Before you buy a condo/coop--Read this!

This is a national report while real estate is a local item. Other reports have shown that the NYC area has been stable even as the national numbers have gone down.

I think PH and the new developments will continue to do well as the effects of development and gentrification will outweigh any softening of the market, assuming there is any.

Well, there's a limit to anything. Property values have gone down in New York City in the past... it is possible for the market to be overly optimistic at points. Remember, in the past, it has been said, "This is the Titanic; it will never sink!!!"

However, in this particular report, New York-Northern New Jersey-Long Island market reported a 2.3% increase (I didn't see any market that looked better described for NYC). Some nearby markets did decline, though: Boston, D.C., Providence, New Haven, Bridgeport/Stamford, among others. So I wouldn't just trust blindly in an ever-rising New York market. http://money.cnn.com/2007/02/15/real_estate/latest_prices_q4/index.htm

Also, if you frequent Brownstoner, there are signs that the local market has softened... comments to asking prices for places in Brooklyn basically, "This isn't 2005 any more. What is this seller thinking?" and the stories of bidding wars are much less frequent and sales that take 4 months or more and go below asking more so.

I don't think this period - December thru February is a good measure of the breadth of the real estate market, especially here in the north east. Historically, this period is usually slow. A true test of the market will be after the cold spell is over and tax refund starts to roll in.

the new york market is an entirely different animal than the rest of the country. while i have noticed that prices have come down maybe %3 over the past year and time spent on the market is much longer, things still sell.

owning your own home is probably the best way for most people to accumulate wealth in this country.

Mateo wrote: I'm really so sick of hearing, "NYC is different". It's generally followed by some line about, "There's only so much real estate in New York and lots of people for it" or, "There's only a finite number of Brooklyn brownstones."

There's only a limited number of anything. And even things that there are only one of, it is possible for the value to go down if there was speculation that proved misfounded. New York property values increased 40-50% from 2000 to 2005. That's a lot of buffer for a decline and still maintain a healthy historic growth rate.

Clearly, it doesn't look the bottom is falling out of the New York market. More like a small correction. But New York is just as susceptible to overly-optimistic speculation as the next market. It's not immune just because it's New York.

Mateo,

This if from 1 month ago and a previous post but I think it is appropriate to post here:
http://brooklynian.com/forums/viewtopic.php?t=32478


From Brownstoner:

"According to the most authoritative source of data, the city's assessment roll, rumors of the New York real estate market's demise have been greatly exaggerated. After a slowed rate of increase in 2005, property values around the five boroughs posted strong double-digit increases in 2006, with the Bronx and Brooklyn leading the way with jumps of 27.6%. “While people predicted that the sales prices were coming down, they haven’t been coming down,” said Martha E. Stark, the city’s finance commissioner. “It might take a little longer to sell something, but actually, the prices have been holding.”"

NYTimes:
http://www.nytimes.com/2007/01.....ref=slogin



Property Values in New York Show Vibrancy

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By SEWELL CHAN and RAY RIVERA
Published: January 13, 2007

As the nationwide property market cools, real estate in New York City is showing surprising vibrancy, with estimated market values jumping by 19 percent in 2006, double the increase from the previous year, city officials said yesterday.

And the steepest jump in market values is occurring in the Bronx and Brooklyn, with increases of 27.6 percent in both boroughs. That suggests that the booming real estate market is continuing to shower benefits far beyond the gilded confines of Manhattan.

The data come from the most authoritative snapshot of city property: the annual assessment roll, which contains market and assessed values for all residential, commercial and other property. Yesterday, the Finance Department released the tentative roll, which will largely determine taxes for the fiscal year that starts this July 1.

The city estimates market values based on sales figures in the case of houses, and on potential income, in the case of apartment buildings, condominiums, cooperatives and commercial properties. The market value becomes the basis for the smaller, assessed value, which is then used to calculate the tax bill.

According to the city’s assessment roll, the Time Warner Center remains the property with the highest-listed market value: $1.1 billion, up 9.9 percent from the previous year.

Also, the hotel industry is booming, with the highest-listed hotel, the Marriott Marquis in Times Square, worth $504.9 million, up by 39.8 percent from the year before. The No. 4 hotel on the list, the Grand Hyatt New York at Grand Central Terminal, is worth $300.9 million, up 80.3 percent from the previous year.

The figures not only reflect the surprising robustness of the city’s real estate market, which increasingly seems detached from national trends, but also could provide a boost to the city’s budget.

