Short Sales Hit Manhattan

Incase you dont know a short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. Search the recent sales listings and you’ll find dozens of advertised short sales, some being creative with their wording and saying something like “owner must sell.” Everything from town houses and co-ops to cond-ops and condos. Up until now, most short sales have been in other boroughs or the suburbs, but make no mistake- they are making their way into Manhattan. Property values are down as much as 25%, and many people who bought in 2006-07 are finding themselves underwater and grasping for a short sale. The New York Times tells some stories that will make you shake your head, but here are the basics of what Manhattan is looking at, beginning with a startling statistic:

Lis pendens filings (the first step in the foreclosure process for houses and condos) doubled in Manhattan from 334 in 2008 to 724 in 2009. There are 382 through the end of June this year.

And just because there are a growing number of short sale listings doesn’t mean they are happening quickly. While it is generally regarded as a softer landing for an underwater homeowner, it’s a laborious process involving many parties, many negotiations, and many months to even have a chance of happening.

First there is the art of pricing by the seller- low enough to create interest (and hopefully a bidding war) but not so low as to raise objections from lenders. Banks will never broadcast how much of a loss they are willing to take on a short sale, and negotiations can often come down to getting everyone to offer something the bank will agree to. Lower than list price will work, but lowballing an offer will never get approved. A seller must first get an application in hand, then submit it to the bank, then convince the bank in writing that they can’t pay the mortgage.

Then, when negotiations do start, buyers have to negotiate with the seller and the seller’s lender, and the seller has to negotiate with the lender as well around the terms of forgiving what’s left owed on the mortgage, whether the lender will sue for the loss and whether the seller will have to pay income taxes on a forgiven loan. To top that off, many mortgages are owned by more than one investor, all of whom must agree to the terms. And then there are everyone’s fees… If the short sale does go through, the seller tends to walk away with nothing to show for it- other than getting out from under a mortgage they couldn’t afford.

In the end, it can easily take more than 6 months or more, and banks routinely decline sales even after that long. Unfortunately, for both the buyers and sellers, the only thing moving fast about short sales is the number of them being listed.

Photo Credit: TheTruthAbout

Sting’s Duplex Price Says Ouch!

After first listing it in 2006 for $24.9 million, Sting chopped the price on his 88 Central Park West duplex apartment to $19 million more recently- and the sale is now final at $17.75 million. That’s a 29% decrease from the original listing price. Someone may need to call the Police, the price dropped so much- that’s got to sting… So sorry, I couldn’t help myself.

Sting bought the 6,600 square foot apartment, four bedroom spot from Billy Joel in the 1980’s, but the string of rock and roll royalty owners will fade with now owner, Michael S. Naify. He comes from San Francisco Bay area, not the rock and roll hall of fame.

Photo Credit: Scott Ableman

The Duke Mansion Up for $40 Million

The Duke Semans mansion, one of just a handful of mansions remaining on the Gold Coast of Fifth Avenue, is about to sell for $40 million. If it goes through, the sale would be the biggest townhouse sale since the beginning of the recession. Along with the talk of an impending sale of Brooklyn’s Clock Tower penthouse, is this an indicator that the luxury market is coming back to life?

The 19,500-square-foot mansion has 11 marble fireplaces, 12 bedrooms, 14 bathrooms, three elevators and a long history of storied owners. It was originally built in 1901 with tobacco money by ancestors of Doris Duke, and current owner Tamir Sapir, a native of the Republic of Georgia, bought it for $40 million in 2006 after working his way up from a taxi driver to an oil billionaire. The rumor mill says that the buyer is an unidentified Russian, but not Nets owner Mikhail Prokhorov.

According to the NY Post, the mansion needs major renovations, and that Sapir’s plans to turn it into an art gallery for his exotic collection never made it to the canvas. The building has been Landmarked since 1974 so whatever is going to be done to the interior the exterior will remain a reminder of NYC storied past.

Photo Credit: NYPost

Will Record Low Mortgage Rates Keep Dropping?

Mortgage rates dropped to an average of 4.59% for a 30 year fixed-rate mortgage last week, the lowest ever recorded by Mortgage Bankers Association since they began keeping track in 1972. And they may not stop there- Zillow’s Mortgage Marketplace reported the average at 4.37% on Tuesday of this week.

While the low rates aren’t creating a spike in demand, new-purchase mortgage applications did show an increase for just the second time in the last two months, according to the Wall Street Journal. We can attribute some of the drop in applications and sluggish growth to the home-buyer tax credit that pushed demand to the early part of the year, but that doesn’t change the fact that home purchases are down 40% from where they were in April.

The action is in refinancing. Applications to refinance were up 9% this week, and up close to 30% over the past month, comprising a full 80% of mortgage activity for the week. But even here there isn’t as much activity as you would expect. Many who would have jumped at refinancing for this rate a few years ago have to consider loss in equity, a lower income, or changes in their credit. And many are looking to sell their homes in the next few years, so closing costs come into play.

How low will mortgage rates drop past record lows until demand picks up enough to stabilize them? After a tumultuous two years and the home-buyer tax surge, answering that question will be tough.

Photo Credit: andrew mace–

Is Someone Buying Brooklyn’s Clocktower Building?

Back in February I gave you the video tour of Brooklyn’s Clocktower Building at One Main Street in DUMBO. It was listed at $25 million. While the building itself is almost as amazing as the views it offers, charging 3x what any other condo has ever sold for in Brooklyn is, well, dumbo. Who’s going to pay that? As it turns out, somebody out there is going for it…

The Real Deal reports that the listing is off the market and negotiations are underway. According to them, there is no contract signed yet, as the mystery buyer “is not sure whether [he wants] to buy it or rent it, or rent it and then buy it down the road.” The four bedroom, three and a half bathroom apartment with its incredible views of New York Harbor and the Brooklyn Bridge through four 14 foot glass-faced clocks was created by David Walentas, founder of Two Trees, beginning in 1998. If he gets anywhere near his $25 million asking price it will dwarf Brooklyn’s largest condo sale ($8.495 million) and its most expensive home sale ($11 million). The way it sounds from The Real Deal, it’s only a matter of time…

Photo Credit: Curbed & The Real Deal

Manhattan: The U.S.A.’s Most Expensive Parking Space

If you park a car in Manhattan with any kind of frequency, you may find yourself walking from the lot to the office shaking your head and thinking, “It’s so expensive to park here…” And, in fact, you’re right. According to a Wall Street Journal article, parking in Manhattan is, indeed, more expensive than anywhere else in the country. Specifically, Midtown and downtown Manhattan have the highest monthly rates, Midtown charging a median of $538/ month, and Downtown asking $529/ month.

The Good News

There is a silver lining in all of that green: both of those rates are down from last year. Midtown is down 2% and Downtown 6%. What’s more, the City is not the most expensive place to park in the world. According to Colliers, eight other central business districts are more expensive, the most expensive being London where monthly parking costs $933. At the same time, the daily parking rate in Downtown is $31, down 18% from 2009 and lower than either Boston or Honolulu. Midtown rates are still the country’s highest, though down 9% from last year, at $40/ day.

Tellingly, the use of public parking is also down. According to long-term trend numbers, The Department of City Planning shows that the number of people driving into Manhattan is down 57,000 between 2000 and 2007, even though the number of jobs increased by 212,000. While the job numbers have surely changed since 2007, I would guess that public transportation use has gone up as well.

Photo Credit: Daquella manera

Are Appraisal Numbers Intentionally Lowered?

Have you had the strange feeling that lenders are lowering the numbers on appraisals? Hearing stories about deals that are all set to go- contract signed, buyers have the mortgage, you’re ready to sign the papers- until the appraisal comes back dramatically lower than the price in the contract and the lender demands the mortgage is cut. Of course you say no and suddenly the deal is off.

It’s not just a strange feeling- it’s happening across the country. The Real Deal reports http://therealdeal.com/newyork/articles/low-appraisals-sabotage-more-deals that lenders may “unilaterally be lowering the numbers on appraisals submitted to them.” Why? To avoid accusations that the loans they want to sell to Fannie and Freddie are based on even slightly inflated appraisals.
Even Frank Gregoire, the vice chairman of the National Association of Realtors’ Appraisal Committee, says it’s a big problem, and he points to high numbers of sales “sabotaged by lenders and underwriters arbitrarily reducing the value estimate.”

Here’s what happens: The lender gets a cheap electronic valuation based on public data with no on-site visit and puts that up against the numbers from the appraiser. If there is any difference, lenders will simply cut the value and/or demand an explanation from the appraiser.

NEW RULE

As of September 1 all this may change, as that is the date Fannie Mae will prohibit lenders from changing appraisers’ numbers, requiring instead that they contact the appraiser to work it out or order a second appraisal. Appraisers are, understandably, happy, and they think buyers should be too. The comparisons used by electronic systems can be wildly inaccurate, and the Real Deal even tells one story of a “comp” being a vacant lot, which would obviously come in well under the home being appraised. Add to that the growing use of inexperienced appraisers by some management companies and you can see why the situation is deteriorating.

Which is why Fannie Mae’s new “appraiser selection” standards will be a big shift. They want appraisers to “be experienced, ‘have the requisite knowledge’ about local market conditions, plus access to all local data sources.” They even say that experience is more important than fees or turnaround times.

When September comes, look for less of those strange feelings and more honesty in appraisal numbers to come.

Photo Credit: Patrick Q

El Rushbo is Leaving New York

Rush Limbaugh has been a consistent hater of New York taxes. With shows boasting titles like “El Rushbo to New York: Drop Dead,” his feelings have about as much subtlety as the ornate decor of his opulent condo. Making good on his promise to get out of New York because of the high taxes, Limbaugh’s penthouse at 1049 Fifth Avenue has been sold. It went for $11.5 million, after first being listed for $13.95 million in March and seeing a price chop of $1 million in April.

The condo is full of opulence. From the hand-painted ceiling murals to the gold leafing, well, everywhere. It has 10 rooms, including a phenomenal 30-foot-wide living room with fireplace and 4 terraces overlooking Central Park. Did he take a price cut? Sure. But he bought the place for just $5 million in 1994. He still has those taxes to pay the transfer taxes, but he’s still more than doubling his money. And taking it to Florida.

Photo Credit: Curbed

Manhattan Market Report for 2nd Quarter, 2010

Manhattan 2Q 2010 Market Report

The 2009 Manhattan real estate market is beginning, if slightly, to recede into the past. This year’s market is stronger than anyone could have hoped for last summer, which means we can all spend a little more time worrying about how to beat the heat than if sales are going to pick up. In fact, they are up 15% from last quarter and 80% from last year- something to smile about. While the first time home buyers’ tax credit is over, its effect was strong and the purchasing pick-up is making its way into higher end properties. The rest of the year looks to be driven by the dramatically low mortgage rates and lower, stabilizing prices.

2Q Market Report Overall

• There were 2,756 sales in the second quarter, up a dramatic 79.9% from 1,532 sales last year and up 15.6% from 2,384 sales in 1Q. This is the highest number of sales since 2Q 2008, and above the 2,411 quarterly average over the past decade.
• The median sales price for a Manhattan apartment was $899,000, up 7.6% from $835,000 last year and up 3.6% from $868,000 in 1Q.
• Average sales price rose 9.1% to $1,432,712, up from $1312,920 last year, and up 0.4% from $1,426,994 in 1Q.
• Price per square foot remained stable, down just 0.5% to $1,051 per square foot from $1,056 last year, and up from $1,038 in 1Q.
• Available listing inventory (excluding shadow inventory) was 8,157, 13% below the prior year but up 1.6% from the prior quarter.
• “Shadow inventory” is estimated at 6,500 units.
• Average Days on Market was 105 days, down from 162 last year and down from 124 in 1Q.
• The Listing Discount was 9.1%, up from 7.8% in the prior year quarter and up from 5.4% in 1Q.

Manhattan Co-Op Market

The Co-op market saw a sharp rise in sales, comprising 43.7% of all apartment sales this quarter, though still under the 5 year average of 47.9%. Studio and 1 bedroom apartments were down from 61% to 56% of total sales, indicating a rising demand for the upper-end of the co-op market. There was also an encouraging overall stabilization of price indicators.

• There were 1,203 sales in 2Q, up 65.2% from last year and 8.3% from 1,111 in the last quarter.

• Listing Inventory was 3,948 at the end of the quarter, 10.3% below last year at this time, but up 3.6% from last quarter. The monthly absorption rate is 9.8 months, almost one month faster than the past decade’s average of 10.5 months.

• The median sales price was $697,501, 7.5% higher than last year’s 2Q $649,000 and 1.8% higher than last quarter.
• Average sales price was $1,113,173, 4.2% higher than last year’s 2Q but 1.8% below last quarter.
• Price per square foot was $943, 2.8% higher than last year’s 2Q mark and 3.9% higher than last quarter. By region, the East Side was at $1,001 per square foot, Uptown at $653 per square foot, Downtown at $910 per square foot, and the West Side at $946 per square foot.
• Co-ops averaged 92 days on market, down from 141 last year at this point and down from 110 in the prior quarter.
• The Listing Discount was 7.3%, down from 8.7% last year but up from 3.8% in 1Q.

Manhattan Condo Market

The big story in the condo market is that sales numbers are up, as they are all over the City, but the price indicators remain mixed. Notably, the listing discounts have risen, pointing to a trend of sellers testing the market by setting higher prices but meeting resistance from buyers.

• There were 1,553 sales, almost double the 804 sales in last year’s 2Q, and up 22% from the 1,273 sales last quarter.
• The listing total was 4,209 units, excluding “shadow inventory,” which was 15.5% below last year’s 2Q and virtually identical to last quarter’s 4,218 listings.
• The median sales price was $1,100,000, which is 10.1% higher than last year at this point, and 3.3% higher than last quarter’s $1,065,000.
• The average sales price was $1,680,236, up 9.5% last year at this point, and holding steady with last quarter’s $1,690,399.
• The average square footage of properties sold was 1,482 square feet, up from 1,299 square feet at the same time last year.
• Average price per square foot was $1,134, down 4% from last year at this point, and down 1.7% from $1,154 in 2Q.
• Average days on market was 115, down dramatically from 181 in 2Q of last year, and down from 135 in 1Q of this year.
• The listing discount was at 10.5%, up from 7% last year and 6.7% last quarter.

Manhattan Luxury Market

The luxury market is seeing signs of renewed life, working off excess inventory and seeing price indicators stabilize.

• There were 1,304 listings over the $3,000,000 threshold, 29.3% fewer than 1,844 at this time last year and 13.2% fewer than the 1,502 listings last quarter.
• The median sales price for luxury apartments was $4,093,365, 11.8% higher than last year’s $3,660,608 but down 10.7% from $4,582,125 last quarter.
• The average sales price was $5,169,161, up 8.6% from last year at this point, but down 6.9% from last quarter.
• Average price per square foot held steady at $1,843, changing little from last year’s $1,848 and last quarter’s $1,881.
• The luxury market averaged 146 days on market, well down from 182 days at the end of last year’s 2Q as well as last quarter’s 193 days.
• The listing discount was 6.4%, less than last year’s 8.6% but higher than last quarter’s 3.6%.

Manhattan Loft Market

Like in other parts of the market this quarter, sales were up. But unlike any other sector, the sales in the loft market were up 263.9% from last year! That’s the good news. Less emphatic are the price indicators, that brought back mixed results.

