Yet with no real indication of rate increases beyond normal fluctuations, and various indications that the pain in Europe will cross the Atlantic- at least the stock market- it’s hard to understand what will trigger higher mortgage rates- other than a sea change at Fed. 

With more than 50% sold in most new developments, loans are there for you

I’m getting reports of overworked mortgage brokers, in addition to similar anecdotal evidence with RE attorneys. 

If you are an owner, think about a refinance.  If you’re thinking about a purchase, let’s get you preapproved for your mortgage.

1) I just received a gorgeous table book on Neil Denari on HL23, a High Line development on West 23rd street, which has only one unit remaining, on the 11th floor.  “Extraordinary views, impeccable finishes, and unique position in the iconic building that has captivated millions from its lofty position over the world’s most lyrical urban park.”  If that sounds amazing, it should.  The building’s lower floors, all sold, have a fishbowl quality- but the high floors’ views are simply amazing.  Full floor pricing was in the $4-5mm range, and at $2450/square foot for this property, asking $6.3mm, this seems like a much better deal than some of what I’ve seen.  I’m not sure what seemed more interesting, the book, or the fact that there’s only one unit left.   

2) Email from my friend and fellow broker Donna Olshan,  telling me- not that I’m surprised- that last week $237 million of property at the high end of the market, meaning over $7mm.  29 units, across town.  Average asking price of the condos in contract downtown was $2292 per square foot, average size 3500 square feet.  Downtown has been a bit sleepy over the last year or so, and it’s coming back with a vengeance.  I have a 4400sf unit at 45 East 30th  so far below this average price per square feet, that I must ask the question- why would someone pay $2250/square foot instead of $1300 per square foot for similar square feet? 

Is it is the “Not all square feet are created equal” slogan which I’ve seen around town?  Or does it becomes about the profile of this penthouse-type buyer- does this buyer want to do work, or is it like buying a piece of art?  Does it need to be perfect?  Fewer buyer seem willing to dive into a project without clear cut budgets.   Does it need to all be on one floor?  Or will people consider duplex/triplex/quadruplex units? 

3) Consider this article from the Real Estate Board of New York (REBNY): “Residential Sales Brokers Predict Pick Up In Market” – which popped into my inbox.  This is based on the polling which REBNY takes of its membership.  “Manhattan neighborhoods that posted the most sales were the Upper East Side and Upper West Side with 543 sales and 478 sales respectively…Based on the first quarter results and an improving economy, we expect a pick-up in pricing and activity going forward…76 percent of brokers reported that they expect the second quarter of 2012 to be better than the first, a 16 percent increase from last quarter.”  To put it another way, optimism seems to be in large supply. 

4) Or this article which just jumped into my inbox today from Crain’s, “Apartment Prices and Sales Jump…” It confirms what I’ve been writing here for the last few months. 

5) Two weeks ago my townhouse at 10 Jumel Terrace appeared in the Wall Street Journal as the “most expensive property” in Washington Heights.  Last week we sent out a contract of sale. 

6) We had over 25 buyers through a new 3-bedroom listing in Morningside Heights, asking $1.625mm, with 2 offers which are being negotiated.   

Hudson River Views

 And where am I going with this?  I am happy to work in such a resilient market!  The inventory tracker I feel is most indicative, the absorption rate, has dropped from 8.1 months at the end of 2011, to 6.7 months, a drop of 18%. 

I have been writing about the need for either more inventory.  Otherwise, we will see price increases, which we are already seeing.  A particular couple I was working with in 2008 decided to sit on the sidelines, as they couldn’t find a two-bedroom in the $1.25mm range that fit their needs.  Prices on these units came down in 2009-2011, but have been coming back very quickly.  In fact, what they were looking for is priced again about the same:  2bed/2baths are hard to find below $1.25mm in good condition. 

My fear is that sellers will get overly aggressive- but I would argue that if I have but one job, it is to ensure my clients don’t overprice to the market. 