They also mean that renters and some homeowners may have to dig deeper into their coffers for housing, although many homeowners are protected because of assessment caps, and tax rebates and exemptions.

Since Mayor Michael R. Bloomberg and the City Council will probably not change tax rates, because of the city’s strong short-term financial outlook, the average tax bill for one-, two- and three-family homes will rise by 4.5 percent, to $3,236 from $3,098. (Assessment increases for such houses are capped at 6 percent a year or 20 percent over five years under state law.)

Average tax bills will rise 2.1 percent for condominium units, to $6,587 from $6,449, and 6.6 percent for cooperative apartments, to $4,214 from $3,952.

Those taxes are likely to be offset if the City Council and the State Legislature agree to extend the popular $400 residential property tax rebate, which began in 2004 and has benefited about 650,000 homeowners. Mayor Bloomberg, who is scheduled to unveil his preliminary budget for the next fiscal year later this month, has called for a three-year extension that would last through the end of his administration.

The city’s finance commissioner, Martha E. Stark, who presented the assessment roll in a news conference at the Municipal Building, said that the growth in housing market values was contrary to nearly all expectations.

“While people predicted that the sales prices were coming down, they haven’t been coming down,” she said. “It might take a little longer to sell something, but actually, the prices have been holding.”

The total value of all New York City property stands at $802.4 billion, up by 19 percent from $674.1 billion the previous year. The increases were greatest in the Bronx and Brooklyn (27.6 percent), followed by Staten Island (18 percent), Manhattan (16.9 percent) and Queens (12.1 percent).

“Obviously the real estate market has been very good in New York City, so it’s not surprising that values have gone up, but 19 percent seems to be a pretty high number,” said Steven Spinola, president of the Real Estate Board of New York. He said he was concerned that building owners would be hit with sizable tax increases “on what really are paper increases in value, because not everybody is selling their properties.”

Mr. Spinola said the increases could particularly hurt owners of rent-regulated buildings. In buildings where rents are not regulated, higher taxes could be passed on to renters, though only if the market will bear the higher rents, he said.

The most valuable house in the city was listed at 48 East 92nd Street, worth $39.6 million, up from $30.7 million the previous year. The value of Mayor Bloomberg’s town house on the Upper East Side jumped to $13.5 million, up from $10.5 million the previous year....

Guvna wrote: This report does not surprise me. I've seen prices hold, but not drop. I'm convinced they'll rise again, even this year once the spring pops up.

I second that.

I dunno...

There's a dude at my job that lives in BedStuy, and he took me around... some dude bought a block and put up a whole row of brand new townhouse type homes. 3 bedroom places going for about 700K a pop. They've been up for about 3 years and nobody has moved in yet.

The thing with places in Brooklyn is that they're trying to get all these rich yuppie types to move in by the droves. The average monthly rent for a 2br on my block is what me and my roommate are paying- $1800. But the dude I was talking to works with landlords and brokers and he knows the kinds of people around here. For the most part, it's working class people who make about $25-35K/yr. They can't afford a place for even 1300-1400, let alone 1800-2000, especially with their families and all their other responsibilities.

It's different for young people with no kids, no cars, (for me no student loans), etc... than for older people with all that stuff. And on the whole, the older people around here are making LESS money than the young kids who come in from Manhattan, either through parents paying for school or working jobs out of college.

So these big condos or new apt. buildings go up, and they can't fill them. What does the landlord do?

Take a few units, make them Section 8...the gov't subsidizes half the rent, the landlord fills the apartment. While a lot of people on Section 8 are just working people who can't afford to pay the rent where they live, a lot of them are people involved in the 'street life'...so eventually, you get more and more rowdy rowdy neighbors until you say 'fuck this, i cant take it anymore', and the landlord has a whole building full of Section 8 tenants.

Now my building is brand new, so it's interesting to see it slowly fill up... I look out on the balconies for 'stuff' to see what units are occupied, and in the last month or so they've been getting a lot of people in. A good 2-3 people move in every week. What I am waiting to see is the summertime, when the true character of the neighborhood comes to light, and how that will affect us.

But yea... I just said all that because I think BK has to be looked at as a totally separate animal compared to Manhattan or even places in Queens like Astoria or LIC (although I don't think that new condo that went up in LIC is ever gonna get its units sold). The dynamic of the neighborhood just doesn't seem conducive to the kind of rapid transformation that took over in places like the Lower East Side, etc. Without heavy municipal interference I don't think the real estate market alone can transform the neighborhood. If I had the $$$ I wouldn't buy a condo around here.