• There were 262 loft sales, up that amazing 263.9% from 72 last year, and a 45.6% increase from last quarter. The mark was well over the 193 sale quarterly average over the past 20 years.
• Listing inventory was 548, 25.6% below last year at this time and 1.4% below last quarter.
• The median sales price was $1570,000, 15.9% below last year at this point, but up 12.1% from last quarter.
• The average sales price was $2,057,776, 5.7% higher than last year at this time and 0.9% higher than 1Q.
• Price per square foot was $1,145, down 4.3% from last year at this point and 2.1% up from last quarter.
• Days on market was 80, the quickest number in over 10 years. Last year at this point the average days on market was 138, and last quarter was 146.
• The listing discount was 5.4%, lower than last year’s 7.2% but above last quarter’s 3.3%.

The Impact of Closing St. Vincent’s

When a major business closes, it’s hard to know exactly what the impact on the surrounding community will be, but there are sure to be economic and real estate ripples. St. Vincent’s Hospital closed at the end of April, and the community lost 3,500 hospital employees, thousands of visitors to patients, and hundreds of suppliers as customers. Since the closing, more than 20 small businesses have closed in the neighborhood. The majority are in food service or retail.

The Greenwich Village-Chelsea Chamber of Commerce has been trying to assess and deal with the fallout, and New York University is doing a long-term study. Early numbers from the chamber’s own survey of Greenwich Ave. and Seventh Ave. businesses show that half the stores lost anywhere from 20 to 50% of their business. Many businesses are reducing hours, inventories and staff numbers to stay afloat.

Tony Juliano, the chamber’s president, put the matter plainly in the Villager: “People have been scrambling to find new healthcare for the community. But up till now, few have been looking at the impact on business, and that’s our job at G.V.C.C.C.”

In addition to looking at lower sales numbers, businesses are not seeing their rents go down even with the rising commercial vacancies. For example, Artepasta’s former Greenwich Ave. at Perry St. space is offered at $40,000 per month.

What’s Being Done?

- The GVCCC is currently talking with landlords about lowering or at least keeping rents static, and local assembly members are working around the politics.

- Google is also planning to create an Internet portal for every small business in the City, allowing merchants to review and change for accuracy.

- Other business owners are calling for the community to band together and patronize each others’ storefronts.

- Local meetings are being held to alert business-owners about free services, counseling, and loans.

With 20-50% drops in business and rents not moving, something has to give. A lot depends on what will replace St. Vincent’s, which was in operation for 161 years, and how the property will be developed.

Photo Credit: Mattie_Photos

The Luxury Market is Sitting Pretty

After being listed for just nine days, hedge funder John Read Taylor shelled out $22 million for an apartment at 1068 Fifth Avenue. Listed at $17.5 million, Taylor saw their price and raised them $4.5 million. That’s almost a 25% rise.

The 4 bedroom, 4 bathroom co-op is designed “for preeminent collectors of contemporary art,” according to Curbed. What does that mean? The unit has mobile walls to hang your art, so you can display or store as you see fit. Designed by Shelton, Mindel & Associates, as a “private residential gallery,” it takes up the entire eleventh floor. Large windows offer great views of the city and Central Park. The floorplan includes a library with a fireplace and a windowed eat-in kitchen. 

I don’t think this is a indicator of the market on the whole but it does say something about the relative value of real estate. Basically, its worth what someone is willing to pay for it.

Photo Credit: CurbedNY

New Appraisal Rule Fallout

The Home Valuation Code of Conduct passed in May of 2009 with the goal of ensuring appraiser independence. But the rule has also produced low-ball appraisals that can shatter deals, and appraisers say it has harmed appraisal quality. It seems the only group happy about the law are the mortgage lenders, who have seen their business spike because of the rule. The mortgage-broker and real-estate industries want a measure included in new financial regulation legislation to end that rule.

Are new appraisal rules hurting Manhattan home values?

The rule is based on the idea that inflated appraisals helped run-up home prices over the last ten years. Loan officers and mortgage brokers typically worked regularly with the same appraisers, and lenders felt that the partnerships led to rising home values. Now much of the business goes to vendors that specialize in “farming out” appraisal requests to their networks, which some say leads to pushing appraisers to do more work in less time, driving fees down industry-wide and damaging appraisal quality. Some of these “middle-man” firms are owned by large mortgage companies like JP Morgan or Citigroup.

Fannie Mae and Freddie Mac adopted a Code of Conduct last Spring as part of a settlement in the New York state attorney general’s probe of their existing appraisal standards. In that case, realtors and mortgage brokers were successful in inserting language in the House-passed financial-regulation bill to put an end to the new protocols and push federal regulators to create a new set of rules. The rub is that the language has not been included in the most recent draft in Congressional negotiations.

Bill Garber, chief federal lobbyist for the Appraisal Institute, told the Wall Street Journal that appraiser fees have dropped by up to 60%. He believes that new broker licensing laws and other state laws do enough to keep brokers and appraisers from creating questionable partnerships.

National Association of Mortgage Brokers CEO Roy DeLoach adds that out-of-town appraisers are not credible and degrade home value. “It’s basically hollowing out the equity in communities whether you intend to sell or not,” he says.

Photo Credit: caruba

Top Ten Biggest Manhattan Mansions

While Manhattan is certainly a city of condos and coops, it also has some of the biggest and most beautiful townhouse homes anywhere. The Real Deal highlighted the top ten single-family townhouses in Manhattan last week- here are the highlights.

Manhattan’s Biggest Homes

1. 4 East 75th Street. 21,700 square feet

The Harkness Mansion, built in 1899, is the only single-family townhouse over 20,000 square feet. J. Christopher Flowers purchased the townhouse in 2006 for a record $53 million. It is currently owned in C/O Neufield Doudna.

2. 5 East 68 Street. 19,746 square feet

Also built in 1899, it serves as the consulate of the Republic of Indonesia but remains classified as a single-family home. Currently owned by the Republic of Indonesia.

3. 690 Park Avenue. 19,580 square feet

Another from 1899, the Henry P. and Kate T. Davison House used as the Italian consulate and owned by the Republic of Italy.

4. 9 East 71st Street. 18,814 square feet

Built in 1910, this townhouse was previously owned by Leslie Wexner, the founding chairman of The Limited. He purchased it for $13.2 million in 1989. The current owner is Nine East 71^st Street.

5. 4 East 80th Street. 17,676 square feet

Originally commissioned by Frank Woolworth for his daughter, Barbara Hutton, and build in 1915, this home was also recently owned by Lucille Roberts, the late fitness entrepreneur. The current owner is 4 East 80^th Street LLC.

6. 38 East 69th Street. 16,800 square feet

Held by Erica Rlty. Corp. since 1966, this townhouse was constructed in 1910.

7. 1130 Fifth Avenue. 16,685 square feet

Built in 1914 and formerly used as the International Center for Photography, it was purchased in 1999 for $17 million and converted back into a single-family home. The current owner is Three Dogs LLC.

8. 4 East 67th Street. 16,416 square feet

Constructed in 1899 and used by the Japanese Consul General. Its current owner is the Government of Japan.

9. 926 Fifth Avenue. 16,367 square feet

This home was once on the market for $23.8 million for a 49 year leasehold. Its current owner is Torigua, S A Ltd.

10. 14-16 East 67th Street. 14,626 square feet

After being owned and lost by Penthouse publisher Bob Guccione in 2006 to creditors it has been renamed Milbank Mansion to help it sell. The current owner is Philip Falcone who bought it for $49 million in 2008.

All Photos: The Real Deal

Stocking Your New Bar on a Budget

I offer a lot of information on how to get the right condo or home, but what about once you get that perfect spot? It’s time to sit back and drink it all in- figuratively and literally. Manhattan is a cocktail city- there’s even one named after us. You want to make sure when you entertain you do it in style, but also keep it within your budget. You know you need vodka, gin, rum, tequila, whiskey and some good liqueurs. Here is a roundup of LeNell Smothers’ Kitchen Daily guide to help you create a great bar for yourself and your new home- no matter what your budget!

The $100 Bar: Solid Choices that keep your wallet stocked, too.

Vodka: Stick with a classic and reliable bottle of Burnett’s or Stoli.  

Gin: Again, Burnett’s makes a fantastic bottle for the price. If you’re feeling more adventurous, try Broker’s for a more spicy, traditional London Dry style.

Rum: You may not know it, but Brugal is an inexpensive, reliable white rum from the Dominican Republic. It’s in the well at cocktail clubs across the city who know what they’re doing. LeNell also recommends Barbancourt 3 Star for a mellower dark rum from Haiti.

Tequila: El Jimador is the choice for the best bottle for your money. Or try Cazadores, which does brisk business in Mexico.

Whiskey: Easy. Wild Turkey 101 Bourbon. Maybe try Rittenhouse Rye.

Liqueurs: You can’t have a bar without Noilly Dry Vermouth 375ml and Martini & Rossi Sweet Vermouth 375ml. And 375ml Hiram Walker Triple Sec 375ml is good to have on hand.

The $200 Bar: For the special flair.

Vodka: Feeling green? Rain is an organic, sweet white corn-based choice with no potato in it. Another solid choice is Vertical from the Chartreuse monks in France, bless them.

Gin: You want Plymouth. To be called “Plymouth,” it has to come from Plymouth, England, and they only have one distillery left. Beefeater is another good choice for a classic London Dry.

Rum: Try Sagatiba Cachaca, made from sugar cane juice in Brazil. Add anything you want with lime and you’ll be happy. If you’ve got ginger beer, try pairing it with Gosling’s Dark Rum from Bermuda.

Tequila:. Milagro Blanco is clean and crisp. And Herradura Reposado (reposado = rested) is aged for under one year in oak barrels, giving it a smooth edge.

Whiskey: No need to go too far- Jim Beam Black Label is ideal neat or in cocktails. For a full flavor without the smoky taste, try Clontarf Black Label.

Liqueurs: Spend the money on a bottle of Cointreau. If you want something different, go for Punt e Mes, a red vermouth with rich, full flavor.

The $500 Bar: When you want the best.

Vodka: Charbay is made by a small family producer with all copper pot distillation spirits in California- three types of grain and unfiltered production gives it an extra full mouth feel. Another small distillery choice is Tuthilltown Spirits Apple Vodka, made from New York apples with no other flavoring. For a double-distilled bottle, grab the “Heart of the Hudson.” Or, for triple-distilled, get “Spirit of the Hudson” bottling.

Gin: Junipero is made by San Francisco’s Anchor Steam Beer brewers. They know what they’re doing, and create a bold and spicy gin. For the more adventurous, Hans Reisetbauer distills Blue from wheat and corn spirit base, plus over 20 botanicals.

Rum: Want an amazing cachaca with no hangover? Mae de Ouro Cachaca is your choice. Slightly aged in Scotch barrels and very pure. Or try Rhum JM from Martinique, made from sugar cane juice instead of molasses.

Tequila: Casa Noble Reposado is a great choice aged just under a year, when it would be an anejo. Most tequilas are made from agave cooked in clay ovens. Partida Blanco uses stainless steel ovens resulting in a very clean, elegant spirit. The blue ceramic bottle is an elegant addition to your liquor cabinet.

Whiskey: Four Roses Single Barrel Bourbon is your choice if you like a lot of rye in your bourbon. For a bottle from the tiniest distillery in Scotland, choose Edradour 10 year Scotch.

Liqueurs: Prunier Orange Liqueur- cognac based and sure to satisfy with an orange peel finish. Also, Vya Dry and Sweet Vermouths are solid choices from Quady winery in California. For the adventurous, Fee Whiskey Barrel Aged Bitters are aged in American whiskey barrels for extra depth, and Regan’s Orange Bitters carries a hint of cardamom.

Shopping List

For a quick take, sip on these budgeted lists:

THE $100 BAR SHOPPING LIST:

VODKA: Burnett’s or Stoli
GIN: Burnett’s or Broker’s
RUM: Brugal or Barbancourt 3 Star
TEQUILA: El Jimador or Cazadores
WHISKEY: Rittenhouse Rye or Wild Turkey 101 Bourbon
LIQUEUR: Hiram Walker Triple Sec 375ml, Noilly Dry Vermouth 375ml, Martini & Rossi Sweet Vermouth 375ml

THE $200 BAR SHOPPING LIST:

VODKA: Rain or Vertical
GIN: Plymouth or Beefeater
RUM: Gosling’s Dark or Barbancourt 3 Star
TEQUILA: Herradura Reposado or Milagro Blanco
WHISKEY: Clontarf Black Label or Jim Beam Black Label
LIQUEUR: Cointreau and Punt e Mes

THE $500 BAR SHOPPING LIST:

VODKA: Charbay or Tuthilltown Spirits Apple Vodka
GIN: Blue or Junipero
RUM: Mae de Ouro or Rhum JM
TEQUILA: Casa Noble Reposado or Partida Blanco
WHISKEY: Four Roses Single Barrel Bourbon or Edradour 10 year Scotch
LIQUEUR: Prunier Orange Liqueur, Vya Dry and Sweet Vermouths, Regan’s Orange Bitters and Fee Whiskey Barrel Aged Bitters

Photo Credit: :: Wendy ::

Material Girl Flexes a $1.7 Million Renovation

Madonna is building a million dollar gym in her townhouse.

What more could the Material Girl want than her $32 million Upper East Side triple-wide townhouse? How about a $1 million plus gym? The Real Deal and NY Post report that she’s flexing her financial muscle and adding 1,614 square feet to her mansion, for a grand total of 13,847 square feet. And then there’s the cellar, and the 3,000 square foot garden.

In addition to the gym, she’s also gutting the 10 bedrooms and 13 bathrooms. There will be a new master suite on the third floor… and a hair salon across the hall with a separate closet for her luggage. There will also be a second master bedroom. On the same floor. Further down, she’ll be adding a wine cellar and a playroom.

Photo Credit: TheRealDeal

Mortgage Math Tests?

Who's got the math skills to get the mortgage?

Should you have to take a math test to qualify for a loan? Columbia University assistant business professor Stephan Meier thinks maybe you should, and he has the survey results to back up his question. According to a New York Times report on Meier’s survey, people with poor math skill are three times more likely to go into foreclosure.

Try these two problems to see how you stack up:

1. What is 300 divided by 2?
2. What is 10% of 1,000?

In 2008, Meier surveyed around 340 borrowers from Connecticut, Massachusetts and Rhode Island who had taken out subprime loans in 2006 or 2007. At that point, none of them were in foreclosure. 16% of them got one of those two questions wrong, and the answers were consistent across education and income levels.

21% of respondents with math abilities in the lowest quarter of the survey have gone into foreclosure. Only 7% in the top quarter have. So what does Meier think? “Maybe start adding math tests to the process, and screen them away,” he says. Unlikely. But it does imply that basic math may have something to do with handling your finances.

“There are a lot of financial decisions you have to make as a homeowner, but some of the more difficult decisions have to do with how to rebudget if you’re hit by an income shock, which a lot of people had to do during the recession.” – Stephan Meier

While there are computers that work out the math when figuring projections on a mortgage, there is something to be said for basic budgeting, and for knowing that the survey answers are 1) 150 and 2) 100.

Eileen Anderson, a senior vice president of the Community Development Corporation of Long Island, a nonprofit housing organization that counsels borrowers who are struggling through foreclosure-avoidance, says that no one is exempt.

As Anderson says, “People say they’re doctors, so they don’t really need it. So what? We see doctors who took out loans they didn’t understand, and who are in foreclosure now.”

Photo Credit: Sarunas B.

