Ever found yourself wishing you were in your twenties in the City again? If you value your space and creature comforts, be glad it’s a daydream and not a reality. The New York Times collected stories of 20-somethings from around the City, focusing on the sacrifices and hardships involved to make it work. The article paints a picture of what it’s like to be a 20-something in New York City that’s chillier than the November air- everything from gunshots outside the window to paying over $500 a month for well under one thousand square feet. They even cited an investment banker who can only afford a 450 square-foot studio apartment… Seriously?

New York City Planning Department statistics say it’s true: “46% of New Yorkers in their 20s who moved to the city from out of state between 2006 and 2008 lived with people to whom they were not related.” That’s up from 36% in 2000. That same group of 20-somethings from out of state who pay at least 35% of their income for rent is up 3% from 2000 to 42%.

There was one theme running through story after story told by the kids in the article that we can all nod to in our own way: the quarters may be tight, but you do what you have to do to live in the city…

Photo Credit: meironke

When you think expensive, it’s easy to think big. But there are some amazing places around the country that pack a whole lot of elegance- and a whole lot of expensive- into a one bedroom apartment. Here are the most expensive apartments in three of the most amazing cities in the U.S… Starting, of course, with a New York City gem.

#1: New York City: 781 Fifth Avenue, #1701. $6,950,000

More than double the second-most expensive? Yes. More than double the  best place to live? Also yes.

#2: Seattle: 2720 3rd Avenue, PH2. $3,000,000

This $3 million dollar landing pad is home to some out of this world views.

#3: San Francisco. 1200 California Street, #25A. $2,895,000

Simple elegance that looks out on the Golden Gate to the sea.

Photo Credits: Curbed

3Q Manhattan Market Report

The third quarter was an extension of the ‘spring market” characterized by a more normal number of sales and inventory levels, and a shift toward a more typical mix of apartment sizes.

The Manhattan housing market rebound continues. The third quarter market was similar to what we observed during the second quarter “spring” market. Sales and inventory remain within market norms and we are seeing a more normal mix of the size of apartments that are sold. Last year there was an unusually high amount of first-time buyers seeking to take advantage of improved affordability, while this year has seen more middle and high-end homes sell. We are in a much better place than we were last year, but the economy still faces many challenges. Record low mortgage rates, improved affordability and favorable exchange rates continue to drive demand for Manhattan apartments.

• After three consecutive quarters of double digit declines in year-over-year inventory levels, the pace of the declines appears to be easing. There were 8,123 listings at the end of the third quarter, 3.2% less than 8,389 listings in the prior year quarter and essentially unchanged from the 8,157 listings in the prior quarter.

• There were 2,661 sales in the third quarter, 19.3% above 2,230 sales in the prior year quarter, but 3.4% less than 2,756 sales in the prior quarter. With the increase in the number of sales came a shift in the mix of apartment sizes that sold during the period that skewed the price indicators higher. There was a sharp decline in studio sales to 9% market share from 17% in the same period last year, but a 10% jump in 1-bedroom and 2-bedroom apartments.

• Overall price indicators show gains over prior year and prior quarters, and were skewed higher by the shift to a more normal sales mix by size of apartment. The median sales price of a Manhattan apartment was $914,000, 7.5% higher than $850,000 in the prior year quarter and 1.7% above $899,000 in the prior quarter.

• Properties sold more quickly in the quarter than during the same period last year. The average days on market—the number of days between the last change in list price, if any, to the contract date—was 125 days or 42 days faster than 167 days last year. Sellers were more in sync with market value this quarter. Listing discount—the percentage difference between the list price at time of contract to the contract price—fell to 5.8% from 7.6% in the prior year quarter.

Co-Op Market

• The median sales prices of a Manhattan coop was $777,500, up 23.4% from the prior year quarter median sales price of $630,000 and 11.5% up from the prior quarter median sales prices of $697,501.
• The average sales price was $1,251,959, up 24.5% from the prior year quarter average sales prices of $1,005,744 and up 12.5% from the $1,113,173 seen in the prior quarter
• Price per a square foot was $990, up 5% from $943 per square foot in the prior quarter.

Condo Market

• The median sales prices of a Manhattan condo was $1,120,000, up 10.3% from $1,015,124 in the prior year quarter, and up 1.8 % from the prior quarter to $1,100,000.
• The average sales prices in the third quarter was $1,719,296, up 8.9% to $1,579,438 from the prior year quarter averages sales price, and up 3% from the prior quarter.
• Price per a square foot was $1,199, up 5.7% from $1,134 per square foot in the prior quarter.

