A review of Mercer’s 2011 Cost of Living Survey
At rank 32, New York City is the most expensive city in the United States. Los Angeles (77) and Chicago (108) have dropped significantly in the rankings (22 and 17 places respectively) as price increases on goods and services have been moderate compared to New York. Washington, however, also at ranking 108, has climbed three places, as rental accommodation prices have increased significantly.
Summary of findings in Q4 2011
•Manhattan Condo Market Index for November 2011 dropped by 1.3% since the previous month and dropped by 1.2% since the prior year. Currently, the market is 14.3% below the 2008 peak. For details see: http://streeteasy.com/nyc/market/condo_index.
•Median closing prices for condo resales rose 6.8% from the prior while co-op median price declined 8.7% and new development median price decreased by 9.8%.
•Volume of closings decreased 18.9% from last year and by 29.0% from last quarter.
•Inventory declined 5.9% from last year and 8.3% from last quarter.
•Signed contracts declined by 2.7% from the prior year but gained 6.2% from the prior quarter.
•Price cuts decreased by 1.4% from last year but increased 1.3% from last quarter.
•Time on market increased 2.5% from last quarter to 143 days but decreased 4.2%, 149 days, from a year ago.
By Ilaina Jonas
The United States will remain the top choice of most global commercial real estate investors in 2012, but the country has lost ground to Brazil which ranked No. 2 this year, according to a survey released Sunday.
For about the past year or so, investors in U.S. commercial real estate have focused on gateway cities such as New York, Washington, Boston, San Francisco and Los Angeles, driving prices up and yields down.
Meanwhile commercial property in Brazil, with its bubbling economy and safer investment environment, has become a hot spot for global investors. Sao Paulo, Brazil’s largest city, jumped to the fourth best city for real estate investment dollars in 2012, up from 26th place last year.
The Furman Center reports that home sales volume declined 20 percent from the first to the second quarter of 2011, and is down 40 percent compared to March through June of 2010. Despite the decline in volume, home prices increased citywide by about six percent from the first quarter to the second quarter of 2011.
The Furman Center’s Quarterly Housing Update is unique among New York City housing reports because it incorporates sales data, residential development indicators, and foreclosures. It also presents a repeat sales index for each borough to capture price appreciation while controlling for housing quality.
Read More…. Furman Center New York City Q22011Housing Report
By Amanda Fung
Demand for high-end apartments costing $5 million or more is robust; industry observers predict 2011 will bring stable prices and sales activity.
While there was a boom in sales activity during the first half of 2010, which sent the number of sales surging by as much as 80% in the second quarter, most observers don’t expect a repeat performance next year. Some of that boost was attributed to first-time homebuyer tax credit and record low mortgage interest rates. Instead, experts expect a return to healthy seasonality, when the winter months are slightly slower than the spring and summer, but apartments are being sold at a regular pace.
“I’m anticipating more stability with no drastic increases or decreases in prices,” said Jonathan Miller, chief executive of Miller Samuel. “I don’t think we will see any meaningful or significant housing related stimulus from the federal government.”
There was a slight increase in sale prices last year over 2009, but that was due to the sale of bigger apartments during the third quarter, the market for smaller apartments having returned earlier than other segments. During the third quarter, the median sale price for apartments in Manhattan was up 7.5% from year-earlier levels, according to the Prudential Douglas Elliman report.
“Prices won’t soar; they will hold their own in 2011, which is the best kind of market for real estate,” said Kathy Braddock, co-founder of brokerage Charles Rutenberg Realty. “Back in the heyday every quarter price went up 10%. It was very unhealthy because everyone was jumping into real estate for the wrong reasons.”
While mortgage interest rates are still low, most experts warn that credit is still fairly tight and that by the end of 2011 interest rates will likely increase. “Any increase will scare buyers off,” said Mr. Miller, who also cautions that unemployment rates remains high and with no rapid employment improvement visible on the horizon, the residential market won’t drastically improve.
“Next year will be a modest one for the city,” said Frederick Peters, president of Warburg Realty.
Sofia Song, vice president of StreetEasy.com, agreed, “I would not be surprised to see the market bounce along the bottom for a while before it is in true recovery.”
By most standard measures of economic health, New York City’s recovery from the financial crisis and the recession it started is well under way.