Mae West’s Celebrity Upper West Side Mansion

Want to live in the mansion Mae West once graced? Her former Upper West Side residence at 266 West End Avenue is listed at $30 million, pending the complete restoration currently in progress.The building is 28 feet wide with 14,000 square feet of space. It was built in 1896 seemingly out of limestone and pure elegance.

The five floors plus a garden and roof deck, will eventually boast a ball room, library, conservatories, sauna, steam room, elevator and radiant heating. Add to that the touches like a carved oak staircase, solid bronze windows, carved fireplace mantles, tiger oak floors, mosaics, and… you get the idea. It’s amazing.

Current owner Todd Wider, a documentary filmmaker and plastic surgeon, seems to be combining his two passions in bringing this mansion back to beauty. And he knows how to work a deal: he bought the house in 2004 for $1.2 million- from one Jedd Wider, attorney for the seller’s estate.

Photo Credit: Curbed

Why Section 1031 Will Cut Your Taxes

1031 Exchanges

If you own one or more investment properties, you probably know about Section 1031 of the Internal Revenue Code. If you dont know abot 1031 exchanges,  it allows an owner of an investment property to defers the tax consequences around a property sale. Basically, it allows you to roll over the proceeds so you can buy anther investment property.  To quote directly from a recent AppleSeed.com article, here are the conditions for using the 1031 exchange:

• The property sold must be an investment property not a primary home.
• The new property needs to be “like-kind” and of equal or greater value to gain the full benefit.
• The new property must be identified within 45 days of closing on the existing property.
• The new purchase must be made within 180 days of the said sale.
• All of the sale proceeds (held in escrow until the time of the new purchase) must be used towards the purchase of the new property.
• The initial sales contract must designate the property sold as a 1031 tax exchange candidate.

Many believe that the use of 1031 exchanges will increase in the next year or so. Their rationale is that current long-term capital gains tax will rise from 15% to 20% by next year, and that there are rumors that President Obama will push for it to go up to 24% or higher in the coming years. Section 1031 is already used by many investors to defer tax payments and instead leverage those funds to purchase another property, in turn raising the return potential.

If you are dealing with investment properties in the current market, educate yourself about Section 1031 and give me a call. I’m happy to help.

Photo Credit: andrew mace–

Will Ferrell in the West Village

Will Ferrell and family are moving to the West Village

You stay classy, New York City… Ron Burgundy is moving to town. After waiting in contract since March, Will Ferrell and his family closed on a 2,699 square foot loft at 345 w 13^th Street for $4.2 million. The purchase was finalized by Ferrell’s trustee Matt Lichtenberg.

The cost is actually a bit less than the $4.4 million Joseph A. Lanasa III, a hedge fund manager, paid for it in 2006. Because the property was never officially on the market there are no listing photos. Instead, here are some floorplan options for the loft:

Image Credits: Curbed

Roth Replants the Plan to Move Madison Square Garden

Remember the plan to move Madison Square Garden that came and went just before the recession? Developer Steven Roth is trying to cultivate support to replant the arena once again. The plan is to move M.S.G. one block west, taking it off of Penn Station and moving it to where the James A. Farley Post Office is now. Roth has reportedly spoken with Garden president Hank J. Ratner and James L. Dolan of the Garden-controlling family, not to mention City Hall officials. According to Roth’s new plan, the post office building would become an adjunct to an expanded Penn Station, to be renamed Moynihan Station. The current Madison Square Garden would be razed and replaced by a retail mall.

Will Madison Square Garden move a block away?

For their part, Garden officials say that their massive, planned renovation is moving ahead.

“The process to transform M.S.G. is well under way, and any other option that may or may not be available is not being considered, period. This transformation is the best option for our customers, partners and all of New York.” — Barry Watkins, a spokesman for the Garden.

Roth argues that the renovation could actually be more expensive and disruptive than originally thought, and that New York could still end up with an arena inferior to what the Nets are building in Brooklyn.

There are two major changes from the 2008 plan, removing its most controversial and most popular aspects. The former contained a controversial component that created a special zoning district. That new zoning district concept was unpopular because it could have been used to create development rights for Roth’s Vornado Development Group to build skyscrapers in the surrounding neighborhood. Also absent from the revived proposal is the expansion or renovation of Penn Station, which was largely what made it so popular with civic and business groups last time around.

Photo Credit: Daniel Morris

Replacing A Wood Floor

Replacing A Wood Floor

If you live somewhere with wood floors for long enough, sooner or later it comes time to do something about the ground you walk on. If it’s that one nail creeping out or the extra wear on that section there, it may just need to be refinished. As they say, most wood floors can be refinished at least 5 times and can often go 15 or 20 years in between.

But if it’s time to replace rather than refinish, maybe you put it off longer than you should because it seems like such a project and who’s got the time? Brick Underground offers a great step-by-step guide about what to consider and where to start.

Here are some highlights to think about:

1. Prefinished vs. unfinished:

They recommend choosing unfinished to avoid the glossy factory finish. But if you do choose to go with pre-finished, as the materials and installation can be less expensive, they point you toward getting solid wood as floors with just a wood veneer on top can’t be sanded so you’ll have to buy a new wood floor much sooner.

2. Cost:

Replacing an unfinished wood will cost anywhere from $12 to $30 per square foot, depending on the type of wood, grade (quarter sawn or plain sawn), length and width, and any other special design elements. Prefinished solid woods start at a lower price point.

3. Timing:

Whenever you choose to do the replacement, you will have to move out all of your furniture and essentially move out. The entire process will take 10 days to 3 weeks. If replacing your floor is part of a larger renovation, it will typically happen before new baseboard installation but after new walls are up.

4. Type of wood:

Penny Fallmann May, the author and an architect, recommends quarter-sawn oak, quarter-sawn maple, or Brazilian cherry. No matter your choice, she emphasizes that the wood should be hard. One of the key issues in selecting wood flooring is that the wood be hard.

5. Board size:

They recommend wider boards for a more elegant look, but to keep it under 3 1/2” to avoid the ends of the boards curving up. For length, choose something over 3’ – otherwise you end up with a floor that looks like leftover wood.

6. Special touches:

Patterns or special borders are a great option to make the change noticeable and unique.

7. Soundproofing:

Replacing a wood floor offers the ideal time to install sound-proofing as well. They recommend a rubber-like material similar to felt, but talk to your contractor about the options.

8. Finishes, stains, contractors and clean-up:

For a detailed idea of what you should look for in the finishing process, read Penny’s article from earlier this month.

Photo Credit: Jeff Trojan

Celebrity Real Estate: Daniel Craig’s New Penthouse at 53 Warren Street

Craig. Daniel Craig. He’s the new owner of an impressive Tribeca penthouse at 53 Warren Street. Craig won a bidding war with an all cash(!) offer of $1.9 million for the 1,121 square foot penthouse.  The British actor famous for playing James Bond and his longtime girlfriend Satsuki Mitchellwill, American film producer, will enjoy a duplex loft with 20 foot ceilings and floor-to-ceiling windows. And when it’s time to take in the scenery, they can take the loft’s private elevator to one of three stunning terraces.

Here’s a look at the floorplan:

Image Credits: Curbed

Manhattan’s Shadow Inventory Steps Into the Light

The “shadow inventory” of condos and apartments is starting to come into the light. Projects that were placed on hold in 2008 to wait out the recession are going back on the market for a variety of reasons. Condo sales are beginning to pick up again overall, banks are making loans to developers again, and some developments that were taken over by banks are looking for a return.

Manhattan's 6,500 shadow units in the first quarter.

As Crain’s points out, there is reason for hope: 75% of the 120 units at Warehouse 11 that went back on the market earlier this year in Williamsburg are sold or under contract. The Dillon, a 83-unit Hell’s Kitchen condo from SDS Procida, which first suspended their plans and then lost funding, went back on the market 3 weeks ago. They have 11 contracts out for signatures already.

Some experts are worried that the current trickle of shadow inventory coming onto the market will turn into a flood though, possibly in the second half of this year. If the entire reservoir of shadow units, estimated at around 6,500 units in the first quarter, were put on the market it would increase the Manhattan condo supply by 70%. While sales numbers for the first quarter were up, median prices are still 11% below 2009 values.

Many Manhattan buildings in Manhattan, including 1 Rector Square, a 174-unit condo conversion in Battery Park City; 34 Leonard, a 16-unit TriBeCa co-op conversion; and 245 10th Ave., a new 22-unit development in Chelsea, and +Art, a 91-unit condo at 540 W. 28th St. in Chelsea are resuming sales this year.

Across the bridge an 87-unit Olive Park in Williamsburg that was renting for the past two years will go on the market for sale; sales at the 264-unit Be@Schermerhorn in downtown Brooklyn have also resumed.

If it remains a slow release, it could mean good things for Manhattan’s condo market and for prices, but if everyone tries to jump in at the same time, it could start to feel eerily like last year’s market.

Photo Credit: atomicshark

Milla Jovovich Lists 100 Greenwich Avenue Townhouse

In her Greenwich Village townhouse, Milla Jovovich is no Resident Evil, though she may not be a resident for much longer. She is listing her 100 Greenwich Avenue townhouse at $7.5 million for sale and $24,500/ month to rent. It’s had a recent price history as action-packed as her movies: after buying the townhouse for $6.375 million in 2005, she listed it at $8.75 million in 2008, and dropped the price to $7 million in the summer of 2009.

The townhouse is 3,098 square feet over four floors and a rooftop with four bedrooms and 3 1/2 bathrooms. With balconies and parlors throughout, there is plenty of elegance. The main floor is separated from the front doors by a petite parlour, and the large living room that makes up the rest of the floor hangs over the lower garden floor where the kitchen and dining room are. The floors are connected by an iron and mahogany staircase and the garden level’s floor is heated with radiant heat for the winter months.

The third floor is an elaborate dressing and bedroom complete with a wood burning fireplace, carved stone mantelpiece and a terrace. Two closets, one cedar lined and the other lined with mirrored french doors, augment the large dressing room. Two more bedrooms on the fourth floor overlook the rear garden with a final large bedroom at the front. There is even a kitchenette for late night snacking and a staircase to the roof terrace, complete with an outdoor shower. If you are looking for more info give me a call.

Image Credits: Curbed

The Legend of Rent Control

We all know someone who knows someone who has one of the legendary rent-controlled or rent-stabilized apartments. According to the State Division of Housing and Community Renewal, there are 40,000 rent-controlled and 848,000 rent-stabilized apartments in New York City. Famous examples include the apartments featured in Woody Allen movies and the place “Monica” from Friends lived in off of what she made as a chef.

The legendary rent-controlled apartment numbers are shrinking.

A survey of real estate agencies revealed that there are 80 and 90 year olds paying $58 – $102 per month in Little Italy, a woman on the Upper East Side paying $156.20 for two conjoined studios and a man on the Lower East Side paying $60 per month for a walk-up.

But as Robert Caplin of the New York Times points out, they aren’t always the deal they are made out to be. Many of those outside the prime neighborhoods get close to the same rent they would get on the open market. And even those who have them don’t always have much under control but the rent.

Stabilized apartments go up 3% per year, and rent-controlled apartments can only raise rent if the landlord takes the time to go through the long state application process- even then they can only go up if there are no building code violations. For many landlords, neither the application process or making the repairs is financially worth it.

One 65 year old man pays $288 a month for a 218 East 84th Street studio. The other apartments in his building, which recently sold to a developer for $3.3 million, go for $1,850 to $1,975 a month. Because landlords have been unwilling to make the repairs, Mr. Burke has spent $13,500 to repair it himself and $11,000 on legal fees taking his landlords to court over the conditions.

The number of controlled and stabilized apartments will continue to shrink, whether through the passage of time or the invasion of gentrification and development. But even if you are one of those paying $1,975 for a studio, it may be worth it to have a place that isn’t moldy or falling apart.

Photo Credit: caruba

30 Year Mortgage Rates at 4.84%

This week U.S. 30-year mortgage rates fell to their lowest level since December, 2009, approaching record lows. Hopefully this will keep the interest of the buying public high as we near Mamorial day and a traditionally slower sales season in NYC.  According to Freddie Mac, shorter-term home loans are also at a new all-time low.

According to Reuters, here is the comparison for the 30 year rate averages:

May 20, 2010: 4.84%

Dec. 10, 2009: 4.81%

This week’s rate is down from 4.93%.

The lowest ever on record is the week ending December 3, 1971, when the rate was 4.71%.

The traditional peg for setting long-term mortgage rates, Treasury 10-year notes, are at their lowest levels since December of 2009. There are several factors lowering the mortgage rate, including a rush to Treasury notes because of the weakening euro and the ripple effect following the end of the Federal Reserve’s mortgage bond purchase program on March 31, and the end of federal homebuyer tax credits on April 30.

15-year fixed mortgages averaged 4.24%, down from 4.30% last week and the lowest since August 1991, when Freddie Mac began tracking them.

Photo Credit: jsdart

Uma Thurman Lists Townhouse for $14.2 Million

Uma Thurman is putting her 18 West 9th Street townhouse on the market for $14.2 million. Boasting 5,086 square feet, this 5 storie, 25 feet wide, 7 bedrooms and 6 1/2 bathrooms is as hot as its owner.

The pre-war townhouse has a large, elegant parlor with an oversized bay window. 6 fireplaces, gardens and a rooftop terrace.The garden level has its own entrance to a guest apartment, and the garden offers direct stairs access to the dining room. This is the kind of place you want to do your entertaining this summer.

Photo Credit: Realestalker

Did Your Doorman Google You?

Did they just Google you?

Doormen see a lot of clues going in and out of the lobby, but how curious do they get and how much further will they go to find out about the tenants in the buildings where they work? BrickUnderground opened a door to the reality that some doormen just may be Googling the people in their building. Here is the exchange they got from an interview with Rafat Ali, who founded and then sold ContentNext Media in California before moving to New York 6 months ago:

“Ali walked into his Murray Hill building yesterday morning [and] stopped to alert the doorman that he was expecting some guests for a housewarming party.

“His first reaction was, ‘You can’t go on the roof,’” says Ali, who immediately bristled at the doorman’s tone. “I said, ‘Okay, but now that you said that I might.”

The doorman accused Ali of having an “attitude,” then, according to Ali, blurted out: “You think you’re better than us. I Googled you and because you sold your company for however many millions of dollars, you think you are a bigshot.”

In the ensuing exchange, the doorman apparently threatened to have Ali kicked out of the building.

“I said ‘I don’t want to deal with this, I have guests coming over,’” says Ali.

So what do you do if you founded a new media company and somebody Googles you? You release your shock and awe on Twitter. That’s what Ali did and that’s how BrickUnderground found him.

According to the story, Ali has now received a written apology from the doorman, but it may be too late for the doorman to salvage a reputation with Ali. And as one person pointed out on twitter:

“Suppose it would be useless to point out that ’sold company’ = ‘better holiday tip’?”

Photo Credit: garryknight

Credit is Hard to Find for Self-Employed and Small Business Owners

Small business owners are having a hard time getting stated income loans.

Stated income loans have nearly disappeared from the credit market after catching the “liar’s loan” nickname and taking the blame for many mortgage defaults. Self-employed workers and small business owners, two groups who traditionally use that kind of loan, are being hit hard by the constriction. Where credit histories and earnings estimates used to be a way to get around W-2’s or other documentation, now the best option can be to submit 2 years of tax returns and cross your fingers.

With a lot of cash, credit scores of 700+, and two years of running a profit, loans are still available. But even when a stated income loan can be found, the interest rates are 0.25% higher than conventional loans and down payments are often over 30%.