Not to mention there are so many yuppie/hippie staples that aren't close by...no Starbucks... no Urban Outfitters... no Whole Foods... no vintage boutiques... not close enough of a proximity to said venues in the city to warrant the move. If I were a city planner I could probably do it, but there's so much going on I dunno what to make of it.

When this lease is up, unless I'm totally wrong, I'm probably gonna move back to Astoria or into the 'Upper East Side'...

Thanks escap, good find.
NY is different for a number of reasons.
I am posting the article since the NY Times links can go dead sometimes:

Housing Market Heats Up Again in New York City
By TRACIE ROZHON
Published: February 19, 2007

Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.

Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.

Real estate brokers and statisticians are quick to point out that not every single apartment is flying into contract. During the last quarter of 2006, the major real estate agencies differed on which way prices were headed.

But now, the three largest real estate companies in the city agree: for January, at least, both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006.

With higher Wall Street bonuses, a strong regional economy and pent-up demand from New Yorkers who were once worried that the city’s real estate market would crash, buyers’ attitudes have done an about-face. “Their psychology has changed,” said Frederick W. Peters, the president of the Warburg Realty Partnership. “For almost two years, they’ve been scared that the market would plummet and they’d end up like fools who paid too much.”

Real estate experts say they see no reason for the trend to not continue, with economists predicting stable mortgage rates and a continuing city budget surplus. However, other factors may alter New Yorkers’ renewed interest in buying real estate, including an expansion of the Iraq war, a changing employment picture or another terrorist attack.

Yet, there is “cautious exuberance,” according to Steven L. James, director of Manhattan sales for Prudential Douglas Elliman.

A week ago, one open house attracted 100 people to an Upper West Side one-bedroom; a $2.475 million house in the Park Slope neighborhood of Brooklyn sold in a day.

Across the board, the prices of Manhattan apartments are rising. Jonathan Miller, the president of Miller Samuel, an appraisal firm, said the number of contracts signed this January was 19.4 percent higher than in January 2006. Prices were up 14.4 percent in the same time period. Inventory, which was mounting last summer, is shrinking fast.

Now, according to Mr. Miller, statistics showed that sales of studio and one-bedroom units, stagnant over the past year, were up 13.7 percent in January. “It’s not like a lot of huge sales at the high end skewed the average up.”

According to a report released last week by the National Association of Realtors, prices are falling in many other metropolitan areas around the country. The report covered only the last quarter of 2006, and showed a modest increase of 3.1 percent for the New York area, which includes parts of northern New Jersey.

Anecdotally, there isn’t much talk of falling prices in Manhattan and in the most sought-after neighborhoods in Brooklyn, where young people looking for a break, empty nesters looking for a guest room and foreigners looking for a pied-à-terre say they want to live.

Katalin Shavely, a 30-year-old bedding designer in Manhattan, devotes her weekends to scanning the classifieds and attending open houses, searching for just the right one-bedroom apartment for less than $750,000. She can’t find it. “I made a mistake,” she said last week. “I should have started looking before Thanksgiving.”

Mr. Miller said New Yorkers had been reluctant to buy because of the feeling of an impending crash. “Last summer, a lot of information was being dumped on the consumer: stories about the glut of condos in Miami, Washington, D.C., and Las Vegas, exacerbated by the constant debate on the blogosphere about housing bubbles, mixed together with a barrage of negative predictions,” he said in a telephone interview.

Although no one can pinpoint the moment when New Yorkers started feverishly buying again, Kirk Henckels, the director of the private brokerage division of Stribling & Associates, said he thought the luxury market picked up after Labor Day.

He and others said the resurgence was partly fueled by the fall’s record-setting (and well-publicized) sales of a few multimillion-dollar apartments and town houses, like the Stanford White limestone palazzo at 25 East 78th Street bought by Mayor Michael R. Bloomberg for $45 million and the Harkness mansion at 4 East 75th Street sold in October for $53 million.

Then came this year’s stratospheric Wall Street bonuses, and the market exploded, real estate executives said.

“The plunger that freed up all the hesitation at all price levels was those bonuses,” said Diane Ramirez, the president of Halstead Property. “It cleaned the pipes and gave confidence to even small apartment buyers.”

Within the last month, the Corcoran Group, Halstead and Prudential Douglas Elliman, three of New York City’s largest real estate sales firms, say they have recorded double-digit increases in contract prices and in the number of transactions.

In a real estate market where 18 and 22 percent price increases were recorded in 2004 and 2005, last year’s 6 percent increase was depressing, Mr. Miller said.