In the third quarter of 2009, rental properties were moving slowly and landlords were negotiating and offering landlord concessions. The thrird quarter of 2010 saw a change in rental landscape.  In fact, the listing discount is down to 1.7%, its lowest level since 2006.

Why so low? As you can probably feel, things are stabilizing and people know it- units have been moving faster and they don’t need the same kind of incentives as they needed last year. Days on Market is down to 38 this quarter from 77 last year at this same time, which means that people are looking to rent and making it happen. Citi Habitats told the Real Deal that just 23% of their rental transactions this past quarter included a concession- that’s down from 52% at the same time last year.

Another factor is the reasons people are looking for a new apartment. With leases coming up and concessions no longer in the mix for many tenants, there are a large number moving around a looking for something new. At the same time, businesses are bringing in employees from outside the country who need rentals. That also explains why smaller apartments (studio or 1 bedroom) are more price-stable than larger apartments- because many of the people who are relocating from abroad are single or married couples without children.

The good news for everyone is that the market is not only showing signs of stability, but indicators of strength. It’s not quite a landlord’s market- but it’s not the concession-friendly, take-your-time kind of market it was a year ago either.

Ground floor apartments tend to have a reputation for being a little bit loud, unsafe, or dark, but, as NY1 points out, that isn’t always the case. And in a market when people are looking for a good deal, there’s no reason not to rule out ground floor apartments too quickly.

For example, if that dreaded ground floor apartment is in the back of the building instead of near the street, it will be quieter than others. If it’s behind the doorman, security shouldn’t be a concern. And another possible advantage is simply space:

“A lot of the time, typically in prewar buildings you’ll see third, second and first floor have higher ceiling heights, larger floor plates because typically they are used as doctors offices or other commercial use so now that these are used for residential, you get a lot more bang for your buck.” — Francs Katzen of Prudential Douglas Elliman.

In addition to more room, you will often pay less and find a more creative floor plan than the rest of the building. And then there’s the view. True, you won’t have a view of the looming skyline, but you may overlook a garden or even have some outdoor space to call your own. “I don’t think people understand what they are missing. They need to see it. Typically what I would say is you need to see it, and then tell me what you think,” Katzen says.

If you’re one of those digging around for a good deal on an apartment right now, keep the buried ground floor treasures in mind.

Photo Credit: th.omas

The only thing more confusing than finding a good apartment in the New York real estate market itself may be some of the rules that govern what you can do once you have a place. Let’s say you have a Co-op, and in this economic climate, you need to bring a roommate in to help with the cost of the apartment. Do you need the board’s approval? How much authority do they have over what you do with the space?

Real Property Law, Section 235-f says that co-op owners (and renters) can take on “one additional occupant” in addition to immediate family, provided that the owner or renter is actually living in the unit at the time. Clear enough.

Brick Underground went a step further on this issue, recruiting a good array of expert legal opinion.

The bottom line? If you own a co-op apartment and you want to take on a roommate, you don’t technically need the board’s approval, but the more they pay you to live in your space, the more claim they may have over who you bring into your apartment.

Here are some of the finer points:

* If a roommate is moving in and isn’t paying, “…it’s likely that your only obligation is to inform the board (or landlord) about your new roommate within 30 days of the time he or she moves in.” — Steven Wagner, real estate lawyer

What about a paying roommate?

“If the roommate is paying rent to live in the apartment, that person is not a roommate, but a subtenant, and based on the prohibitions contained in most proprietary leases, would require the board’s consent.” — Stuart Saft, real estate attorney

“…while charging the roommate a fee may give the board a claim [emphasis added] that there is an element of subletting going on, the case law in this area indicates that tenants and shareholders are allowed to charge their roommates for use of the apartment and its furnishings.” — Jeffrey Reich, real estate lawyer

“A shareholder can split living expenses with a roommate. If, however, the shareholder is profiting on the arrangement, the apartment corporation could deem that a sublet requiring an application process and consent.” — Eric Goidel, real estate attorney

Thanks to Brick Underground for assembling these opinions.

Photo Credit: Jules Antonio

Did you or someone you know claim the first-time homebuyer tax credit on your 2009 tax return? Did you know half of the people who claimed it will end up paying that credit back? According to a report from the Inspector General for Tax Administration, 950,000 of 1.8 million who claimed it will need to repay. Why?

Homebuyers were eligible for two separate credits based on when they bought their home. First time home-buyers could deduct up to 10% of the purchase price or $7500, whichever was less- the difference was if they bought the home in 2008 it was a no-interest loan, but if they bought in 2009 it was a full-on refund.