And sometimes adapting to tax challenges can hurt loan possibilities- Many are running into problems by taking larger business deductions to lower their tax liabilities. It means a lower official income level, and that means a lower chance of getting a loan. And the problem is exacerbated for people who have started their own businesses recently. For the thousands who were laid off by their companies and hired back as consultants or on contract it can be difficult to show long-term earnings for their business.

The New York Times quotes a guideline scenario from Debra Killian, president of Charter Oak Lending in Danbury, Connecticut:

“If a business owner shows too little net income to qualify, say, for a $300,000 mortgage at 5%, and instead qualifies for a 5.25% loan, the monthly payments add up to an extra $5,520, roughly, for the first 10 years of the more expensive loan.”

If you’re a small business owner looking at a loan in the next few years, it’s better to pay the taxes now and get a better percentage on your loan. From every angle, though, there is no denying that small business owners are getting the brunt of the credit crisis.

Photo Credit: SashiBellamkonda

Theatre for One Comes to Times Square

Seeing an innovative stage show is one of the great things about the City. Urban Daddy takes a peep into a creative kind of alternative peep show called Theatre for One that is definitely off-Broadway.

Theatre for One is a performance art project conceived by Christine Jones. She created a large black box at 46th and Broadway that admits one audience viewer at a time. The audience of one then sees a performance intended just for him/her. The performer could be an actress with a monologue, a comic doing a routine, or a magician performing tricks. Whatever the performance, part of the experience is the intimacy and eye contact you won’t get when these acts are performed on a stage for a typical audience.

Photo Credit: Theatre for One

MyClean.com Keeps You Clean

Like Neil Young sang, a man needs a maid. But when you need to find someone good, does it work to rely on the recommendations of friends? Not always, and even then there are always scheduling issues. What about the times you need some work on your apartment fast and on your schedule?

A new website called MyClean is polishing up the idea of finding good help to make your apartment looks its best.

MyClean has a staff of cleaners who will come to clean your space with a single click. And there are insured and bonded field managers who spot check their work.

For now they only offer service in Manhattan, and to get an estimate they ask for your zip code, number of bedrooms and bathrooms and square footage. With that they give you a price and time estimate.

From there you choose a base or heavy clean, schedule your desired time and add any additional information. If you are familiar with the service you can choose from their dropdown menu of available cleaners. They provide cleaning supplies if you need them and can even bring an eco-friendly set.

Not bad for when you need some sweeping change in your life.

Photo Credit: one-11

Central Park West’s $8 Million Dollar Ugliness

A 15 Central Park West condo has gone on the market, and while it’s For Sale By Owner (FSBO), it’s still selling for over $4,000 per square foot. And in this case it’s not what’s on the inside that counts- it’s all form, no substance. Curbed calls it the ugliest apartment in the building, and unless you like purple more than anyone this side of Medieval royalty, you may just forget about the price and start thinking about how to redecorate.

#2D, currently owned by Amy Kit Ming Mak, is listed at $8.5 million, almost double the $4.327 she paid for it. The apartment is 2,200 square feet with 2 bedrooms and 2.5 bathrooms, and is located at the back of the second floor, so no luck on the Central Park view. The best thing about the interior design may be that whatever the next buyer does will look stunning and, doubtlessly, modern.

Photo Credits: NY Curbed

Rainy Day Rooftop Spot, The Glass Bar at Hotel Indigo

Rooftop bars are high on everyone’s list- you get amazing views of the City, the pleasure of drinking in the open air and the added plus of everyone looking like a movie star when the breeze ruffles dresses and hair alike. But you can’t enjoy any of those things when it’s raining, right? Wrong.

The new Glass Bar at Hotel Indigo in Chelsea at 127 W. 28^th Street between Sixth and Seventh Avenue has added one more layer of enjoyment to the rooftop bar- a roof. The Glass Bar is a glass-enclosed rooftop bar that let’s you enjoy the views of a rooftop bar with the comfort of walls. On a sunny day the bar is open-air on all sides, and on a rainy day they let down transparent and waterproof coverings, allowing you to sip your favorite cocktail in the eye of the storm.

Photo Credits: Urban Daddy

Will Tamarkin Anderson Bring Hope to 1 Madison Park?

The next chapter in the saga that is One Madison Park may be dipping its pen into new ink. While its history up to now reads like a CSI rap sheet, with backouts, foreclosure and forgery just a few of the choice dramatic twists, court appointed receiver Jonathan Newman is dealing with the legal issues I wrote about at 1 Madison Park continue. Construction continues.

Newman has requested approval to hire Tamarkin Anderson as consultants to help bring closure to Phase 1 of the project, and to move forward with Phases 2 and 3. According to the Observer, the new consultants would oversee the construction and certificate of occupancy for the tower that already exists. Phase 2 would see the construction of two amenities floors, and Phase 3 would decide the future of what was originally going to be Rem Koolhaas’s tower.

Photo Credit: Observer

Inspectors Say La Esquina Está No Bueno

Stop by La Esquina in Little Italy for tacos and you have a good chance of standing in line with Beyoncé, Kate Hudson and George Clooney- but not this week. New York Inspectors shut it down temporarily, claiming the stairway to their basement dining room could be “imminently perilous to life” in an emergency.

According to the mayor’s Office of Special Enforcement, the stairway does not provide proper egress for customers or employees, and to top it off, the wood ceilings are flammable. But owners Derek and Serge Becker told the NY Post that there was no issue when they opened in 2005 or when they renovated in 2006.

“They wrote a series of violations all citing the new 2008 building code, even though our building has always fallen under the older code. This is going to take days to resolve, at the very least, and we are losing revenue, and paying our staff, which has been with us for years.” — Derek Sanders

The city counters by saying the year of the building code doesn’t matter “when the only egress is through another operating establishment.” No one is clear on why they were allowed to open in the first place. Attention may have been mounting after 311 complaints about how the smoke was vented from the restaurant came from a single neighbor, Georgette Fleischer, though none of her complaints mentioned the egress.

Photo Credit: N.Y.Post/Chad Rachman

1 Morton Square from the 2 Olsen Twins for the 3rd Time!

1 Morton Square Penthouse

The Olsen Twins are putting their 1 Morton Square penthouse on the market for the third time since 2005. This time they are listing the Far West Village property at $8.45 million, less than the $11.995 in 2007 and the $9.45 in 2005.

The unit is full of “Wow.” According to Stribling, the penthouse has 12 rooms in almost 6,000 square feet with 53 large picture windows offering amazing views of the Hudson and Manhattan. A private elevator landing with double doors that opens to 55 feet of entertainment rooms with a wood-burning fireplace. A 22 x 18 foot eat-in kitchen. A master suite with views of the Statue of Liberty and a large private dressing room/home office with over-sized walk-in closet. A family room/library with an ensuite full bathroom. Powder room, four full marble baths, laundry room with second kitchen, California closets, CAT 5 wiring and built-in speakers.

Photo Credits: Curbed

Top 10 Upper West Side ‘Picks-for your-Picnic’

It’s the moment we’ve been waiting for. Time to shed those winter parkas and grab your flip flops, the picnic season is back again.

It takes serious planning for a perfect picnic in the park and The Hoch Group wants you prepared. Best brunch places? That’s so…February. Here are the top 10 Upper West Side ‘Picks-for your-Picnic’ no matter what park entrance you are going in on. Sorry East Siders, that list is still to come.

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Top 10 Upper West Side ‘Picks-for your-Picnic’

Whole Foods – Time Warner Center at Columbus Circle (also the new 97th/Columbus location if you’re uptown!)

This one is a given…prepared food is perfect for throwing in you enviro-sack.  Also, location is perfect right at the South West tip of the park. Salads, sandwiches, brown rice sushi.  You can’t go wrong here.

Lansky’s – 235 Columbus Avenue (between 70 & 71 St.)

This Jewish style deli offers a Central Park Picnic basket special with two overstuffed sandwiches, two sodas, 2 fruit pies or cookies. And if you’re really a lazy, they deliver to Central Park free!

Shake Shack –  366 Columbus Ave (77^th St)

Does much really need to be said here? Just the best damn fast food burger and shakes on this coast.

Zabars – 2245 Broadway (80^th and 81^st)

Packed chicken caesar salads and containers of fresh watermelon, Zabars is not only the oldest, most reputable gourmet market, it’s one of the best.

E.J’s Diner – 447 Amsterdam Ave, (Btwn 81st & 82nd St)

Their sandwiches are delicious and their salads are huge. Our picks:  The Cobb Salad and Granny Smith’s Chopped Chicken Salad.

Blossom – 466 Columbus (82nd&83rd)

The perfect choice for all you veggies/vegans/raw foodies. Our picks: The Philly Cheese Sandwich made with pan seared seitan and The Blossom Burrito. They also make great smoothies perfect for sipping in the park. Take out is easy at the front bar of the restaurant.

Hampton Chutney – 464 Amsterdam Avenue (82^nd and 83^rd)

Dosas, Uttapas, mango chutney, and chai tea…a refreshing and portable twist to Indian cuisine. If you don’t know what a Dosas or Uttapas are, just think a paper thin crusty super light bread folded over and stuffed with whatever you like. How can you go wrong with that!

Artie’s Diner – 2290 Broadway (83^rd street)

Pastrami on Rye, huge salads perfect for sharing, not to mention sides of potato salad and cole slaw. This place is perfect for the classic picnic. Call ahead of time for prompt picnic pick up.

Popover Café – 551 Amsterdam Avenue (87^th street)

This restaurants menu has something for whatever mood you’re in. Pack a few of their famous ‘popovers’ with apple butter or strawberry preserves and you’re in business. I’m into the Granny. That’s turkey breast, granny smith apple, turkey, bacon, melted cheddar, red onion, watercress, raisin-horseradish dressing with a side of pasta salad. Gotta love it!

The Bagel Basket – 618 Amsterdam Avenue (90^th street)

This small family owned bagel shop is home of NY’s Original Rainbow Bagel and Flagel (a flat and crunchy version of the classic bagel).

*** Bring on the BOOZE!  My favorite wine store, West Side Wine on 83rd and Columbus is close to the park entrance and carries the new hip version of boxed wine.  Yellow and Blue’s certified organic wines are in environmentally friendly packaging, and they are actually good!  Try their Sauvignon Blanc…and don’t forget the cooler!

Photo Credits: crowbert & jonbell has no h

Co-op Sales Manipulated to Appease Boards

1 in 10 co-op sales is manipulated to maintain property values.

The post-Lehman real estate market is giving rise to new and previously rare selling practices. Brick Underground pulled the curtain back on how some co-op sales are recorded at misleadingly high prices to keep boards happy and maintain property values, using “givebacks” to buyers to keep real prices low. It’s estimated that 1 in 10 co-op sales contain some kind of “giveback” that keeps the official sale price tens of thousands of dollars higher than the buyer is actually paying.

Here’s the deal:

1. The sales contract price is acceptable to the board, but is more than the buyer will pay.
2. The seller then agrees to refund tens of thousands of dollars to the buyer after closing (typically with full disclosure to the mortgage bank and the board).  The giveback can go by many names, such as concessions, credits or “decorator’s allowances.”
3. In a bank-financed transaction, the refund amount is capped at 6%. In an all cash exchange it could be multiples of that.
4. The contract price “before givebacks” is then recorded by the city as the amount of the sale.

The practice is legal as long as both the board and the lender know about the agreement, and according to real estate lawyer Jeffrey Reich: “If handled correctly, credits and allowances provide a win-win alternative for the seller, purchaser, board and shareholders, whose apartment values are protected.”

While legal, banks don’t like the practice because it doesn’t reflect the true economic value of the sale. Jerry Feeny, a Manhattan real estate lawyer cautions: “If it exceeds 6 percent of the purchase price, [banks] will reject it, and they are often reducing valuations on the property according to the amount of the seller’s concession.”

One “giveback” technique that banks are happier with is “renovation escrows.” Feeny explains that, “Banks look at it as a seller’s obligation to make repairs secured by an escrow rather than a credit that goes back into the buyer’s pocket.”

Problems could come when future buyers and appraisers look for comparables to determine how much a property is worth and see the inflated sale price as the true cost of the property.

While brokers say exaggerating 10% of the sales won’t alter the overall resale market significantly, because the practice is much more common in new construction since 2007 it is skewing the market for new construction. Developers are aggressive in “giveback” concessions, from closing costs and common charges to decorating allowances and health club memberships.

According to Feeney, “sales prices are wildly overstated in new construction. You can’t tell just from the reported price what it really sold for.”

Photo Credit: rutio

Manhattan Property in Spring Bloom

Spring sales are blooming in Manhattan.

Spring has traditionally been the busiest selling season for Manhattan, and this season the market is living up to its reputation for the first time in years. While last year’s sales numbers were the worst in over a decade and expensive condos sometimes went months without any sales or for big discounts when they did sell, units in all price ranges are showing strong sales for 2010. This year’s turnaround may have a lot to do with a change in perception, with the height of the recession in the past and both Wall Street bonuses and stock prices making their comebacks.

“Everybody feels richer, or at least less poor,” says Dolly Lenz, a top-selling broker at Prudential-Douglas Elliman.

The first signs of a recovery came at the end of 2009. First, discounted apartments eligible for federally-insured mortgages started to sell, and then there was a rush at the end of the year for apartments under $2 million with major price cuts. This spring, the recovery is starting for apartments over $2 million. According to Hall F. Willkie, president of Brown Harris Stevens, 40% of all sales so far this year are for apartments over $2 million, compared to just 18% last year. Willkie also says that contract signings are up 43% this spring over spring of 2008.

“Buyers have come out of the woodwork and they are trying to act on their instincts that this is the time to buy,” says Pam Leibman, president of Corcoran Group.

With the market in bloom for the first time in years, condominium projects are hosting parties for brokers and giving away prizes from iPods to golf lessons. Even if you’re not a broker, that’s good news.

But even with sales numbers up, prices are still lagging behind and buyers are being cautious not to overpay. Last week S&P/Case-Shiller reported that New York metropolitan area home prices were down 0.4% in February from January, and down 4.1% from February of 2009. The recovery has been spotty: some apartments linger, especially when sellers refuse to cut high prices, other properties are attracting multiple offers. How the year finishes will have a lot to do with whether interest rates rise and if more sellers put their properties up for sale, both of which could slow the market again.

Photo Credit: midweekpost

Buyers Start Your Engines… Let The Rate Lock Race Begin

Buying a home has always been stressful. You search, sign a contract, put a deposit down and hope for the best. But now, since the Great Recession, it’s a race against the clock to close in 60 days. If you don’t, your bank is going to charge you hundreds of dollars in fees. Consumers make an agreement with their bank commonly known as a “rate lock” to secure their interest rates at a specific level. This enables you to lock in your interest rate so you know what your rate will be when it’s time to close. “Interest rate lock in agreements between lenders and borrowers are typically 60 days,” says Rob Fetten of DE Capital Mortgage.

The loan is then sold and included in a pool of loans the day it’s locked with government-propped agencies Fannie Mae and Freddie Mac. According to Lenny Holler, also at DE Capital Mortgage, if you don’t close in those 60 days, you pay to extend your rate, approximately .125% per week at Wells Fargo. That’s $625 per week  for a $500,000 loan and at some banks it can be more. One little detail to keep in mind: it takes at least 90 days to close on a coop.