The typical New Yorker is less likely to be unemployed or facing foreclosure or bankruptcy than the average American. Homes in the metropolitan area have held their value better than in most other big cities as more people are moving to the region than deserting it. Tourists continue to flock to the city, filling hotel rooms at the highest rate in the country, and at rising prices.
Wall Street — still the engine that powers the city — roared back faster than expected, eliminated far fewer jobs than had been forecast, resumed paying out big bonuses and has begun to hire again. Despite a faltering stock market and recent signals that the national economy is losing steam, economists expect New York to remain on the rebound.
“We have been feeling on more solid footing the last six months,” said Marcia Van Wagner, the city’s assistant comptroller for budget. “If there’s no major shock, I think we’re going to have a slow, relatively steady recovery.”
There were some major shocks two years ago, most notably the collapse of the Lehman Brothers investment bank, which heralded the end of the boom years. Lehman’s failure, in September 2008, caused a panic in financial markets that spurred predictions of another Great Depression.
But in the city, far fewer jobs were lost than had been predicted and there has been job growth for the last six months. In July, the number of jobs in the city was down 108,000, or less than 3 percent, from July 2008. Over the same 24 months, the nation lost 6.7 million jobs, or more than 4.5 percent. The city’s unemployment rate slipped last month to 9.4 percent, slightly below the national rate.
Still, experts on the city’s economy said the effects of the recession were spread unevenly across the local landscape. David R. Jones, the chief executive of the Community Service Society of New York, an antipoverty group, said that the farther away from Midtown one wandered, the more ravaged the city appeared.
“While we’re seeing in Manhattan that things are going relatively well and there’s been a sharp rebound, in some neighborhoods of New York things are not going well,” Jones said.
And so, while economists agree that the recession is over in the city and it did not last as long or exact as harsh a toll as on the rest of the country, the key determinant of people’s current well-being appears to be whether they came out of the recession with a job.
Those who remained employed, especially if they had professional or managerial positions, were fortunate. James A. Parrott, chief economist of the Fiscal Policy Institute, found that in the city, the income data masked a deep divide: the pay of managers rose at a healthy clip through the recession while lower-level workers took significant cuts in pay.
“That doesn’t bode well for the recovery in consumer spending in New York’s neighborhoods,” Parrott said.
PATRICK McGEEHAN , The New York Times
Despite rising gloom about home sales across the country, sales of apartments in Manhattan appear to have strengthened this summer, with median prices up, inventory down and an increase in the number of apartment closings.
The figures suggest that the Manhattan market, buoyed by a resumption of hiring and a healthy Wall Street bonus season ahead, has so far escaped much of the distress across the country. The National Association of Realtors reported Tuesday that existing home sales nationwide plummeted by 27% in July, following the expiration of federal housing tax credits.
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The tax credits, worth as much as $8,000, had much less of an impact in the Manhattan market because the credits made up a much smaller percentage of sale prices than in lower-priced markets. July’s median home sale price in Manhattan was $900,000, compared with $182,600 nationwide.
Still, there is some worry among some brokers here that economic uncertainty may stall luxury sales in the fall, as buyers become more reluctant to sign contracts. Some also fear a rush to sell by owners worried about likely increases in capital gains tax rates next year could push down prices.
Dolly Lenz, a top-selling broker at Prudential Douglas Elliman, said that buyers have begun holding back. “There is a lack of confidence and a lack of direction,” she said. “You can feel the mood and it is not a good mood. There is no rush to buy and people are gambling that prices are going down.”
In other parts of the city, and across the region, sales have more reflected the national trend. Volume fell after a rush of deals in the spring to take advantage of the federal tax credits, according to Jonathan Miller, an appraiser and president of Miller Samuel Inc.
Mustafah Abdulaziz for The Wall Street JournalThe Fifth Avenue townhouse bought by Carlos Slim for $44 million.
In Manhattan, a review of city records compiled by The Wall Street Journal shows that median prices so far this quarter are up more than 14% above the previous quarter and 16% above the year-earlier quarter, when Manhattan prices hit bottom, during the downturn.
The increase in reported prices was concentrated in co-ops while the condo market was flat. Brokers point out that it often takes longer for co-op sales to go from contract to a closing than condo deals because buyers need to be approved by co-op boards.