A few other final thoughts.  First, the New York Times did get it right in discussing the condo market’s current strength in this past weekend’s front page of the RE Section article.  Developers aren’t offering the discounts which we saw a year ago, and skeptical buyers (I have a few) have lost out on opportunities across the city at the lower end of the market for condominiums. 

I will always give my best advice on pricing and building quality- but that said, the new development product coming to market is of good quality. 

To the other side, sellers need to get their cooperative properties to market.  Desperately.  I’ve gone through the coop vs condo market- certainly, the condo market dipped more significantly than the coop market- and so its rise is not a surprise.  However, the properties seeing the most difficulty are those smaller units with high maintenance.

I’ll end with a plea:  Please connect me with your seller referrals.  We’ve had incredible success representing sellers this year, achieving terrific prices.  We need inventory, badly!

I know that I’m a New York City broker, but my week in Tel Aviv was eye opening, in terms of views these towers offer, the incredible amount going on in and around Tel Aviv, and the general buoyancy of the Real Estate market there.  I’ve been told by various real estate professionals, whose opinions I value, that the market there is overheated.  However, given the higher mortgage rates, the very high downpayments, and the strength and profile of high end buyers there- there seems to be far less speculation, or at least more qualified speculation.  The “Meier on Rothschild,” among many other striking towers along the water, may receive animosity from locals, but the process and change were moving to watch.

Now, back to New York City.  I was among the first brokers shown the sales office at 151 West 21st Street - First, this is the first sales office I’ve been in, apart from the One57 sales office, since 2009, which took place in an off-site location.  That is, one may be in a mock-up of a kitchen or bath, but not actually in the building. 

Closings will take place late 2013

In this case, not only was I standing in a sales office, but I really had no feeling for what the building was going to look like.  I walked the block, which is on West 21st between 6th and 7th avenues- a nice location across the street and over from a large rental building, an historic tiny cemetery, and other condominium constuction.  Essentially, the asking prices range from $1000 per square foot on lower floors, and $1250 for lower floor 2bedrooms, up to about $1300-1400 per square foot for higher floor one-bedrooms and two-bedrooms, onto $2000 per square foot for the highest floor three-bedrooms.  How is this pricing derived?  There is a huge shortage of product to purchase, to the point where the sales staff was really selling off of a floorplan.  I had to shake my head, and remind myself what year I’m in.  No, not 2007, but 2012.  Amazing!

The building bills itself as green, getting LEED certification and using elements which are really quite nice for owners.  There are air purification and water purifications elements which hermetically seal (not literally) apartments from one another, to keep smells and smoke completely enclosed.  Purified water, etc.  My verdict?  $1250/square foot for new development which one must wait 18 months for?  Seems about right.  The $2000 per square foot, though, when one can’t be sure of views?  That will likely take more time to sell. 

The finishes are nice, but simply du jour finishes.  Nothing to drop your jaw over.  I see this as speculative purchasing, for someone who takes a view past the presidential election of inflation, or a view that the Euro is going way down.  I’ve made recommendations on the lower floor 1bedrooms, but don’t see the high floors as the best options available right now.   We’ll see more as construction develops!

Live across from a park, for a decent price?

The next project which I was fortunate enough to get into- I say only half jokingly, given the challenge of finding an appointment time- was the Citizen, 124 West 23rd Street, another development in Chelsea.  While the higher floor two-bedrooms are interesting, and certainly the product will sell- the issue which I see here is that the pricing has already baked in for a stretch of west 23rd (between 6th and 7th avenues) which is still on its way up.  I happen to have a client down the street from this site, and have watched it grow.  The developer (Anbau) has done an attrractive honey-brick facade, which is both greener, and in line with what buyers seem to prefer.  I hope that the infrastructure is well done, contrary to much of what was built in 2003-2007.

But I “get it,” about the pricing.  Since the question from most buyers who are looking at new development is whether I feel this is properly priced for what it is, I should walk you through the thought process.