Just to recap, your bank knows that it will take you 90 days to close, only gives you a rate lock of 60 days, and then charges you hundreds of dollars a week for the interim. God bless America. “Ironically,” says Mr. Fetten, ”the delayed closing is the result of the government’s new regulation imposed because of the sub prime collapse,” and what some call excessive documentation and verification practices. More ironically, the charges for extending the rate lock are actually coming from Fannie Mae and Freddie Mac, not your local bank. So in essence, who’s getting the money when your rate lock expires? You guessed it, the government.

Photo Credit: yomanimus

Your bank knows it will take you more than 60 days to close and charges you hundreds of dollars in the interim.

Congress oversees the government agencies Fannie Mae and Freddie Mac. These entities are both bankrupt and living off tax payers money. So actually the consumer is losing  three times. Once for their tax dollar being utilized to bail out the agencies, once for the delayed processing and regulatory red tape to get the loan, and a third time to pay for the rate lock extension that Fannie and Freddie charge.

As a broker I think to myself, what are the angles so I can help my clients? There are no good angles. If you don’t pay to extend your rate lock you will lose your loan.  If you lose your loan you either have to start the whole process over again or you can lose your deposit. You may wonder, why can’t I lock in my rate later?  Doing that is probably the best answer, except now you are watching the interest rates every day and watching your monthly payments rise above your means, then down again, waiting for the right moment to lock it in. That’s a stressful way to live. Even if you time it perfectly, what’s to say that the board won’t take longer than expected or the seller decide to stall on the move-out date?

The bottom line is, there are no good answers. Just stay informed, have the right people around you and hope for the best. This is the post Lehman era, you gotta love it.

3 Triggers for Hudson Yards

This week the MTA board approved a $1 billion deal with Stephen Ross’ Related Companies to develop the West Side/ Hudson rail yards. Before Related needs to close the deal or the MTA can begin collecting rent though, the market needs to hit three benchmarks.

The Hudson Yards Triggers

1. Midtown office space availability rates hit 11% according to brokerage CB Richard Ellis.
* As of March 11, 2010, availability is at 14.8%. Midtown did average below 11% from 2005-2007.

2. Manhattan co-op and condo sales price achieve an average $1,200/ square foot for a “sustained period.”
*2009 fourth quarter average price was $1,051. During the last cycle the rate has been above $1,200 for three different quarters, including the $1,322 peak in 2008’s second quarter.

3. The architectural billings index must pass 50 for the commercial sector.
*The current rate is just below 45. The last time it was over 50 was in early 2008.

After rezoning in 2005-06 by the City Council, half of the 26-acres is available for apartments, cultural space and a new public school, and the other half is open to offices, a hotel, retail space and public open areas. Related has said they want a large office, retail and hotel tenant committed before they begin building a platform over the two sections of rail yards. Estimates predict that the platform itself could cost up to $1 billion.

The deal raises questions about whether Manhattan’s big tenants will again be willing to move that far from Midtown, especially with government-backed new office space in Lower Manhattan. Both sides could still pull out of the deal- MTA can call in the deal and leave Related with 90 days to close and start rent payments or the deal is off. At the same time, Related could choose not to close, leaving MTA at the station without a train.

Image Credit: Observer

Celebrity Real Estate: Back on the Market at Double the Price

Celebrity Manhattan Real Estate

A pair of celebrity real estate properties are back on the market, and both have undergone major renovations- and major price changes.

173 Perry Street

Financier Gilbert Lamphere has put his #PH-N duplex on the market for $15.9 million. According to Curbed, it is listed as “architect ready” penthouse. It turns out that he purchased the duplex from Martha Stewart for $6.65 million in 2004. Since then he has tried to sell it as a triplex in combination with his #13N unit, first for $25 million, then $21.5 million. When neither price found a buyer he pulled the listing.

The Dakota

Filmmaker Albert Maysles’ former apartment at the Dakota sold in 2005 for just over $3 million, and it, too, is back on the market. Maysles left the building during the creative class exodus and selling to what Curbed calls “your average rich guy.” Now, that average rich guy is trying to more than double his money, listing the apartment at $7.65 million, more than double the purchase price after putting the property through a massive renovation. The building’s co-op board turned down Melanie Griffith and Antonio Banderas last time it was on the market- will they be ready to admit the famously rich alongside the “average rich guy” this time?

Photo Credits: CurbedNY

FUN FACTS – Why Central Park Was Almost Not Central

Here is a fun fact for you, Central Park was not part of the original Commissioner’s Plan of 1811 for the orderly development of land around Manhattan, and if public opinion or administrative decision-making had been slightly different, New York’s largest park may have been on the Upper East Side. By the 1840’s there was a rising call for a great public park by influential New Yorkers like William Cullen Bryant, editor of the Evening Post (now the New York Post). A site called Jones’ Wood on what is now the Lenox Hill and Yorkville neighborhoods, pictured below, was a strong candidate by 1851.

At that time Jones’ Wood, a 150 acre wooded area, was used as an amusement area with beer gardens and dancing for working-class New Yorkers. While City authorities thought it would be an ideal site for a large park, more forward-thinking city planners thought it better to make the park more central to allow for the City’s future northward growth.

Both Jones’ Wood and what is now Central Park were approved for development in 1853, but only Central Park was developed. Jones’ Wood was parceled into residential and commercial areas, and some of the land was destroyed in an 1894 fire. Central Park was completed in 1859.

Images and Source Credit: Ephemeral New York

Weekly Economic Report

The week’s economic news was stronger than expected though not without some remaining clouds. Leading indicators and home sales improved, but durable-goods orders fell. Meanwhile, Greece’s government formally requested international financial support to help forestall possible loan defaults.  Sales of new homes soared 26.9% in March, to an annual rate of 411,000. The increase, the first since last October, was well above expectations. Sales rose in all regions of the United States, led by the South with a gain of more than 40%. Compared with year-ago levels, sales were up 23.8%, again with gains in all regions. The March median new-home sales price of $214,000 dipped from February. Existing-home sales also beat expectations, rising by 6.8% to an annual rate of 5.35 million homes. After three months of falling sales, the increase was welcome news, but the pace of March sales was still well below the recent high of 6.49 million homes. Federal homebuyer tax credits have encouraged a pickup in home sales activity, and made it more challenging to forecast future sales after the tax credits expire on April 30. (Prospective buyers must enter into a binding contract by April 30, and must close on the home by June 30.)  On the inflation front, after falling in February, wholesale prices resumed their climb in March with a 0.7% increase in the producer price index (PPI) for finished goods. Most of the increase came from food prices, whose 2.4% jump was the largest since 1984. The surge was the result of unusually cold weather in growing regions over the past winter, which led to an increase in vegetable prices of nearly 50%. Excluding food and energy prices, the core PPI rose only 0.1% in March.

In news that could end up being important for the mortgage market, Friday morning, CNBC reported that support is growing among Fed officials to begin sales of mortgage-backed securities (MBS) from the Fed’s portfolio. In a program which ended March 31, the Fed purchased $1.25 trillion of MBS to help lower mortgage rates and boost the economy. According to CNBC, “at least” six members of the Fed’s policymaking committee support near-term MBS sales if the economy continues to improve. The selling could begin as soon as the third or fourth quarter of this year. Fed Chief Bernanke still views the likely time frame to begin MBS sales as next year, but his recent comments have indicated a willingness to keep more options open. With the next Fed meeting taking place on Wednesday, the 2:15 et release of its statement will take on added significance. If the Fed actually conveys an intention to begin to sell MBS soon, mortgage rates would be likely to rise on the news.

New Charges in the One Madison Park Case

The drama at One Madison Park continued this week. Jonathan Newman, a veteran real estate attorney, has been named interim receiver of One Madison Park while lawsuits between iStar Financial and lead developer Ira Shapiro play out in court. For those of you who don’t know, one Madison Park is the tall skinny glass building on East 23rd that has the amazing views down Madison Avenue for miles. It’s the kind of property that seems as if it should have been a developers dream but it has turned into a development nightmare. Shapiro faces charges of forgery by development partner Marc Jacobs, claims from lenders that $30 million in loan proceeds are unaccounted for, and a foreclosure lawsuit from iStar Financial.

In what is seen as a minor victory, presiding Judge James Yates is allowing Shapiro to continue selling units until legal issues are sorted out. According to Shapiro’s lawyer, “It’s an extremely limited receivership order and the borrower is going to be able to stay in control of sales. This job is going to sell and Ira’s going to remain involved.”

One issue is how extensive Newman’s authority will be. He will have the right to collect sales proceeds and common charges, inspect all financial records, retain a managing agent and hire a consultant for the remaining construction on the project.

The reason sales are being allowed to continue is that Shapiro’s lawyers allege that iStar submitted forged mortgage documents to the New York City Department of Finance- a charge iStar’s lawyers deny.

The Rockland County district attorney is also investigating claims by Jacobs that Shapiro forged Jacobs and his wife’s signatures on loan documents.

Photo Credit: The Real Deal

247 Central Park West Listed at $32 Million

247 Central Park West: $32 Million

Keith Monda, former Coach co-president and chief operating officer, has put his five-bedroom townhouse at 247 Central Park West back on the market for $32 million. If it sells, it will once again break its own record as the highest-priced single-family townhouse sale on the Upper West Side. Abigail Disney, Walt Disney’s grandniece, sold it for $15.5 million in 2006 and last month the title sold for $19.3 million 26 West 76th Street.

History

247 Central Park West boasts two offices, two outdoor spaces, its own elevator, an indoor 60 foot lap pool, a domed entry parlor skylight and a roof terrace with views of Central Park. It was designed by Edward Angell and constructed by William Noble in 1887- it is one of only a few single-family homes on Central Park West still remaining. Had it not been for architect W. Gedney Beatty’s refusal to sell in the ‘20s, the building would have been demolished and replaced with an apartment building.

According to Mara Flash Blum of Sotheby’s International Realty, the new asking price reflects renovations, which include a new media room and gym. If you have any interest in this property give me a call and may god forever bless you.

Source: The Real Deal

Can A Park Revitalize Governors Island?

Sometimes to move forward you have to look back. In this case, the City is looking at ways to invigorate Governors Island that New York Magazine is calling “radically old-fashioned.” That radical idea? Build a park.

Right now the Governors Island shoreline that faces lower Manhattan is lined with Park Service-run fortifications, landmarks and old military buildings. Those can be polished but not given a completely new identity. Dutch architectural firm West 8 created a mock-up for the park proposed for the other part of Governors Island. It’s a return to the philosophy that brought the City Central Park and Prospect Park- the idea that large areas of nature within huge urban areas is a civic responsibility and that the public good was and is worth investing in.

The project starts with the park rather than considering it an add-on to a large real estate project. The plans would create 87 acres of public space, including ball fields, hills and dales, and great views of the Statue of Liberty. At this point Leslie Koch, president of the agency that administers the island, uses a small budget to quietly promote activities like hammocks and free bicycles to New Yorkers looking to get away. It may be just the kind of radically old-fashioned idea to grow the Island’s presence in the future.

Governors Island in the '30s

Color Photo Credit: NY Mag | B & W Photo Credit: army.arch

The Sickest Roof Deck in NYC: The Ink48 Press Lounge

Check this roof deck out!  The Press Lounge at the Ink48 Hotel in Hell’s Kitchen is 3,000 square feet of amazing, the kind of view that goes for miles, and it opens today, April 16.

Press Lounge at Ink48 Hotel - 653 11th Ave. {at 48th St}

Love this picture? Watch the slideshow for more.

Instead of a nightclub, the Press Lounge is ideal for an after-work or after-dinner drink where you actually have time and noise-levels that let you enjoy the sunset, the 360 degree views, a conversation, or just a few moments taking in Manhattan at night. You’ll share the space with couches and plants. Coming this summer is a garden to serve the restaurant and a table specifically for farm dinners.

Pretty cool hu…”

The Hamptons and North Fork, a ten year market report

The Hamptons and North Fork housing markets continue to hold their own, seeing the same trends as New York City. Though they have stabilized, just as Manhattan, the markets are seeing a year over year decline in prices. The median sales price in 2009 fell 10% to $675,000 from 2008 but more than doubled over the past decade and the market saw a surge of activity at the end of 2009. Here is a snapshot of the 10 year numbers for the Hamptons and North Fork. For the full report you can visit the Market Report Directory at Prudential Elliman.

Manhattan Real Estate: The Sweet Spot and January Sales

Brokers are all taking calls again. The discounts out there are working- not enough to raise prices, but enough to generate sales. Some of it is the bonuses and some of it is just the ripple effect of people thinking they need to buy before the people with bonuses do. Some of it is a returning sense of confidence. Some of it is that people think the market may have hit a pricing bottom and they don’t want to miss out on the best pricing.

Market Activity Between Dec. 15 and Jan. 15: Bonus Effect

Image from New York Magazine

New York Magazine quotes some telling Streeteasy numbers:

• 122 Manhattan properties priced between $1.5 million and $5 million went into contract between December 15 and January 15.
• That is up 171% from the same period a year ago.
• Properties between $2 and $3 million account for more than 1/3 of those contracts- the sweet spot.

Sales up year over year in January? That’s a welcome shift. There isn’t enough activity to make prices go up across the board, though, reinforcing the importance of pricing in a down market.

Manhattan Real Estate: Adapting to Change Reflected in Increased Sales

Manhattan Real Estate 4Q 2009

2009 was a new era in New York Real Estate and buyers, sellers and real estate professionals have slowly adapted to the changes.  We have seen the adoption of stringent, if not irrational mortgage underwriting to combat the irrationally lenient mortgage underwriting of the years before. We have seen layoffs, elevated unemployment, lower compensation, sharp real estate price corrections and a shadow inventory of new developments. We have discovered first-time home buyers’ tax credits, rising foreclosures, expanding marketing times and a host of other challenges. Welcome to the 4^th quarter of 2009 market report.

While the increased level of sales in the fourth quarter of 2009 was encouraging, longer marketing times and larger discounts shed the harsh light of reality on those encouraging statistics. What that suggests is there is a buying public signing contracts but sellers have to concede on price to reach those buyers otherwise their apartments will sit on average 204 days. A true sustainable housing recovery is still hurtles away and will be marked by a meaningful decline in unemployment and greater consumer access to credit. With that said the below report is a marked improvement from a year earlier.

4Q Market Report Highlights

• The number of sales increased over the prior year quarter as inventory fell. There were 2,473 sales in the current quarter, up 8.4% from the 2,282 sales in the prior year quarter and up 10.9% from the prior quarter.
• The median sales price of a Manhattan apartment was $810,000 in the fourth quarter, 10% below $900,000 in the prior year quarter and 4.7% below the $850,000 in the prior quarter.
• Average sales price fell to 12.7% to $1,296,156 from the prior year quarter and down 2.1% from $1,323,462 in the prior quarter.
• Price per square foot was $1,051 in the fourth quarter, down 11.2% from the prior year quarter result of $1,183 but up 5.5% from the prior quarter result of $996.
• The average days on market was 204 days in the fourth quarter, up 28.3% from the prior year quarter average of 159 days and jumped 22% from 167 days in the prior quarter. Since this metric is based on closed sales, it includes properties that entered the market in the first half of 2009 that languished until the number of sales surged in the third quarter.
• The return to more normal historical levels of sales activity was reflected in the decline in inventory levels. There were 6,851 active listings at the end of the quarter, a 24.6% decline from 9,081 listings in the same period a year ago, but down 18.3% from 8,389 listings in the prior quarter.
• Listing discount—the spread between the list price at the time of contract and the contract price—increased to 12.8% in the fourth quarter from 7.3% in the prior year quarter and from 7.6% in the prior quarter.

