It’s no secret that I’m a supporter of transparency in real estate…every aspect of it. Which is precisely why I believe that something needs to be done about the secret society that is the Manhattan co-operative. Check out these previous TG posts:
From Eliot Brown of The New York Sun (via Curbed) comes Stalled Co-op Rights’ Bill Gains Backers.
A bill that would affect co-op boards, long stalled in the City Council, is getting a boost from local law professors who yesterday sent a letter to Mayor Bloomberg and Speaker Christine Quinn urging action on the legislation.
The bill would require co-op boards to disclose specific reasons for rejecting potential apartment buyers. It is supported by a majority of the council, a host of civil rights groups, and now 13 law professors from universities in the city.
It’s going to be very interesting to see how this plays out and whether or not Bloomberg would support such a bill. I suspect he has quite a few friends on Co-op Boards who strongly oppose such legislation.
Opponents of Mr. Monserrate’s bill say disclosure of reasons for rejection is hardly a solution to the onerous process of buying in a co-op, and boards would never openly disclose if they did engage in illegal discrimination.
One of my readers suggested the following quite some time ago and I found it quite intriguing:
My thoughts are having a set of ‘standards’ for coop boards and establishing a group (either self-governing or through the city) to ‘audit’ boards and ensure they are meeting these standards. Much in the same way that public companies now have to have their auditors sign off on internal controls.
Such standards could include maintaining sufficient meeting minutes, whether all shareholders are required to have homeowner’s insurance (some boards actually don’t require this!), etc.
The ‘auditors’ wouldn’t necessarly opine about the coop’s management abilities but instead disclose whether coops are meeting these standards.
Kind of like a public health inspector…does’t matter what the food is like or how much they charge, but make sure the place is clean.
Of course there would be the cost of maintaining this process but it might be less than legal fees incurred as a result of the proposed law. And if done effectively you’d see the price gap btw condos & coops narrow.
-newbie
An interesting proposition. What are your thoughts?
The next time you get very excited about the presentation of a property on a web site I would recommend calling the listing agent and asking one very simple question:
Was the property photographed with a wide-angle or fish-eye lens?
Being in the industry, there is hardly a moment where I’m not looking for a better place for my family to call home. Don’t get me wrong, we love our current apartment, the views and light, the building amenities, etc. It has a lot going for it so it would take something special to make us move. That something would likely be more space and a garden or terrace. You see, my 6 year old son constantly informs us that he wants to live in the country. He suggests that the "smells, colors, and air are nicer in the country." Hard to argue with that. Having said that, I’m constantly on the lookout for a townhouse or part of a townhouse that would provide the space my family is accustomed too with the added perk of some outdoor space for my son’s garden 😀 His bedroom is becoming a jungle of plants and herbs (none of which you can smoke of course).
Yesterday a property came across my desk that piqued my interest. A three bedroom townhouse garden duplex that looked quite appealing on line and boasted a whopping 2500 square feet of living space plus a south facing garden. Both my wife and I (she absolutely loves our current home and rarely gets excited about listings I send her) were intrigued and scheduled an appointment to view this property today. Can you say "DISAPPOINTING?" None of the rooms were even close to how they appeared in the photographs as the photographer obviously shot all rooms with a wide-angle or fish-eye lens. This is precisely why buyer’s distrust everything that they see on line and why they suspect that we’re lying whenever our lips are moving. The tell tale comment came from my very own wife who detected my frustration and said, "isn’t that your job as the agent to make the place look as good as you can?" More frustration set in as I reminded her that our job is indeed to assist in presenting a property in the best light possible but in a transparent fashion that manages a prospective buyer’s expectations. There is nothing more frustrating than going to see an apartment that you are excited about and it being a huge disappointment because it was misrepresented. I see this happen with my buyers all the time.
So the next time you’re all jacked up about a property you see on line, call the agent and ask them if you can actually see "that" apartment or are they going to show you something that merely resembles those gorgeous wide-angle photos their displaying on their web page? I suspect more often than not, you’re going to see the latter. Yet another stong argument for video!