We seem to be in a time where developers and sellers feel emboldened to test the market aggressively.  Pricing in the $1300-1400 per square foot is not shocking anymore, nor is it limited to the most prime addresses.  So when I see 927 square foot units on low floors asking $1.25mm ($1350/square foot), I understand the pricing logic.  Resale condominiums of the last generation new condos are getting $1000-1100 per square foot without much fight from buyers- otherwise, buyers will have to settle for the mid-80′s and mid-90′s condominium, which, if renovated, may still fetch over $1000 per square foot if well-located.

With that  in mind, a developer sees $1200-1300/sf range as a bit of a discount (!), given the risks involved with beginning a development back in 2009 when the world looked like it was ending by many accounts.

Now that the world is still here, buyers bring a slightly different mindset to the table- pushing for discounts on some of the typical extra expenses of purchasing in such a building- the additional 2-3%  cost on seller taxes that are, by default, passed to the purchaser in these cases.  Hence, an asking price, and sometimes a sale price, will be in the $1300+ range.  Of course, I am writing about a baseline cost, where two-bedrooms can ask much more, and 3+ bedrooms soar in pricing.

My answer on value in these cases is based on the monthly carrying charges a building has, a strong look at amenities, the quality of finish, strength of the developer, and a sense of the future prospects of the location.  Perhaps it boils down to this question: Do I feel that a one bedroom property asking $1250/square foot today will be worth $1500-2000 per square foot in 5 years?  If larger units hitting the market now- 120 e 79th, for instance, askinng $2800-3500 per square foot, 15 CPW asking $3000-10,000 per square foot- how far down will this trickle?

I’ll end this post thinking about Harlem.  I think Harlem is amazing, personally.  The avenues are broad, the older housing is striking, many of the blocks are lined with trees and beautiful brownstones, much like chelsea, fort greene, or the Upper West Side.  Access to transportation is good as well.  That said, it’s been gentrifying for many, many years- and I have not seen enough really strong new development product to keep up with the expectations of buyers who are considering a move to the area.

Recent visits have confirmed a few things.  First, the product delivered pre-Lehman was, for the most part, very average.  Construction quality was not great- and I understand that if costs of everything but land is about equal across the city, the difficulty in justifying delivering a top-notch product- pricing remains in the $500-750 per square foot range- much closer to the lower end of the range.  The biggest draw can be lower common charges- with 15- and 25- year tax abatements.  The return on rents, however, despite the lower pricing, remains about 3-3.5%.  So harlem remains an affordable delight for the primary user, and a pioneering spirit- and until we get some more “knockout” product, I’ll remain wary- and make strong positive recommendations on a case by case basis.

Second, I’ve started to come around on the East Harlem area, carefully watching the changes in the area.

Third, anything near a hospital or university should be given extra consideration.  This includes Columbia, New York Presbyterian, and far beyond.

Lastly, a doorman remains a positive in all areas, when considering new development.  It is rare when a lack of doorman is a plus (think Tribeca or the Village).  Only when the buildings are very small do the cost savings justify the lack of that amenity.  Otherwise, attended lobby is key to an easy exit strategy (a sale in the future).

Have a great tax-time!  More to come soon.

1) A buyer who was going to combine her current apartment the the purchase of her neighbor’s apartment had no mortgage on her apartment- but wanted to take a modest (under $417,000) mortgage on the neighbor’s unit- the day before the closing, the lender asked for a letter from her coop board approving the combination before she closed.

If this sentence makes no sense, I’ll explain.

The order usually is: Sign a contract, get a loan, get board approval, close on the purchase, apply for whatever work you want to do with the coop board, get approved, do the work, end scene.  The lender eventually understood how out of order their expectations were, but not without some genuine legal threats.

2) Appraisals are taking 2-3 weeks to schedule once a contract is signed.  This delays is incredibly frustrating for buyers and sellers- since rate locks are only 60-90 days, and as we approach the time of year when boards do not meet, every buyer is trying to get his/her board package in before June/July.

3) A happy ending:  Recently we had a listing we took over from another firm, when a deal in contract fell apartment- due to the lender.  However, we discovered that the buyer could not get financing due to income, and nothing else.  When we brought a qualified buyer to contract with the seller, she was able to get a loan within 3 weeks.  So, money is available.  Go and get it!