Manhattan Co-Op Market

• The median sales prices of a Manhattan coop was $630,000, down 8.4% from the prior year quarter median sales price of $688,000 and 2.9% below the prior quarter median sales prices of $649,000.
• The average sales price was $1,005,744, down 13.4% from the prior year quarter average sales prices of $161,302 and 5.9% below the $1,068,726 seen in the prior quarter
• Price per a square foot was $866, down 5.6% from $917 per square foot in the prior quarter.

Manhattan Condo Market

• The median sales price of a Manhattan co-op was $630,000, down 6.7% from the prior year quarter result of $675,000 and unchanged from the prior quarter.
• The average sales price was $975,049 in the fourth quarter, down 19.6% from the prior year quarter, down 19.6% from the prior year quarter average sales prices of $1,213,382 and down 3.1% from $1,005,744 in the prior quarter.
• Price per a square foot was $921, down 13% from $1,059 in the prior year quarter, but up 6.4% from $866 in the prior quarter.

Manhattan Luxury Market

• The median sales price was $3,780,000 in the fourth quarter, 8.5% below the prior year quarter result of $4,132,516 and 3.2% below $3,905,000 in the prior quarter.
• The average sales prices was $4,863,673 in the current quarter, down 12.5% from the prior year quarter average sales prices of $5,559,502 and essentially unchanged from the $4,881,561 average sales price of the prior quarter.

Manhattan Real Estate: One Beacon Court Apartment and Anna Wintour’s Preservationist Concerns

One Beacon Court

Manhattan celebrity real estate is in a constant state of change. In 2007, Johnny Damon sold his three bedroom at One Beacon Court, the one with the amazing Manhattan skyline and Central Park view, for $8 million, having bought it for just over $5.5 million. Curbed wrote this week that the 2,100-square-foot apartment is back on the market with an asking price of $8.9 million. Looks like we have some sellers doing some wishful thinking.

Photo Credit: Curbed

A look at the new stripes in One Beacon Court

Anna Wintour and 178 Bleecker Street

At the same time, Vogue editor Anna Wintour is raising preservationist concerns in Greenwich Village. According to Curbed, Wintour recently wrote a letter to the Landmarks Preservation Comission about the planned eight-story development at 178 Bleecker Street. The new development will include a jazz club/cabaret, an art gallery, and six apartments. Wintour’s letter described the development as “totally out-of-scale” and “inappropriate.” While some are applauding her preservationist approach, there is talk that her motivations are more self-interested. The proposed development could block the light for a private garden she and other nearby townhouses share. The Department of Buildings has expressed concerns to developer John Wu about the height of the building in the past, so it seems that questions and pressure are mounting.

Tishman Speyer Properties and BlackRock Realty Default on Stuyvesant Town and Peter Cooper Village

It’s one of those where you can’t look away. Stuyvesant Town and Peter Cooper Village were the biggest apartment complexes in Manhattan and they attracted the biggest money- their 2006 sale was for $5.4 billion and everybody wanted in.

But that was 2006. The most recent appraisal put the value of the two complexes at $1.9 billion. On January 8, Tishman Speyer Properties and BlackRock Realty defaulted on $4.4 billion in loans, walking away and handing over the keys. They aren’t the biggest losers, though- while they each stand to lose initial investments of $112 million, there is a laundry list of high profile investors who are being hung out to dry as the deal falls apart, according to yesterday’s New York Times article.

Photo Credit: dandeluca

Tishman Speyer and BlackRock have defaulted on Stuyvesant Town and Peter Cooper Village

Tishman Speyer Properties and BlackRock Realty

The plan was that Tishman Speyer and BlackRock would replace rent-regulated residents with new tenants who could pay higher market-rate rents. First, apartment tenants didn’t convert as quickly as planned, and then in 2008 rents began to drop all over New York. Their rental income did not cover the monthly debt service.

The Times says that Calpers and Calsters (two California pension funds) are losing hundreds of millions, the government of Singapore looks to lose a $575 million secondary loan and $200 million in equity, and the Church of England, SL Green of Manhattan, and Fortress Investment Groups are among other companies, banks, countries and pension funds who stand to lose large investments.

Analysts have been predicting these defaults since last year, and in the end Tishman and BlackRock defaulted on $3 billion in senior mortgages and $1.4 billion in secondary loans. Their problems don’t stop there, though- the highest New York State court ruled last fall that they had improperly deregulated and raised rent on 4,400 apartments. They had to roll back those rents, and the next owner(s) will inherit more than $200 million in rent rebates owed to tenants.

What now for Stuyvesant Town and Peter Cooper Village?

The fallout from this is already messy. Earlier this month several of the secondary lenders sent a letter threatening foreclosure because of the default, but may end up with nothing now that Tishman Speyer and BlackRock are walking away rather than moving into bankruptcy. It may fall to Fannie Mae and Freddie Mac to pick up the pieces. They recently acquired over $2 billion in securities backed in part by $3 billion in Stuyvesant Town mortgages. Fannie and Freddi Mac need to be paid first, but they are not parties to property negotiations.

One recent report from Deutsche Bank suggested that CWCapital will likely wipe out the existing mortgage and attempt to sell Stuyvesant Town and Peter Cooper Village. While the 1940’s Metropolitan Life buildings were built to keep rents low for returning WWII veterans and have long been a haven for the middle class, it is the investors who are stumbling away this time, shell-shocked with nowhere to lay their heads.

Manhattan Real Estate Amenities and Fees Are Rising

That movie screening room, roof deck and pet spa you thought were included in your rental or condo? Check twice, as Manhattan is seeing a new wave of fees and charges for amenities-all those wonderful things that were included just a few years ago are proving a little harder to pay for.

“These days, with the economy being what it is, everybody is trying to be a little creative at trying to generate additional revenue,” says John Janangelo, president of Bellmarc Realty’s property management division, in the Real Deal. That says a lot about where the Manhattan market is right now.

Photo Credit: joeywan

Many buildings are getting "creative" with amenity and other charges

Amenities and Rentals

Fees for amenities at rental buildings have always existed but are now being expanded to include some typically free features. While things like roof decks, pools, fitness centers, party spaces or playrooms were usually included just 5 years ago, many places are starting to charge fees out of necessity.

Some rental buildings appear to be in transition, offering amenities for free for a limited time and planning to start charging for them in the coming year.

The Real Deal notes that 808 Columbus in the Columbus Square complex has an 80,000-square-foot roof deck, saltwater pool, playroom and fitness center. It will begin with a small fee for residents that they plan to increase yearly. Truffles Tribeca has a gym, theater and the Trufflesprivé lounge. 454 Manhattan Avenue in Harlem includes a roof deck, bike storage and other amenities free for one year, rising to an annual fee of $175.

In a down market like this where people are staying sharp for the best deal they can find, raising or creating fees may be necessary when buildings need the money, but they can also make renting or selling a property even harder.

Amenities and Condos

It’s normally assumed that monthly common charges cover day-to-day expenses and include amenities- that is becoming less common as buildings find they can’t cover their operating costs. There are a myriad of reasons, none new but all more acute: units are going unoccupied, tenants are unable to pay, inexperienced developers inaccurately estimated costs, sloppy construction during the good times is up for repair. Josh Guberman of Core Development Group is quoted as saying, “What we’re seeing a lot of is new developments starting out years one or two at 20 to 50 percent above the [cost] projections.” Wow.

Condos without enough money need to raise amenity fees, raise common charges, or mimic the co-op “flip tax.” Any of these essentially raises the cost of living in the building and makes the apartments tougher to sell, so some condos are moving toward a transfer fee, usually somewhere between 1 and 2%.  Some are raising fees for storage units, move-in and move-out fees, or creating appliance fees- certainly the less enjoyable side of being creative.

What effect amenity fees and others will have on specific buildings remains to be seen, but it is certainly a new reality of the market.

Manhattan Real Estate: The Plaza Hotel Sees Dropping Unit Costs and Rising Hope

The down market is affecting prices across the board and even classic historical landmarks like the Plaza Hotel are not immune to dropping prices. They may even be feeling the recession more acutely than other properties, as their value rose after Isaac Tshuva’s $675 million purchase of the hotel and subsequent revitalizing of the property to the tune of $450 million more. After selling out all units sight-unseen, the resale values have been dropping drastically over the past two years. Rebecca McAlpin wrote a timely article for The New York Times about New York’s storied Plaza Hotel that digs into the dropping property values and reasons for hope.

Photo Credit: wallyg

Units are losing value but occupancy is up recently to above 90%

Manhattan Real Estate: Spotlight on the Plaza Hotel

In 2004, all 181 units sold sight unseen for a total of over $1.3 billion. If you remember, prices were high enough that firms were separating sales figures from the Plaza because they skewed the market. The idea was to create a luxury condo tower for the world’s wealthiest tenants with a collection of high-end stores and restaurants below them. The market has not played nice. The emblematic Palm Court Hotel has been closed since December of 2008 and the last 11 luxury condos have sold at a loss. Unit prices are dropping dramatically, and the article lists losses on recent sales from over $700,000 up to $8.5 million. And 9 of the 28 apartments in the Plaza currently on the market have drastically cut their asking prices.

Plaza executives see reasons for hope, though, noting that both unit costs and event bookings have followed general trends and 2010 is looking good. Occupancy rose to over 90% in December of 2009, indicating that people are  buying the units. The Plaza is predicting a 30% rise in wedding bookings for 2010 and they earned their first ever 5 Diamond rating from AAA.

In the end, the Plaza Hotel is a tale of what happens to a property that went big at the height of the real estate bubble.  High hopes and high prices dropping in a volatile market.

Will Eloise still be proud to be at the Plaza? Only time will tell that story.

Manhattan Real Estate: Pricing in a Down Market

Manhattan Real Estate: Pricing in a Down Market

Half of what makes a successful agent is the ability to price a home effectively. According to the 4th Quarter market report, the listing discount from the final asking price of a Manhattan apartment is 12.8%. Too many properties will pad their asking price- the secret is to use listings in contract to guide your pricing. From there a good negotiator will leverage the offers to get the price you deserve, even in a down market.

Conventional wisdom says that because buyers are submitting offers that a seller could construe as a low ball, the seller should pad the price- that way the buyer can feel victorious that they successfully negotiated and the seller knows they took home their number.

Photo Credit: Kevin Labianco

The way to have a spectacular sale is to take a leap of faith.

Pricing in a Down Market

But that’s not how it works. Conventional wisdom is just that- conventional, average. You can make a spectacular sale in a down market- it’s all about the nuance of pricing.

The life of an overpriced listing goes something like this:

It comes onto the market and you get some traffic. There have been people waiting on the sidelines for a unit just like yours. They see your ad in the NY Times and they get excited to stop by your open house. They let you know how nice your apartment is and then you never hear from them again.

Pad the price according to average advice and you’ll have an average sale. Your listing discount will be 12.8%, the average, and your time on the market will be 204 days, the average. You will clean your house for 29.14 open houses. If you’re doing the marketing right and showing your apartment privately twice a week, that’s 58.28 private showings, all because of conventional wisdom.

In NYC there are 6,851 currently active apartments and what that means is that you don’t create the value. The three apartments in your building and the ten on your block create a relative value. The buyer that stopped by your open house may have been telling the truth- he might have really thought your apartment was nice. Not 12.8% nicer than the guy down the block, though.

Slowly over the next several weeks, traffic slows down and then you have to do a price drop. A buyer stops in and sees how long your apartment has been on the market and sees you did a price drop and he smells blood. He puts in an offer but it’s low. Perhaps you take it, perhaps you reject it- but now you are chasing the market and having an average sale.

Spectacular Sale Pricing In a Down Market

The way to have a spectacular sale is to take a leap of faith.

Using listings that are in contract as a guide (remember, a listing in contract has had real buyers recently put their name on the dotted line) price your apartment, from day one, a hair under market. The other listings will look overpriced relative to yours and multiple offers will start to come in.

A good negotiator will know how to leverage those offers against each other, without producing buyer anxiety- a dangerous by-product of a bidding war in a down market that I explained in the New York Times. That pricing will move you from a hair under market to over market. With a good negotiator who understands the market, you net far more than using the conventional, average method that leads to only slow, grueling price drops of death.

Knowing the nuances of pricing in a down market, not just repeating the same, average mistakes of conventional wisdom, will create that spectacular sale and get you the price that you want and deserve.

New York City Rentals : Free Month Incentives and Lowering Base Rents

If you’ve been in the rental market anytime recently, you’ve noticed the talk of net effective rent and the growing prevalence of a free month or two (or three) at the beginning of a lease, and perhaps other incentives like gym memberships. It’s become the reality for hundreds of buildings around the City, with landlords looking to attract renters while trying to level off rent  decreases.

Photo Credit: RaSeLaSeD

Landlords are increasingly offering free months at the beginning of leases, prompting lenders to consider lowering base rent prices

New York City Rentals: Why Offer Free Months?

Landlords dont want to lower base rent numbers, but by offering 1, 2 or even 3 months of “free” rent at the front end of a lease and then amoritizing the savings over the life of the lease, they are effectively doing the same thing. In this market, that is seeming less like an incentive and more like a necessity for doing business.

For landlords, the hope is that tenants will stay on at the base rent price after the first year lease is up in order to stabilize income. With lowering base rents, often not an option because bank lenders have historically not allowed it, landlords are moving toward incentivizing leases and touting the net effective rent rates.

The Real Deal notes, however, that banks may be coming around and realizing that market-rate rent numbers are dropping and that it could be in everyone’s interest to allow landlords to lower base rent rates.

Kevin Ellerton, CEO of Blackstone Properties, explains the situation this way:

“What’s started happening very recently is that the landlords who were dropping rents through lease riders have finally begun decreasing base rents. I take that as a sign that banks are starting to wake up to market reality.”

Net effective rent numbers look great for marketing, but they are a long-term risk for landlords and can get renters into a property they can’t afford in later years.

Lowering Base Rents

Lenders working with landlords to lower base rent rates is the most stable long-term solution for everyone involved, as it keeps cost consistent with market rates and attracts renters who can commit to actual rent prices, rather than incentivized lease terms.

The flood of new incentives will get people into apartments, but it remains to be seen whether those tenants will stay a year from now when that lease is up. The trend by lenders to work with landlords to lower base rent prices, however, has a stronger long-term chance of locking in stable, long-term tenants. Another adjustment to the real estate market after a year of tumultuous change.

Celebrity Real Estate : Lenny Kravitz Soho Condo In Contract After Over 7 years

Photo Credit: OpenEye

The Legendary SoHo Condo Owned by Lenny Kravitz is Now In Contract

Lenny Kravitz Finds A Buyer For His Penthouse

Street Easy even calls it “the most luxurious and important property in Soho and in all of downtown Manhattan” after the new renovations and lists it as currently IN CONTRACT.
What Curbed calls Soho’s prettiest albatross Lenny Kravitz’s attempt to sell his duplex penthouse at Soho’s 30 Crosby Street stretches back to the early stages of the last decade, but it appears our long national nightmare may finally be over.

The duplex penthouse boasts 6,000-square-feet of refurbished space, turning it from “a funky bordello befitting a rock star to an airy and pristine loft befitting regular rich people,” according to Curbed. Changes include lightening the previously dark interior and an adventurous new bathtub.

While the sale is hardly a market indicator, it is encouraging to see a high-end, celebrity real estate legend find a buyer. Now how do I get a tour?