Pamela Liebman, the president of the Corcoran Group, reported that the company’s contracts for this January totaled $1.3 billion, an increase of 53 percent from January 2006.

Prices in many areas of Brooklyn are going up, too. According to Marc Garstein, the president of Warren Lewis Realty in Park Slope, prices in what he called the downtown neighborhoods — including Brooklyn Heights, Park Slope, Carroll Gardens, Cobble Hill, Prospect Heights and Windsor Terrace — are now approaching 2004 highs, after being off about 10 percent in the last two years.

A town house at 171 Garfield Place in Park Slope, priced at $2,475,000, sold for the asking price one day after it was put on the market. Fifty people had shown up at the open house, Mr. Garstein said.

Customers said they had expected a buyer’s market in which they could call the shots, but found a race track, instead.

Jane LaFarge Hamill, a 25-year-old painter who lives in a “small, kind of stinky” studio in Chinatown, said she had looked at 60 apartments over three months, trying to take advantage of the lull she had noticed. “We decided to look while sellers were still worried that the market was crashing,” she said.

When she started looking last fall, there was still “wiggle room,” she said. But now, there is frenzy, said her mother, Leita Hamill, who, with her husband, Bill, is helping her daughter search for and buy a new home. The Hamills had gotten into a bidding war, one of many reported by brokers these days, for a two-bedroom co-op in Gramercy Park. They had started bidding above the asking price, but it wasn’t enough.

“There were people bidding on the apartment sight-unseen,” Mrs. Hamill said. The victors got the co-op through a sealed bid, she said. “It was like a pair of shoes that you absolutely had to have,” she said.

Real estate executives say they do not know how long the market’s heat will be turned up, although they say the regional economy looks strong.

They also say that the first two quarters of the year — the spring market — are traditionally stronger than the last two. Thus, the average for the whole of 2007 may or may not show the double-digit growth that the first part of the year is showing. “It’s all about price now,” Ms. Ramirez said. “The market is not in a spike mode, when anything, for any price, will sell.”

Ms. Ramirez, who has sold real estate for more than 30 years, said she expected that the current rocketing growth would be followed by a period of slower yet steady increases. “I don’t want to hear, ‘Oh my gosh, the market is slowing up again,’ ” she said. “With the number of deals we had last week, it has to calm down. But I feel much more confident than at any time in the last five years when the market had fits and starts and there was always a certain underlying nervousness.”

Toward the end of 2004, the real estate market in the city was booming. But then, brokers started seeing “great concern among clients that mortgage rates were about to jump and that house prices would suffer a sharp correction,” Mr. Miller said.

Since then, there has been change of leadership in Congress, Mr. Miller noted. In the region, unemployment has dropped. Mortgage rates didn’t soar. “Two years ago, we were predicting they’d be up to 8 percent now,” he said. (Rates for a 30-year fixed loan on a New York City co-op hover around 6.25 percent, according to the Manhattan Mortgage Company.)

After months of trying to push shoppers over the edge of indecision, brokers now say they spend time warning house hunters not to rush in heedlessly — advice the would-be buyers don’t always listen to.

“When my wife and I got into the market in mid-December, people told me there was a glut of one-bedroom apartments and I could take my time,” said Shelly Cohen, 51, an empty-nester. “When we actually got into the market, I found it was just the opposite.” He just found a newly created condominium in a beige brick high-rise at 1438 Third Avenue at 81st Street and quickly signed the contract. He said he felt he had to.

Mrs. Hamill, the mother of the young artist in Chinatown, offers her own advice to friends.

“Now I tell everybody: Be ready to write the check the minute you see something you love,” she said. “If it’s any good, it’ll be gone by the next day.” She paused. “Or, even by that same day.”

Although b4 you celebrate don't forget that if you sell with the intention of moving elsewhere in NYC, you'll be buying into the same inflated market that you're selling into. It's a bit of a catch-22 unless you sell and retire to Florida or something, or unless you have multiple properties and can just sell and keep the profits.

I can see why CooL the Kid would rather live on the LES but not the UES..however,... real estate is exactly what transforms these neighborhoods. Look at Ft Greene....

Brooklyn is at he point it was in the 1800's. If you had money then, you could buy here. I love that BK. is turnin around, yet I hate what it's doing to my rent.

Also, drawing on more reports:

http://www.nytimes.com/2007/04/03/nyregion/03property.html?ref=realestate

"Buyers also paid an average of 22 percent more than they did a year ago for Brooklyn apartments, especially those in newly constructed or converted buildings."