There has been some concern over whether the IRS has a clear method for figuring out who is trying to fudge the purchase date of their home, claiming it in 2009 when it should be 2008, but the majority of the 73,000 erroneous purchase dates on claims were actually the opposite- first time buyers listing 2008 when it should have been 2009. The IRS has already corrected 60,000 of those incorrect purchase dates. They will also be looking into thousands of tax credits claimed by people who are now listed as deceased by the social security administration.
What date did YOU list?

Photo Credit: omniNate

This article appeared in the Wall Street Journal this week and hit the mark. Reprinted here in full:

10 Reasons To Buy a Home

Brett Arends discusses why he thinks now is a particularly good time to buy a home.

Enough with the doom and gloom about homeownership.

Sure, maybe there’s more pain to come in the housing market. But when Time magazine starts running covers that declare “Owning a home may no longer make economic sense,” it’s time to say: Enough is enough. This is what “capitulation” looks like. Everyone has given up.

After all, at the peak of the bubble five years ago, Time had a different take. “Home Sweet Home,” declared its cover then, as it celebrated the boom and asked: “Will your house make you rich?”

But it’s not enough just to be contrarian. So here are 10 reasons why it’s good to buy a home.

1. You can get a good deal. Especially if you play hardball. This is a buyer’s market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We’re four to five years into the biggest housing bust in modern history. And prices have come down a long way– about 30% from their peak, according to Standard & Poor’s Case-Shiller Index, which tracks home prices in 20 big cities. Yes, it’s mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You’ll never catch the bottom. It doesn’t really matter so much in the long haul.

Where is fair value? Fund manager Jeremy Grantham at GMO, who predicted the bust with remarkable accuracy, said two years ago that home prices needed to fall another 17% to reach fair value in relation to household incomes. Case-Shiller since then: Down 18%.

3. You’ll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you’ll get a tax break on capital gains–if any–when you sell. Sure, you’ll need to do your math. You’ll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

5. You’ll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you’re better off buying.

6. It offers some inflation protection. No, it’s not perfect. But studies by Professor Karl “Chip” Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That’s valuable inflation insurance, especially if you’re young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.

7. It’s risk capital. No, your home isn’t the stock market and you shouldn’t view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

8. It’s forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won’t. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn’t a cost. You’re just paying yourself by building equity. As a forced monthly saving, it’s a good discipline.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That’s below last year’s peak, but well above typical levels, and enough for about a year’s worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed–either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the “glut” simply won’t matter: It’s concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won’t have any long-term impact on housing supply in your town.

Source: Wall Street Journal

It’s no secret that it’s a challenging time to be a real estate broker. This week the Real Deal tells stories about listings taking much longer than expected to show up on the market. This doesn’t sound like a big deal but it is as some brokers are sitting on listings in order to get direct buyers.  A direct deal, a deal where there is not another broker involved, can yield more commission for the selling broker but holding a listing off market in order to get the larger commission is a violation of the brokers the fiduciary responsibility to their client. Less exposure equals less offers which equals a reduced sales price. In addition it violate the Real Estate Board of New York (REBNY) rules requiring all listings be shared within 24 hours.

With the number of listings down, brokers who are starved for cash are making bad choices for the community, for their clients and for buyers. In addition to not putting listings in the system they are delaying updating listings to contract signed or sold. The advantage of not updating listings is to attract buyers with money to spend on other units. The effect on the buyer community is that they are spending time calling listings that don’t exist.  

Because of how REBNY works, there is very little enforcement of the co-broker rules. It’s been years, but New York brokers haven’t always been required to share listings with other agents, and there are no clear guidelines on how it’s supposed to work in the first place. And now, with commissions getting tighter, people in the industry are opting for the grey area.

REBNY has done a good job of encouraging co-brokering over the past decade, and there is general agreement that it is in the interest of the seller to see their listing appear on market within a short time-frame, but market pressures are pushing some brokers to make bad decisions.  

Is it systematic? No, not at all. I don’t do it and my managers strictly prohibit it.  But it is happening and sellers need to be aware.

Photo Credit:  andrewmace–

A big part of creating a home out of the condo or apartment of your dreams is making it comfortable and elegant- and not just in the common areas. And what better way to figure out what makes your space a home than to customize an inspired design in your bathroom? Mark Cutler, posted some of his favorite tub pictures, inspired by a recent trip he took to the gulf. So here are a few from his “A Few Tub Shots” post- hope you feel inspired!