Manhattan Real Estate : Ken Friedman and Ace Hotel Speakeasy Jersey Joe’s

Ken Friedman is looking to turn a long-lost space in the nether regions of the Ace Hotel into his next buzz-worthy project- a speakeasy. BlackBook has a great feature article on Friedman’s plans where they talk with him about the new project. Friedman knows a thin or two about creating buzz-worthy spots: if you’ve been to his Locanda Verde spots in both Tribeca and at the Ace or The Breslin at 29th and Broadway, you know what I’m talking about.

Photo Credit: usonian

Ken Friedman is working on a new speakeasy project in the Ace Hotel at 29th and Broadway

Jersey Joe’s Speakeasy

Said to be looking at a spring or early summer opening, the new speakeasy is said to be pursuing a Tin Pan Alley theme after plans for a dive bar adjacent to the Ace were canceled. According to Friedman, the Ace told him to look around and figure out another place for his dive bar.

“And so I started poking around the hotel, and I discovered what looks like it must have been an old speakeasy or something. I didn’t know exactly what it was, but it was like a place where people used to gather once upon a time.” – Ken Friedman

The space, sounding well-hidden in the depths underneath the Ace Hotel proper, also has direct access from Broadway. Inside they describe “brick arches crest the walkways and industrial, exposed beams keep the whole thing standing.” Beyond that, it sounds like you will find all the corners and hidden spaces you could ever want at a speakeasy, complete with subway noise for underground ambiance.

Jersey Joe’s, as Friedman says the spot will likely be dubbed, gives nods to both James Breslin’s love of boxing and the legendary longest boxing match in history that supposedly took place in the space. Friedman explains:

“[Breslin] built a boxing ring in the basement of the hotel, and the longest boxing match in history was in the basement of the Breslin Hotel, so we may honor of that. This guy ‘Jersey’ Joe Walcott beat somebody, so I was thinking we could call it Jersey Joe’s.”

New York Real Estate Foreclosure

Foreclosure filings went up in all five boroughs for Q1 – Q3 from 2008 to 2009, a total of 14% for all of New York City. While the numbers of actual foreclosures in places like East New York, Jamaica and Ozone Park are still higher, they are rising in higher-priced neighborhoods.

Sarah Ryley of The Real Deal did a great wrap up of the numbers, and notes that foreclosure numbers are rising in more middle-class brownstone and condo neighborhoods in Brooklyn, Queens, Staten Island and the Bronx- and that Manhattan’s quarterly foreclosure rate for the first three quarters of this year are up 108% in 2009, with many happening in the co-ops. With that said, 2008 had almost zero forclosures in NYC so you have to take 108% number with a grain of salt.

Photo Credit: respres

Foreclosure numbers are rising all over New York

The overall trend is that foreclosures are beginning to hit high-end neighborhoods- often the result of unemployment and upside-down mortgages. The Real Deal also quotes Deutsche Bank as predicting underwater loans (market value being less than book value) are threatening to rise from 11% to 77% in the New York metro area by next year. Short sales on homes with underwater loans are not looked upon kindly by banks.

New York Foreclosures and Banks

Rising foreclosure numbers pull property values down when regular home sales end up competing with short sales and discounted properties, posing problems for everyone. Further, second and third lien-holders are freezing bank accounts and garnishing wages when homeowners go into default on a first mortgage.

A new law opens an intriguing option to banks: they can choose to lower the principal owed on a mortgage if the homeowner agrees to split profits on the resale of a property. In theory, this new option, along with the new rules, will entice banks to keep people in their homes rather than foreclose. In a practical move, banks can now be charged by the city for property maintenance as well if they don’t keep the property up.

In addition, the law broadened the requirement for banks to send a 90-day pre-foreclosure notice to all homeowners, as well as requiring lenders to participate in settlement conferences with homeowners monitored by the court. For rentals, banks now need to give tenants 90 day notice for evictions.

The growing number of options and enticements for banks to keep people in their homes through altered terms should have an effect on the growing number of foreclosures, but only time will tell the extent of that effect.

Source: The Real Deal

New York Real Estate 2010

New York Real Estate 2010

Manhattan real estate in 2010 is still a question mark, but there are signs pointing toward a strong beginning of the year and no shortage of indicators and opinions about what comes next. 2009 was a year like no other, and for the end of the year that meant more activity in the market than usual. There were more showings and more closings than is typical for the holiday season, which is good news for the market. Most years the market takes a holiday break to shop for gifts, but this year folks were spending just as much time looking at properties.

Photo Credit: asterix611

The New Year in New York Real Estate

Manhattan Real Esate 2010

There are several factors that could push the strong holiday season well into 2010- Wall Street bonuses and the extension of the federal homebuyer tax credit, and a rise interest from foreign buyers all mean there will be people looking to buy.
At the same time, inventory will be back up for both homes and condos. The traditional trend is for people to take a property off the market during the holiday season and list it again after the New Year. Along with returning listings, there is a growing number of unsold development condos. Both of these factors will mean a rise in inventory.

The Real Deal notes that the 2008 holiday season was slower than is typical, coming on the heels of the Lehman Brothers bankruptcy, and that the 2009 holiday season was busier than usual, taking its cues from the sense that there are deals in the market if you can find them. The article is full of quotes from brokers talking about how the viewing activity is up.

Manhattan real estate in the post-holiday market? There is a collective sense that there are still deals to be found, that the market will remain stable for at least a few more months, and that there will be an influx of new property listings, both coop’s and condos.

I look forward to another great year. Happy New Year everyone.

Manhattan’s Shake Shack Puts the Local in the Burger

If you’ve been to Shake Shack then you know- the line around the block is worth it. but did you know they are expanding? Any successful restaurant is going to expand, and in the burger world, that typically means franchising and building the same restaurant model in each new location. For David Meyer and the Shake Shack, on the other hand, the expansion, while still going global, will stay localized and community-friendly.

Photo Credit: Scott Beale / Laughing Squid

Shake Shack prides itself and its premium burgers on being part of the community

The New York Times did a great feature on Danny Meyer’s sidewalk gourmet brainchild, and describes going into a Shake Shack as entering “a neighborhood-centered, urban-fantasy version of a burger roadhouse.”

Great visual, and the key take-away is neighborhood-centered. Serving hamburgers to Americans is nothing new- but the way Meyer and his partners do it and their plans to gently expand is.

Shake Shack Expansion Plans

Meyer’s expansion plans are purposefully calculated- they will not franchise- and focused on community and localization. His vision is for new Shake Shacks to become members of the communities and neighborhoods they are built in.

“We hope that each new Shake Shack can become both a citizen of, and mirror of, their communities,” he says.

After 6 years at their  flagship The Union Square Hospitality Group location and with a total of 3 New York City locations, they are only now are they pushing for expansion (after resisting countless expansion offers (including one for a reality TV show).

Contrast that with the 5 Guys Burgers and Fries that started franchising in 2003 and has 535 locations nationwide already- it’s obvious that Meyer wants to hold the brand and the vision close. It seems, in fact, that the slow pace is part of the vision.

David Swinghamer, Meyer’s longtime business partner who also handled the growth of Blue Smoke barbecue, says they are looking for maybe 20 non-franchised Shacks along the East coast in 5 years.

Shake Shack Customization

If you’ve been to their locations, you know they play off of their surroundings. The Shack on Columbus and 77th is customized to look like a sidewalk café as it is across from a museum, and the Flushing, Queens Shack sports the former Shea Stadium scoreboard skyline.

A Shake Shack pre-fab prototype runs around $1 million, and Manhattan will soon see new Shacks go up in at least 3 locations: Prince and Mulberry Streets this spring, another on the Upper East Side at East 86th Street near Lexington Avenue, and another in the theater district at 44th Street and Eighth Avenue.

Other locations include the ground floor of a Miami Beach building designed by the Pritzker Prize-winning Herzog & de Meuron and a Shack in Kuwait, to be managed by Alshaya, a local company that also manages Kuwait branches of brands like Starbucks, Dean & DeLuca and Le Pain Quotidien.

According to Swinghamer, “Our focus is not on how many you do. If we can’t do it right? We won’t do it.” Meyer adds that “we will grow as broadly as we can, without losing the quality, the hospitality, the community. And the sense of humor.”

They are taking pieces of the slow-food movement, the widening desire for fresh, organic food and the draw of the gourmet and wrapping them in localized, human experience. A fresh approach to the classic burger joint- now excuse me, I think it’s time for me to go get in line.

New York Real Estate Highlights: Madonna, Michael Hirtenstein, Natalie Portman and more…

New York real estate is the playground of the stars, and there is plenty going on right now. Here’s a quick look at the recent highlights in the celebrity real estate world, with thanks to Jennifer Gould Keil’s article in the New York Post where the original dish came from.

Photo Credit: Katy Silberger

Celebrity plays in the Manhattan and New York Real Estate Market

• Manhattan real estate sees its share of star power, but apartment 3K at 416 Washington St. and 92 Laight St. soundss immune to the allure of celebrity when it comes to business. Natalie Portman reportedly tried to rent a condo at The River Lofts in TriBeCa for 3 months but was turned down as the owner only wants to sell. MSNBC anchor Rachel Maddow and other prospective tenants for the $1.495 million property would also be sharing the property with actress Meryl Streep, model Karolina Kurkova, Niche Media publisher Jason Binn and actress Gwyneth Paltrow.

• Prudential Douglas Elliman brokered a deal by Miracle NY Properties LLC for an anonymous Internet/ computer superstar who bought a 10,000-square-foot unit on the 17th and 18th floors of Jean Nouvel’s 100 11th Ave. 23-story building for a high tech $22 million. The building is hot, with at least 25 units in contract.

• Michael Hirtenstein is putting his 25 Bond St. property on the market for $50,000 a month after selling his 23 Gramercy Park South townhouse this year, both plays in preparation to move into his new $13.5 million townhouse at 92 Charles St.

• And finally, Madonna is reportedly buying Kelly Klein’s horse farm in Bridgehampton for under than $10 million, possibly in conjunction with another nearby horse farm at 10 Mitchells Lane. Because no home can be built on the property, she may also be corralling a house at 549 Mitchells Lane for the hired hands, owned by Michael Minkoff and listed at $4.4 million. The broker reportedly denied the deal at first and then changed step to say no comment! Now that is the way to gallop into the new year!

Manhattan Real Estate and Swig Equities: When Giants Fall

It sounds like Swig Equities is looking for some hope under the tree this year. It’s hard to watch a successful giant of the New York real estate game fall, but it’s even harder to look away. The well-publicized slide of his real estate ventures saw his Sheffield57 condo go to foreclosure auctions and his offices recently rattled by possible eviction proceedings.

Photo Credit: ShellyS

Kent Swig's problems have only grown since trying his luck on the Sheffield57 property.

Swig Equities

Other holes in Swig Equities? The payroll has been a few days late more than once this year. Diesel jeans, Swig Equities’ landlord, served a 3 day notice of pending eviction proceedings. Capital One placed Swig’s 2007 loan on the 140 Williams Street building into special servicing.

“I’m meeting with all his creditors and trying to come up with a global restructuring so he can live to fight another day, like many real estate developers have in the past and will in the future, and we’re very hopeful he’ll be one of those,” Y. David Scharf, Mr. Swig’s attorney, told the New York Observer.

While it’s refreshing to see that kind of loyalty, optimism may help in negotiations but it doesn’t pay the rent. I can only imagine both Swig and his employees are hoping Santa drops by their office this season.

Testwell Accused of Faking Concrete Tests for Major New York Real Estate and Landmarks

Last year it was the cranes- this year the concrete!? The stability of structures New York holds as sacred is now in question- not the real estate market, but the stability of the concrete used to build them.

Photo Credit: whatdavesees

Will the integrity of NYC concrete testing stand up to questioning?

Testwell Laboratories, in a move that smacks of irony, has apparently “adjusted” or outright faked various concrete strength tests- which makes me question their integrity on two levels! Prosecutors are bringing charges against Testwell’s president and other officials, charging that the lab made up and/ or manipulated concrete and steel test results.

According to the Manhattan District Attorney’s office, the charge is essentially that Testwell used computer models to check project specific concrete strength and then doctored the paperwork as if they had physically mixed the test-concrete and tested it on-site. Additionally, real on-site tests were frequently altered.

It’s good to know that someone is on to these guys- the problem is that over 100 buildings in the city are already built from concrete they tested. A few dozen of their structures have since been tested by the city and declared safe- we’re talking about places like: Yankee Stadium, the Freedom Tower, the Second Avenue subway line, office buildings in Times Square, and the JetBlue terminal at Kennedy. 70+ others remain untested.

Jury selection started last week in the Testwell case. Prosecutors have also charged another concrete testing company and its lab director with falsifying test results for the Sept. 11 memorial, LaGuardia Airport’s control tower and nearly 100 other projects. That company and lab director have pleaded not guilty; no trial date has been set.

Testwell officials and lawyers explain away the charges, saying that customers knew about the computer modeling and that it is proven, and that smoothing over inconsistencies in paperwork is basic error correction and common in the industry. Maybe- but I doubt that kind of argument will “stand up” in court.

“Everybody, I think, is more on edge. But we don’t have a sense, as yet, that there’s been an endangerment of safety,” Cement League lawyer Joseph S. Kaming is quoted as saying. Hopefully that’s the case.

The bottom line is that this puts every construction company in New York on notice and, in slowing down building contracts, delivers yet another sucker punch to the construction industry.

Virtual Office Web sites: The Future for Manhattan Real Estate Listings?

As with any new technology, there is jostling as the traditional adjusts to new options. In real estate, that adjustment is in how and where listings can be found on the Internet, and the impetus for change comes from a new application of anti-trust laws to emerging Virtual Office Websites (VOW’s). A Virtual Office Website allows consumers to view a brokerage’s own listings, as well as those from other firms.

Photo Credit: jonathanjonl

The Virtual Office Website is poised change the New York real estate game.

Virtual Office Websites and the Law

In 2005 the Department of Justice filed a lawsuit against the National Association of Realtors (NAR), asserting that it was illegal for NAR to allow brokerages to withhold listings from VOW’s. Why? Because it hinders competition. Whether you agree with the DOJ or not, they won the case, and now anyone with a registered VOW can post all the listings they want.

Essentially, the agreement enables any firm to register as a Virtual Office Web sites (VOW) with the Real Estate Board of New York (REBNY), pay an access fee, and post listings from any of REBNY member on their site.

Small firms like it because it is good for web traffic and good for business- some large firms don’t like it because they think it will cut into their business and hurt their competitive edge.

I think this certainly is a victory for the consumer. They will be able to go to any web site and see every listing in Manhattan. Every real estate site will be one stop and shop and that could certainly even out the playing field- a small firm will have the same listings as a large one. With that said, customers are used to shopping on sites like Elliman.com, as Elliman already has one of the most technically advanced and consumer-friendly web sites in NYC, and I think that will continue as they develop their VOW technology. Just as people continue to watch ABC, CBS and NBC more than even the largest cable stations, they will continue to go to the largest brokerage firms for their real estate content. This will be contingent, though, on the ability of large firms to  to create that content. The business model is changing and content, not listings, might be the driving force to the real estate websites of the future.

How Virtual Office Websites Work

There have been aggregator sites like StreetEasy and Trulia that gather and post information on local listings for years. The difference is that these are third-party sites that end up being comparison starting points for buyers. The new access could lead to a Multiple Listing Service (MLS) for the New York market, the kind of service that many regions around the country already use.

VOW’s, on the other hand, have an opportunity in every listing on their site.