This is the second time I’ve stumbled upon this map (via Kottke and Boing Boing) in the past couple of weeks and think it’s interesting enough to share:
Check out the full analysis at Strange Maps.
From The Wall Street Journal Online comes a report of shifting investor strategies as long term bond rates rise.
The recent bond market rout is prompting some fixed-income investors and mortgage shoppers to rethink their strategies.
Some investors have begun buying bonds with longer maturity dates, taking advantage of yields that moved higher as bond prices fell. Meanwhile, as rates on 30-year mortgages also jumped, some borrowers have begun taking another look at adjustable-rate mortgages. Bank of America Corp., for instance, says it’s seeing increased interest in hybrid ARMs that carry a fixed rate for the first three, five, seven or 10 years and then adjust annually.
In the Manhattan real estate market, I haven’t seen much of a trend away from these products so I am surprised to hear that BofA has seen an increase in interest in Hybrid ARMs. A large percentage of my buyers and those who are purchasing property that I represent continue to borrow utilizing these Hybrid products. Most of my buyers, including those who are in the mortgage industry, are attracted to the 10 year interest only mortgage with a fixed payment for 30 years (of course the amortization schedule adjusts after 10 years if you only make interest payments) as it gives them both security and flexibility with payments (this is the product my wife and I have on our current home). Why this product versus a standard 30 year fixed rate loan?
The benefits of taking out a hybrid ARM have increased recently, although the spread between rates on hybrids and fixed-rate loans is small by historical standards. Borrowers can cut the rate on their loan by about 0.28 percentage point by opting for a hybrid ARM that’s fixed for five years instead of a 30-year fixed-rate mortgage. That spread is the widest since October, but well below the 0.68 percentage-point average over the past 14 years, according to HSH Associates.
A quarter of a percentage point when loan amounts average $1M (half of a car lease payment perhaps?) is a significant enough monthly savings to make these products attractive.
For now, hybrid ARMs are likely to get more attention from borrowers with larger loan balances. "The jumbo category [loans above $417,000…that’s nearly every property on the island of Manhattan] is where you’re probably going to see the most movement," says Brad Blackwell, a national sales manager for Wells Fargo & Co., in part because borrowers with larger loan amounts tend to be more sophisticated. The potential savings from switching to an ARM can be greater, too, for borrowers with larger loans.
It’s also imperative to note that Manhattan buyers differ from much of the rest of the country in their transiency. The average apartment owner moves every 5 to 7 years here which means they likely won’t have to worry about that adjustment after 10 years.
With interest rates not likely to fall significantly in the coming months, I suspect we will continue to see interest rate sensitive buyers continuing to utilize Hybrid ARMs to purchase their homes. It remains to be seen how interest rate rises will impact buying power and ultimately sales prices. Only time will tell.
Check out the latest inventory numbers from Jonathan Miller’s Matrix which shows the number of available co-ops, condos and townhouses dropping 26.1% from last year to its lowest level since August 2005. So what does this mean? Frustrated buyers! There is so little inventory on the market right now that most of my buyers (and I’m working with many more than I typically do) are incredibly frustrated with the lack of options available to them in all price ranges. Having said that, property with inflated prices is not moving but new property that is appropriately priced is being snapped up by buyers who are waiting on the sidelines for "their home" to hit the market.
So if you are considering selling your apartment in the next 6 months, I have never believed more that the summer market may indeed be good for you. The buyers are just waiting for you to put your place on the market but don’t be fooled into thinking you can get whatever price you want because the current pool of buyers is patient and willing to wait for the right home at the right price. It’s simple supply and demand. The demand is there at the right price if only you would release the supply.
What better to blog about on a hot and sticky Manhattan day than the increase in the number of condominium projects with swimming pools (via The New York Sun). As I walked to the office this morning sipping my hot coffee (not so brilliant) it was no big surprise that I arrived with a sweat soaked shirt. A dip in a pool sure would be nice right now. Well if you’re one of the many new condo buyers at projects like 20 Pine, One York, or Sheffield57, an afternoon dip in the pool is a luxurious reality. So what are people willing to pay for a swimming pool?
