm. You have done your best in submitting your best offer.  If you are not successful with the first offer, it is possible that you can find a property that is even better. There are more homes coming onto the market all the time.  Waiting for the right opportunity is better than being too anxious to buy your dream home.