Let’s say Hoch Group was a VOW and we listed properties from all over Manhattan, both our listings and those of other firms. If a buyer is browsing through listings and they find one they like that isn’t ours, they can inquire about it through us and we can be the buyers broker for that deal.

Eventually, acceptance and use of VOW’s could create space for expanded use of Multiple Listing Sites (MLS’s), where a variety of firms voluntarily list their properties alongside those of other firms. That’s would be an even bigger step, but it may be just around the corner.

What’s is certain is that VOW’s will take the Manhattan real estate market one step closer to both level competition and transparency.

How To Buy An Apartment in a Down Market

Manhattan’s Bidding Wars

Bidding wars are back. More than half of the properties on the Manhattan market are listed over current market value. Those you don’t want. But the rest are priced to sell.  As a result, all of the serious buyers focus their bidding on the same properties- and those properties end up going for at or very close to their listed price.

Photo Credit: Estrella Esteve

Bidding Wars are back in Manhattan

How to Buy an Apartment in a Down Market

You bid, you feel good about it, someone outbids you so you bid again, and suddenly your excitement turns to anxiety or confusion over what do do and how to do it.

Here’s the deal: Know what you are willing to pay when you go in. Consider the impact of interest rates on the true cost of the property. Bidding wars do mean you have to act fast and mean it. What they don’t mean is that you have to throw caution to the wind.

Here’s how I put it to the New York Times last week:

“The way we negotiate a bidding war is different now. You want people to feel comfortable with what they’re paying and you don’t want them to put out a number that’s too big and then have them get buyer’s remorse and back out.”

Some of the buyers profiled in that article were all over the place- Just because there are bidding wars going on doesn’t mean you need to act like you’re on your third martini.

Sit back and nurse your scotch- the deals are there. Find the place you love and then bid like you mean it. Be ready to bid again and again, but start low enough that you end up where you’re comfortable. You can overbid because there’s a good chance the place is listed under market, and that means you still get the deal.

Mahattan Real Estate: Stabilizing Rents and Buyers’ Neighborhoods

In the Manhattan real estate scene, some neighborhoods are having far more success than others in selling this season. If you are contemplating buying, that can mean deals. What’s more, rental prices around Manhattan changed very little from October to November, which means the rental market is stabilizing, even if momentarily.

Photo Credit: edenpictures

Some neighborhoods are having a hard time attracting buyers

What Stabilizing Rents Mean

If rents are stabilizing, it means two things:
1) That good deal on the rental will still look like a good deal in a few months.
and
2) High occupancy in rentals is a leading indicator that home prices will rise. Usually rentals and sales work inverse of each other. If there are vacancies rental prices go down and it makes more sense to rent rather than buy. If occupancy goes up and rental prices go up, people stop renting and make the investment of home ownership.

In this fluctuating market, knowing that rents are steadying is valuable- and taking their level into account can help you make a good play for you and your family.

Good Manhattan Neighborhoods for Buyers

Matthew Haines, founder of PropertyShark, prepared some great numbers about Manhattan neighborhoods recently- Haines and his team dug into third-quarter numbers to help pinpoint the five areas of prime Manhattan that have been toughest on sellers. They evaluated Manhattan neighborhoods on three major criteria:

1. How long it takes a typical seller to find a buyer there (Manhattan average: 150 days)

2. What is the median-price drop over the past two years (Manhattan overall: 10%),

3. What is the number of closed sales relative to the total number of properties on the market (23%)

Then they went on to evaluate the five neighborhoods where sellers may be most ready to make a deal. Here they are:

1. Chelsea/Flatiron/ Union Square/ Hudson Yards
2. Midtown/Midtown South
3. Soho/Tribeca/Little Italy
4. Upper East Side/Carnegie Hill
5. Battery Park City/Financial District/South Street Seaport

In each of these neighborhoods, properties spend well over 140 days on market, several have seen a 10%+ price drop from 2007 rates, and less than a quarter of the properties on the market in each neighborhood have been closed. (For more details, look at the NY Mag article).

With that said those hot downtown neighborhoods are hurting but primarily in the luxury market. I don’t want you getting too excited and thinking you will get the 2000 sq foot Soho loft you dreamed about for 500K. Most of the pain has to do with properties in the luxury market.

If you are looking to buy in any of these neighborhoods, now is a good time. Bottom line: When the market is weak, prices become more flexible. In those neighborhoods the numbers don’t lie.

First Time Home Buyers Tax Credit in NYC

On November 9^th President Barack Obama extended and expanded the first-time homebuyer tax credit . The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline to April 30^th 2010. It also expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate. 

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program. 

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000. 

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010. 

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify. 

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return. 

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase. 

The www.federalhousingtaxcredit.com site is being updated. Check the site next week for more detailed information on the new tax credit. 

Read more: http://rismedia.com/2009-11-08/obama-signs-homebuyer-tax-credit-extension/#ixzz0X7jA9gTl

What to Look For in a New NYC Agent

I regret to announce that next week Kara Barney, one of the Hoch Groups prized agents, will be leaving us and moving to Arizona. Suddenly I am looking for a new agent. This process has started me thinking about what’s important to look for when hiring someone to market a home. I will be looking for someone with experience; my clients are too important to have an agent learning on the fly. New agents are surprised by all the nuances that exist when dealing with buyers, lawyers and the sellers themselves.

Follow up is also key; unfortunately for some unlucky sellers it is the element hardest to measure that most agents lack. In an office meeting last week my teams manager handed out a sheet of statistics it stated, “48% of sales people never follow up with a prospect. 25% of sales people make a second contact and stop. 12% of sales people only make three contacts and stop. Only 10% of sales people make more than three contacts. 2% of sales are made on the first contact. 3% of sales are made on the second contact. 5% of sales are made on the third contact. 10% of sales are made on the fourth contact. 80% of sales are made on the fifth to twelfth contact.” I’m not sure how they came up with those statistics and if a buyer came to visit one of my properties twelve times before they made an offer I would need to debate whether I wanted to do business with them at all. With that said, the chutzpah and organizational skills necessary to follow up with buyers and brokers alike makes all the difference in the world. If I was hiring a broker to sell my home I’d ask, “Do you use a CRM (Client Relationship Management) program? How often do you reach out to the customers and brokers who may be interested in my property?” A great broker will straddle the line between consistent and annoying. Someone who is not interested at all might get irritated but they don’t matter anyway.   They were never going to buy the property. The person who has some interest may be reminded of a unit they saw early in their search and may come around for a second showing because that broker was on their game. Of course this only works if the agent is a good talker, friendly and people enjoy working with them. This is another set of qualities that I’m looking for in a new hire. A great agent has the ability to tell the truth to their clients even when it is not easy to present or hear. Part of our job as brokers is to give an objective analysis to the best of our abilities. In this market often there is news that a seller needs to digest but clearly do not want to hear. The ability to couch that conversation and present it gently is one of our greatest services.

Financing A Co-Op or Condo in NYC

 There has been a lot of talk in recent months about the evolution of the mortgage markets and the new obstacles buyers and sellers must confront.  On the street everything from mortgage contingencies to appraisals have become more complicated. Since we can’t control the banks today we are going to take a look at what we can control, the language of the contract of sale and how it relates to your financing.

Traditional Financing  Contingency

The traditional contingency allowed the purchaser to cancel the contract and recover the contract deposit only if they were unable to obtain a commitment letter within a certain amount of time. Once upon a time a buyer applied for a loan, got a commitment letter within a week, the appraisal came in right at the contract price and then a few weeks later the deal closed. This is no longer the case. It is now harder to obtain loans, lenders are less likely to grant loans and therefore more has to be done to protect your interests on both the buy and sell side.  Just last week we had a great talk at PDE on the Upper West Side from Friedberg, Cohen, Coleman and Pinkas.  They came up the tips below on how to protect your money.

What is a funding contingency?

This eliminates all risks associated with financing and protects a purchaser in the event the lender becomes insolvent, is put into receivership by the federal government and is effectively no longer conducting business.

Sample Funding Contingency: “If the purchasers institutional lender or licensed mortgage broker, through no fault of purchaser, fails or refuses to fund the loan it has committed to make pursuant to the loan commitment letter than purchaser shall:

i. Have the right to cancel the contract and receive the deposit back; or

ii. The original contingency period shall commence again and purchaser agrees to reapply with a second loan application with another lender or a lender of sellers choosing based on the same terms and conditions of the original contract.

How do you protect a qualified buyer who is pre-approved?

Add the Following Conditions to the Traditional Financing Contingency:  

i. Subject to project/ building approval

1. Insurance

2. Fidelity Bond Coverage

3. Sublets

4. Sponsor owned units

5. If new construction- percentage of units closed

6. Third party investor approval

7. Interest rate expiration resulting in and excessive rate which disqualifies borrower

Helpful Tips for Everyone

1. Thorough review of commitment letters
2. Review all conditions listed by the lender
3. Satisfactory appraisal
4. Satisfactory building project review
5. New construction
6. Review expiration date of the commitment letter and lock in date of loan
7. Purchaser should agree to apply to a second lender if declined by intial lender
8. Purchasers should agree to post an amount equal to one years maintenance charges in am escrow account with the co-op

Manhattan Market Reports

3^RD Quarter Market Reports

The third quarter market reports were released this week. 

In the Manhattan Market the median sales price of an apartment fell 8% from the prior years quarter

The overall median sales price fell %8.4 from the prior years median sales price.

With this drop in price came an uptake in transactions.  We saw the market repairing itself ; with a 45.6%  increase in sales from the prior quarter.  With this jump in sales (it is not typical for the market to jump like that from the second to third quarter) there was a resulting decline in listing inventory. Historically the number of transactions peaks in the second quarter when Wall St receives their bonuses.  Due to the current economic climate we are now seeing a peak in transactions in the third quarter and not the second.  Elliman explains this as “the unsually low level of sales activity in the first quarter of 2009 appeared to set the stage for a release of pent up demand later in the year.” 

 Even though we saw a surge in sales transactions this quarter the number of days on market continue to increase.  What this translates to is that the apartments that have been sitting on the market for an extended period of time were snatched up this quarter.  With this comes a listing discount that is up to 7.6% from the prior years listing discount of 2.6%.  We actually have seen the discount in price begin to stabilize as it went from 7.8% in the prior quarter to 7.6% in the 3^rd quarter.  The days on market is still up from a year ago but we are selling an increase in what is actually selling.  This increase in sales with the increase in the listing discount shows that sellers are “meeting the market.” Sellers are more willing to price an apartment to sell.

Gifting Apartments in NYC

           The largest single group purchasing apartments in today’s market is the first time home buyer. Often many of these clients are gifted money from family members raising the question  “If I gift down payment money to my child; what are the tax ramifications for me?” The Hoch Group set out this week to answer this question and provide you with the answers. Please note that I am not an accountant or a lawyer and you should consult with your accountant or your lawyer before you make any financial decisions.

 With gifting, to be clear we first must understand according to federal law what is defined as a gift.  According to About.com if you “give jewelry, stocks, real estate or any other type of property to a family member other than a spouse or to a friend and they don’t pay you the full market value and you have no expectations of getting the property back in the future than you’ve made a completed gift that may be subject to federal gift tax.”

 Who pays this gift tax?

 The giftor; the one giving the gift is responsible for paying this tax. The person who receives the gift does not have to report the gift as part of their annual income. 

 How much can I give away during my lifetime without being taxed?

Currently you can give away gifts in value up to $1,000,000 during your lifetime without owing any federal gift tax.  When you give gifts valued at more than $13,000 annually you have to file a federal tax gift form- Form 709 with the IRS.  This $1,000,000 lifetime amount is in addition to the $13,000 a year you are allowed to gift. 

 If you give more than the annual amount during the year and you file for a gift tax form the remaining amount that is gifted can be taken out of your lifetime gift amount.

 For example if you give $15,000 one year and you filled out a 709 for a Lifetime Gift as well only $2,000 that year will come out of your $1,000,000 lifetime gift exemption.

 Does that $1,000,000 lifetime amount have to go to the same person?

No that $1,000,000 lifetime amount can be gifted among multiple parties. 

 How much of a gift can be excluded from taxes?

 According to About.com federal law also exempts the first $13,000 of gifts made annually to anyone other than a spouse from the federal gift tax law.  $13,000 is an increase from the $12,000 exemption that was available in 2008.This dollar amount is referred to as the annual exclusion from gift tax. 

For example if a father gifts his son $12,000 in January and then $110,000 in June; $109,000 of that gift will be taxable and the other $13,000 will be free of tax.     

 Always consult with your financial advisors and accountants before making any final decisions. 

Altruistic Brokers

It is so easy while working in real estate in New York City to lose perspective on the world as a whole. On Wednesday my perspective was put into sharp focus when I was lucky enough to attend an inspiring fundraiser at Pier 40 for Mapendo International .  Mapendo is a non-profit organization that works to aid forgotten refugees, cutting though red tape and helping these refugees build a life in America. The highlight of the evening was Rose Mapendo, the namesake of the organization speaking of her journey out of the Congo. She recalled being separated from her husband on her way into internment camps and then later learning of his execution. Rose spoke of giving birth to premature twin boys on her prison floor and having to beg for a piece of Bamboo to break the umbilical cord. Her story was not so different than the stories my grandmother used share about surviving the concentration camps in Europe during world war two.  Rose, my grandmother and thousands of others continue to be survivors of genocide.

 As I continue to negotiate several deals this week for my listings I am less restless knowing how blessed we are and how much we should be grateful for. I have also made a commitment this week that the Hoch Group instead of giving frivolous closing gifts will now donate money on behalf of our clients to the charity of their choice. Every transaction we do is testament to how lucky we are to live in America and have the freedoms that we take for granted.   So instead of a bottle of Champagne or a monogrammed steak knife we all can agree helping feed a family or saving a life is a far more generous gift.  The Hoch group is now committed to giving to those kinds of gifts for every deal we close.

NYC Real Estate and Inflation

One year ago this month my phone stopped ringing, today the real estate market in NYC has shown a pulse. In the last month we have seen increased web traffic and a flurry of signings of sales contracts in the normally slow summer months. Overall, according to Street Easy.com there were 838 contacts signed in  August, up 27.2% from the same month a year ago. The big question preoccupying everyones minds is whether this upturn is here to stay or only a pause in a bear market that will last for years. David Dreman from Forbes  magazine put it better than I could he said, “In the end you can’t obsess over figuring out the answer. Markets are unpredictable. Instead of trying to time the market, think about what is going to happen over the next decade and how you will cope with it. You should be thinking about the purchasing value of the dollar. Central banks, including our not-so-omniscient Federal Reserve, will again fail to take the punch bowl away from the party soon enough, keeping stimulative polices going far past the point when unemployment has turned a corner and the financial debacle is behind us. Treasury Secretary Geithner and Fed boss Bernanke are trapped by politics and events. They make pronouncements downplaying the inflation threat, but inflation will hit like a tsunami within three years, maybe sooner. What do you do to defend yourself? Buy stocks, buy real estate and sell bonds…. If inflation hits hard, the chief culprit of the bear market–real estate–is likely to be one of the best investments in the years ahead. Buy a home if you don’t already have one or a second home if you can afford one.”

I don’t know if he is right or wrong but I will say that interest rates are at an all time low, prices are down 20% and though this recent flurry of residential activity has decreased inventory there are a lot of good apartments to choose from. Obviously I am a broker and I want you to buy but David Dreman is right, inflation will play a part in all of our financial futures and if inflation rises buying a home at a 10 year low with a mortgage rate of 5% is a great financial play.