A recent Sheffield57 buyer, Joel Ehrlich, said the open-air pool with a 16-foot retractable glass door to facilitate winter use was a major factor in his decision to spend more than $1.5 million on a two-bedroom apartment in that building. "Moving from Scarsdale, I was concerned about what I’d be giving up," Mr. Ehrlich, a married father of three grown children, said. "When I saw the rendering of the pool, I realized that it would be like having a beach and a country club — and all I would have to do is take an elevator."
Mr. Ehrlich said he was willing to pay a 10% premium for an apartment in a building with a pool, and surmised that the amenity, located on the building’s 58th floor, would boost the unit’s resale value, though he has no plans to sell it.
I can tell you first hand as the owner of a condominium at The Bromley on the Upper West Side, our swimming pool is invaluable both in the heat of the summer and during the blistering cold winter months. With 2 kids, it provides hours of fun and relaxation when the elements outside aren’t as favorable. In fact, my wife and I purchased our current apartment in large part because of the pool and the other amenities in the building and it seems we are not alone as the lifestyle that these condominium amenities provide makes living anywhere else seem mundane.
The founder and chief executive of the Shvo Group, Michael Shvo, said the value of a pool depends entirely on the profile of the target buyer. He said his firm is now marketing a property at 225 Rector Place in Battery Park City that features a 75-foot-long indoor, sky-lit pool with a lounge area — "geared toward the buyer who lives an active lifestyle."
"In a large-scale, luxury building, a pool is a necessity," a Shvo sales representative Ariel Cohen, said. "When kids want to go swimming, and they’re in they’re two-bedroom cookie cutter apartment, the nanny can take them for a dip — and that makes a world of difference."
A senior vice president and managing director of Brown Harris Stevens, Paula Del Nunzio, said swimming pools tend to draw would-be buyers with young children.
So if you’re seeking a building with a swimming pool, there doesn’t appear to be a list anywhere that is all inclusive of these "wet" condos. That said, I just did a search and came up with more than 500 available units in buildings with swimming pools. Dip anyone?
There is no doubt that transactions are taking place right now at all price levels with an absolute frenzy occurring in the ultra luxury ($10M+) Manhattan residential real estate market. Having said that, I’m still here with anecdotal evidence of a quieter market in the past several weeks as I and my colleagues although still somewhat busy are experiencing a bit of a lull in the market. In fact, just a few days ago I wrote about this welcome calm in the Manhattan Real estate market. Tom Acitelli of The New York Observer disagrees as seen in his article yesterday, This Summer, No Cooling Off for Manhattan Residential Market.
Simply put, the market hasn’t had the ups and the downs of the national housing market. No bursts, busts or slumps here—just more of the same, quarter in and quarter out, year after year, going back at least a decade and certainly running through the last few years. While not the most riveting story line, Manhattan as steadily successful perhaps best explains the housing market’s performance, now and as it will likely unfold this summer.
Over the last decade, Manhattan home sales have either gone up in the summer from the spring, or down—but merely slightly.
In 2006, condo and co-op sales increased over 9 percent from the spring through the summer, according to Miller Samuel. In 2005, sales dropped over 8 percent from the spring to the summer. In four of the last 10 years, sales have dropped from spring to summer, but never by very much; and both seasons, together, remain generally the busiest times of the year for Manhattan home sales.
In fact, it’s impossible to find a slow summer in any recent year. Take 2002, the year the housing boom really took popular hold nationally. The number of closed Manhattan sales dropped from the spring through the summer, but the number of summer sales—2,366, according to Miller Samuel—remained higher than in the winter or the fall.