The question is really one of getting the best rate in this environment.  If rates are hovering around 4% for fixed loans, and interest-only products are around 2.5-3%, what do you do?  Certainly, just use common sense- if you’re planning to stay for 5 years or less, be very sure of that, and take the rate with the lowest product you can find.  If you’re not sure, get a fixed product.   There are some cooperative boards who don’t allow buyers to take interest-only loans- and certainly as rates rise, it will be the rare owner who regrets having a fixed loan at these rates.

But I almost forgot to write about the cost of rentals.  Using 1-bedroom rentals in doorman buildings- if the cost of a rental is $3500 on average, and the cost of a purchase is approximately $600,000 with an $1100 maintenance- the cost of the monthly carry with an interest-only product (assuming a 5-year move) is $2700 right now, with 20% downpayment, or $3325/month in a fixed product- and this is before any tax deductions!  This will drive many, many sales over the next quarter or two, or three.  There’s too much 1-bedroom inventory still lingering, and not enough rental property, by a LONG shot.

The same argument works for bigger apartments, when rates are this low.  The three-bedroom unit which is asking $8000-10000 rent in a prime location may cost about $10,000 per month- assuming a $2mm purchase price, with 20% down, and $2500 per month in maintenance.  This again is before any tax deductions.   The moving pieces become location, how much renovation a property needs, and the monthly maintenance.

This seems like a fairly obvious comparison to make right now- I’m happy to discuss it further with anyone out there!

• Business Growth is a leading indicator of things - Generally, if things are getting better, that’s a good sign
• Attorneys and service firms begin hiring as businesses need them
• Stock Market begins to show signs of the growth in business etc
• Buyers feel confidence to make purchases
• Mortgage brokers get pulled in pretty quickly thereafter, as are RE attorneys
• Private bankers are asked to make things happen during this process
• Architects, designers, contractors, etc are pulled in once closings happen

This Could Have Been NYC's Mayor

So, depending on who I’m talking to, I try to get a sense of where they fit into this order, at least as it pertains to my business.  Are they a leading indicator?  Are they a lagging indicator?  My conversations with bankers and private equity indicate that it’s a very busy time for them.  I am hearing about business hiring from various law firms and financial services businesses, even as some job cuts are taking place.  The stock market, while perhaps due a correction, is showing more steady footing- even if some banks show bad quarterly results.  My mortgage brokers are extremely busy, as are RE attorneys.  And I’m heaing how slow things are for architects, designers, contractors.

This fits pretty squarely with my experience right now.  While some articles may be spinning a lack of massive growth in the first quarter as some stall-out of the RE market, I do not see it that way.  Closings in the first quarter would generally have gone into contract in the 4th quarter, and with the lending standards (I’ll do a separate post about this) becoming hilariously difficult, perhaps contracts were signed even during the 3rd quarter!  So, in essence, this is old news.  What I’m actually seeing in Manhattan is that the market has been slowly strengthening over the last few months, and I can give you a few indicators that it will continue to strengthen through the Spring into Summer:

• One Bedroom apartments are seeing 7-10 buyers per open house, and time on the market has dropped.  Time of the market has been an average of 123 days in 4th quarter.  My listings are seeing an average time of less than 80 days before a signed contract, including one property which had been on the market for a year prior to a bidding war.  Many of my listings have sold in the first weekend since January 2012.
• Apartment rental prices are near or at their highs.  My conversations with my buyers reveals that there are three different groups of 1-2 bedroom buyers who are affected by rents: (1) Renters who moved into the city, preferring to rent first and now buy, (2) Renters who feel “The rent is too damn high,” and (3) Long-time renters who simply don’t feel mortgage rates are ever going to be this low again.
• There are fewer than 30 new 2bed/2bath new apartment listings that are still available on the Upper West Side since March 1st, under $1.5mm.  If you’re looking under $1.25mm, the total number available is still only 40 (many with maintenance over $2250/month), and if you lower your budget to $1mm, the available number of units drops to 18.  That’s total.
• There are twelve (12) 2bed-1bath apartments on the market on the Upper West Side under $1.25mm.