Sharon Baum, a Corcoran broker, said that despite the summer heat there has been a lot of activity, including a spate of bidding wars on well-priced property.
A few weeks ago, she said, she put a one-bedroom apartment on Park Avenue South on the market for just under $1 million and had 14 offers within a week. An open house was attended by 136 prospective buyers. It went for 10% over the asking price, she said.
“This is August, when you would think nothing is doing, but when apartments are priced right at all price points they will sell in a week,” Ms. Baum said.
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Across the country, inventory of unsold apartments has been rising, but in New York, brokers say it has been tightening. Properties that had lingered on the market for many months during the housing downturn are getting sold, and not yet replaced with new inventory. Sales of new condominiums picked up this year, lessening fears about a glut of unsold condominiums driving down prices.
So far this quarter the number of closed sales is running about 5% above the same period last quarter, according to a review of city records.
Brokers say that unlike last year, sellers were not dumping apartments on the market under duress. Back then, some investors suffering huge losses and victims of Ponzi schemes rushed to put apartments on the market, driving prices lower.
A study by the Vanderbilt Appraisal Co. said that at the current sales pace it would take 9.9 months to sell the current Manhattan apartment inventory. A year ago it would have taken 20 months. The study found that the market was in equilibrium for all properties priced $3 million and below, but the absorption rate was considerably slower for the most expensive apartments.
Brokers say some of these trophy listings are lingering because they are priced well above the current market. Several cited Brooke Astor’s 14-room apartment, which has been on the market since mid-2008, and remains unsold despite a price cut to $24 million from $46 million.
During the third quarter, there were some significant closings. Carlos Slim, the Mexican billionaire, has topped the list so far, paying $44 million for a townhouse at 1009 Fifth Avenue.
Next was Conan O’Brien’s sale of a seven-bedroom duplex high up in the Majestic, a co-op at 115 Central Park West, followed by a downtown townhouse at 2 N. Moore St. with a 47-foot heated lap pool that sold for $24 million. Steve Wynn, the Las Vegas casino developer, paid $23.5 million for a penthouse at the Plaza Hotel.
Some brokers remain concerned about the rest of the year, because of the uncertain economy. Kirk Henckels, the director of Stribling Private Brokerage, said that most of the significant sales recorded this quarter “reflect the market prior to the decline in consumer confidence.” He said he was more concerned about the fourth quarter, but said he believed that prices were already near a bottom.
But the fascination with Manhattan real estate hasn’t abated. “Selling New York,” an HGTV reality-TV show featuring the drama of brokers selling some of Manhattan’s most expensive apartments, was renewed for two additional 13-week cycles.
Broker Michele Kleier, president of Gumley Haft Kleier and a principal character on the show, said she remained upbeat on the market, and had already scheduled a series of showings for September.
“I am not hearing from clients that they are losing their jobs,” she said. “We are not having the kind of nervousness we had last fall.
While it’s too soon to call it a full-fledged neo-Renaissance, Harlem is unquestionably happening. Buoyed by an influx of former downtowners and emboldened by a tradition of culture and creativity, the neighborhood is chockablock with new high-end shops, restaurants, music halls, lounges and even a luxury hotel. It’s all part of the quarter’s ongoing effort to establish itself as a must-visit Manhattan destination, even while it retains its distinctive character. Harlem may still be beloved for its hundreds of churches, elegant row houses, unexpected parkd tiny hos anme-cooking joints. But there’s another side of Harlem in the offing these days: sleek, chic and sophisticated. It’s Manhattan at its colorful best.
By HILARY STOUT
Published: July 8, 2010
IN the hierarchy of tradeoffs that a Manhattan apartment buyer inevitably has to make, one in particular has reigned supreme: if you wanted prewar charm you were probably going to end up in a co-op.
Although that is still the case, things are changing. Over the past decade or so, conversion to condominiums has become the preferred path for developers seeking to shift a rental building over to ownership.
William Rudin, president of Rudin Management, appeared on CNBC to discuss how lessening taxes for foreign real estate investors in the United States will spur a real estate market recovery. He also said the possibility of expanding the Public-Private Investment Program, the recent change in Real Estate Mortgage Investment Conduits rules and extension of the Foreign Investment in Real Property Tax Act are all good signs for a real estate market recovery. However, Rudin stressed the importance of lessening tax restrictions on foreign real estate investors. “There are billions of dollars waiting offshore for real estate in America. If the government lessens tax implications for foreign investors, there will be more activity in the market,” Rudin said. He added that if tax implications on foreigners are lessened, sales would be stimulated and create much needed activity in the overall market. In response to those opposed to lessening taxes for foreigners, Rudin said it’s about making a level playing field with other investments in the United States. “Foreign investors are looking elsewhere than the United States because of the high real estate taxes that are levied on them,” he said.