Again, my market pulse is anecdotal based solely on my own business and that of the 200 or so agents with whom I rub elbows every day. The top producers in my office are all talking about how things have quieted a bit since mid May and some are even nervous about when it will pick up again. The fact is that traffic is down at open houses and buyers seem to be exercising more patience while searching for their homes. Inventory has also dropped significantly (via Matrix).
I wonder how much the stats are skewed by properties that go to contract in the Spring and close in the Summer months? I guess we will all have to wait and see what 3rd Quarter numbers look like come September but I still suspect that this Summer will be more relaxed for my industry than the typical January through May sales frenzy.
I just had coffee with a client of mine who recently purchased a FSBO and wanted to thank me in person. Although I consulted with him throughout the entire transaction, helped him comprise his Board materials, and coached him for his interview and various other parts of his purchase, I did so for no commission. I had shown this client multiple apartments and after losing a bidding war for an apartment, we both noticed that a shareholder in the building was selling his own apartment. After confirming that the shareholder didn’t want to work with agents, we set the wheels in motion for him to purchase the apartment directly from the seller. The seller was made aware that I would be involved in the background to insure a smooth transaction but again I would require no commission. I tell this story because I have seen many of my colleagues ignore FSBO listings for their clients for fear that no commission will be earned. Who can blame them right? Wrong. Our responsibility to our clients is to make sure that they are privy to ALL properties that may fit their criteria, regardless of our payday. It’s that simple. On the rare occasion that this happens (this is only the 2nd time in my 15 years), it is entirely worth the lost commission to develop trust with our public.
This brings me to the question of integrity and how exhibiting it is a winning proposition every time! A few days ago , I showed a new client (a writer who actually came to me via this blog) a property that both she and her husband seemed to like very much. I have visited their current apartment with over 60 feet of bookshelves and although agreed with them that this apartment was very nice, didn’t think that the apartment would look anything like it’s current state with all of their books. When I shared this insight with the seller’s agent (90% of the time I am the seller’s agent) he was noticeably upset and asked why I would talk my clients out of an apartment that they seemingly liked? He then asked me what kind of salesman I was? Need I explain? For a split second I actually thought maybe I did something wrong but then quickly realized that this is precisely why my clients work with me: TRUST.
Their is absolutely no question in my mind that if I chose to be a more aggressive "salesman," my commissions would increase in the short term. I just have to be mindful that the way I do business allows me to sleep at night and feel good about the service that I provide to all of my clients. If it sounds a bit like I’m trying to convince myself of this, your dead on. When deals fall apart, the tendency is to question what YOU could have done to make them happen. The unfortunate answer is often to compromise one’s integrity. An unfortunately I believe that this compromise happens all too often in my industry. For me, it just isn’t an option.
I’m off to attend my son’s kindergarten closing ceremony this AM (it bugs me when people refer to kindergarten children "graduating") so I thought this story from The New York Sun (via The Real Deal) was appropriate for the occasion.
…the city’s green plan to open up school playgrounds as public parks is quietly moving forward behind the scenes. Sixty-nine school playgrounds scattered throughout the five boroughs are expected to open within weeks, the Parks Commissioner, Adrian Benepe, said in an interview. The initiative would be the first phase of the city’s goal to have every New Yorker live within a 10-minute walk of a park by 2030.
About 81% of schoolyards are currently closed to the public after school hours, and the city has targeted 290 public school playgrounds and high school athletic fields currently open for only a few hours a day that the Parks Department, in partnership with the Department of Education, could open up for public use.
I have a 6 year old son and a 3 year old daughter who make great use of the public parks scattered throughout the Upper West Side. The city’s goal to have every New Yorker within a 10 minute walk of a park is an admirable one and one that will only continue to improve the quality of life that we all have grown accustomed too raising our families in this great city!
Well the True Gotham Dragons seasons came to a close Saturday. I just want to thank these young fellas for a fun season. Itwas a genuine pleasure to watch my nephew and his teamates play their hearts out and experience the thrill of victory (one) and the agony of defeat (more than one). These boys seemed to have a great time and really are developing a love for the sport of baseball. Here’s to next season boys and have a great summer!