October 21, 2009 04:00PM
More Russian property buyers are looking for New York City real estate, according to an analysis of Russian investment trends by the Moscow Times. High-profile investors, such as Mikhail Prokhorov, who has been pursuing a $200 million deal with Atlantic Yards developer Bruce Ratner, has reportedly ramped up interest among Russian real estate buyers. The trend has caught some brokers, like Wilbur Gonzalez of Brown Harris Stevens, by surprise. “I expected the Russians to sit out 2009 and 2010, licking their wounds,” Gonzalez said. While some expect real estate prices in New York City to fall further, industry experts say that Russians investors are drawn in by the weak dollar and are viewing New York real estate for its long-term value. [Moscow Times]
East River Plaza
October 21, 2009 02:00PM
The East River Plaza and David Blumenfeld, a principal with the Blumenfeld Development Group
On Nov. 12, East River Plaza, the new big-box shopping center on FDR Drive in East Harlem, will see its first store opening. The 110,000-square-foot Costco wholesale warehouse club will be the first of several big name tenants, including Target, Best Buy and Marshall’s, to welcome customers at the new shopping center. Only 30,000 square feet out of an available 485,000 square feet is left unclaimed. The six-acre shopping site, which stretches from 116th to 119th streets, was developed by David Blumenfeld, a principal with the Blumenfeld Development Group. [NYT]
WASHINGTON (Reuters) –
The worst U.S. recession since the Great Depression has ended, but weak household spending as the labor market struggles to create jobs will slow the pace of the economy’s recovery, according to a survey released on Monday.
The survey of 44 professional forecasters released by the National Association for Business Economics (NABE) found that 80 percent of the respondents believed the economy was growing again after four straight quarters of declines.
“The great recession is over,” said NABE President-Elect Lynn Reaser.
“The vast majority of business economists believe that the recession has ended, but that the economic recovery is likely to be more moderate than those typically experienced following steep declines.”
Recessions in the United States are dated by the National Bureau of Economic Research. The private-sector group, which does not define a recession as two consecutive quarters of decline in real gross domestic product, often takes months to make determinations.
The current recession that started in December 2007 is the longest and deepest since the 1930s. It was triggered by the collapse of the U.S. housing market and the ensuing global credit crisis.
The NABE survey, conducted in September, predicted real GDP growth expanding at a 2.9 percent pace over the second half of this year. Output for the whole of 2009 is expected to contract 2.5 percent and next year, rebound to 2.6 percent.
Much of the anticipated recovery was seen driven by businesses rebuilding their inventories after aggressively reducing unwanted stocks of unsold goods to match weak demand.
Investment in the residential market would also add to growth, with the majority of the respondents in the survey convinced that the more than three-year housing market downturn was close to coming to an end.
HOUSE PRICES SEEN BOTTOMING
About two-thirds of respondents believed house prices would reach a bottom this year and the survey found that high house prices would not pose a threat to the sector’s recovery.
The survey predicted that the unemployment rate would rise to 10 percent in the first quarter of 2010 and edge down to 9.5 percent by the end of that year. The labor market was not expected to regain most the jobs destroyed in the current recession until 2012 or beyond.
The weak labor market would continue to weigh on consumer spending, slowing the recovery. The jobless rate climbed to 9.8 percent in September—a 26-year high—from 9.7 percent in August.
Labor market slack, combined with weak wage growth, meant inflation would not be an obstacle to the economic recovery and the Federal Reserve would not be under pressure to raise interest rates, the survey found.
“With improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation,” Reaser said.
The U.S. central bank was seen leaving its overnight benchmark lending rate near zero until late next spring, followed by measured increases that would take the rate to 1 percent by the end of 2010, the survey showed.
Despite signs of improvement in the financial markets, the majority of respondents believed that it would take sometime for them to return to normal. Only 29 percent reckoned this would happen in the second half of next year.
Respondents also expected the U.S. dollar to weaken further this year and into 2010, but did not see this contributing to a narrowing of the country trade deficit as the economic revival stimulates demand for imports.
The dollar has lost about 5.8 percent of its value against a basket of currencies so far this year, largely because of worries over the government’s growing budget deficit and expectations that the Fed will keep interest rates at super-low levels for a while.
Now is a great time to buy in the US as the market has bottomed out, according to an expert.
Nicholas Marr of property portal homesgofast.com said the sector has now reached its lowest point and prices are set to rise.
He stated that “investors and those seeking a second home in the US know that prices will now not get any lower”, adding that slow increases as foreclosures and unemployment persist in the next two years will then give way to stronger growth.
This will happen as the country’s jobs market recovers and wages start to rise again, the expert predicted.
Mr Marr suggested that Florida, Chicago, Detroit and the western area of New York State are all offering “superb” bargains at present.
Data released this week by the Federal Housing Finance Agency stated that there was a 0.3 per cent rise in house prices in the US between June and July.
This followed a 0.1 per cent increase in June.
by EricJ August 2009
IPIN discusses the merits for an imminent US recovery with expert opinion and feedback from the United States and contribution from its European team to reflect a global viewpoint.
The strong Euro allows speculators from the Old Continent to invest in US real estate market which remains sluggish since the subprime crisis.
L’euro, monnaie désormais plus forte que le dollar, permet aux spéculateurs du Vieux Continent d’investir dans le secteur immobilier américain, qui reste en berne depuis la crise des subprimes. (Reportage : E. Saint-Martin)
L’euro fort ne fait pas que des malheureux. De plus en plus d’Européens profitent de la baisse du dollar, et de la chute des prix de l’immobilier, pour investir aux Etats-Unis.
Au niveau national, les ventes de logements aux étrangers ont représenté 3 % des transactions l’an dernier, mais dans certains marchés comme New York ou Miami, c’est beaucoup plus.
Certains professionnels estiment même que les acheteurs étrangers sauvent l’immobilier américain d’une récession encore plus sévère.
Watch our partner Michel Madie on channel France 24…
Regarder notre partenaire Michel Madie sur France 24…
Washington D.C. (January 12, 2009) –
Foreign investors in real estate expect to spend significantly more in 2009 than they did in 2008. Compared to transactions completed by October 2008:
according to the results of the 17th annual survey taken among the members of the Association of Foreign Investors in Real Estate (AFIRE) and released today.
Read more …
From Home Depot to high-rise office buildings, Harlem’s upward trend is producing “root shock,” causing some residents to believe it is only a matter of time before they are displaced.
It isn’t news that just two or three years ago, Harlem had a paucity of bank branches, grocery stores and other basic amenities- or that now that more affluent people have started to move there, upscale shops and restaurants have followed.
But change can have surprising results. While welcoming safer, cleaner streets, longtime residents have found themselves juggling conflicting emotions. And those who enjoyed a measure of stability in the old Harlem now long for the past — not necessarily because it was better but because it was what they knew.
‘The majority of the stores, the 99-cent stores, they’re gone,’ said Gwen Walker, 55, a longtime resident of the General Grant Houses in West Harlem, giving one view. ‘The Laundromat on the corner is gone. The bodegas are gone. There’s large delis now. What had been two for $1 is now one for $3. My neighbor is a beer drinker, and he drinks inexpensive beer, Old English or Colt 45 or Coors — you can’t even buy that in the stores. The stores have imported beers from Germany. The foods being sold — feta cheese instead of sharp Cheddar cheese. That’s a whole other world.’”
Foreign real estate investors expect the U.S. real estate market to recover by the end of the second quarter of 2010, according to a survey released Wednesday by the Association of Foreign Investors in Real Estate (AFIRE).
Survey respondents were optimistic about the prospects for good returns, with more than two-thirds planning to invest in U.S. real estate before the end of the year.
About 31 percent said they were more hopeful now about the health of the U.S. real estate market than they were in January, 16 percent said they were more pessimistic, and 53 percent said their opinion had stayed the same.
The 200 members surveyed predicted that Washington, D.C., New York City, and San Francisco would be the first cities to recover, followed by Boston and Los Angeles.
Source: Association of Foreign Investors in Real Estate (06/17/2009)
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