We can take the same logic and pull it out over many different areas.  The main point is that demand has significantly increased, and prices, from 1-bedrooms up are seeing pricing pressure.  The buyers who thought they could do 2-bedrooms are starting to settle for smaller units again, and squeezing into smaller apartments.

So I’ll keep the wrap-up fairly short and sweet this month.  Provided the job market keeps adding jobs, which it has, and the stock market continues to show some consistency, we should see continued strength in this market.  I would argue that New York City continues to be a leading indicator of the economic rebound, but a lagging indicator when the economy sours.  It’s a good place to do business.  I will write another post about renting vs. buying and tie is to mortage rates.

Private sector employment in New York City rose by 65,200, or 2.0 percent, to 3,251,200 for the 12-month period ending February 2012.  Job growth occurred in professional and business services (+30,300), leisure and hospitality (+15,300), trade, transportation and utilities (+11,900), financial activities (+8,000).  Job losses were centered in natural resources, mining and construction (-3,300) and manufacturing (-2,300).
Historically the FIRE sector, which is comprised of finance, insurance, and real estate sectors, has been the most vital to the New York City employment. In February 2012, these sectors showed mild growth from the previous month and February 2011.
Financial activities jobs in February 2012 totaled 442,200, an increase of 1.8% from February 2011’s totals and 0.1% from last month’s total. Real estate employment totaled 107,900, 1.1% greater than February 2011 and a 0.5% increase from last month.
The hospitality and leisure sector in NYC increased employment to 339,800 jobs, an increase of almost 2% from January 2012 and a 4.7% increase from the same month last year. This sector has performed particularly well despite the recession due to New York’s appeal as a tourist destination and the addition of new hotels to the market.
The February data also showed that 101,600 people were employed in natural resources, mining and construction in NYC during the month.  This was a decrease of 0.8% from last month and a 3.1% decline from February 2011.

–

My feedback- construction slightly down is just the tiny lull as things begin picking up in earnest this summer- tons of construction is expected.  Thrilled to see hiring continuing- there will more and more of this.

No new developments to share.  Well, almost no new Manhattan properties to show.  There are a number of holes in the ground, properties which will be online very soon, including 150 East 72nd Street, a 22-unit pre-war condo conversion comprised solely of 3 bedroom and 5-bedroom units.  I found out today that they will be asking between $2800 per square foot and $3500 per square foot.  Macklowe is doing the development.  I will be in there as soon as I can, which will be in about 45-60 days’ time.  The Toll Brothers’ Touraine on 65th and 3rd sold out in almost no time, a similarly small and well-appointed new construction, nearly topped out and getting finished.  It’s striking how fast these sell.

So my questions, which I’ll try to answer are:  Who is buying new development?  Who is buying condominium in general?  Foreign Buyers?  New Yorkers?

The myth is hard to separate from the reality, or is it the other way around?  As I’ve seen the market movement lately, I’ve seen way too many New Yorkers buying new development and condo that I cannot conclude that it’s one group or the other.  I think that the New Yorkers are going to really kick the condo market into overdrive, and what will drive the big apartment purchases, largely.

When I was working on new development pre-crash (2006-2008), I met with those you might call “Captains of Industry.”  Americans who have built great businesses in all sectors, who enjoy New York City for all it offers, whose business, actually, have survived and thrived until today.  I firmly believe, and I’ve heard from sales offices, that these buyers are snapping up very, very expensive units at buildings such as One 57, which I wrote about last month.

Our Captains of Industry of Yesteryear

Yes, we have foreign buyers who want new development.  It affords them the ability to either move right in while doing no work, or find a tenant instantly with no down time.  For a buyer who has enough difficulty simply navigating the purchase process, no need to go through the craziness of renovation.  So you have foreign buyers who don’t want to purchase something that’s been lived in before, buyers who believe there’s more value in the brand-new, buyer who don’t want to contend with anything related to disclosure of assets, or buyers who want everything that’s available in the new development that is rare in other apartments.  Amenities such as an amazing gym, high ceilings, cutting-edge appliances, the best in new design, etc.

But it is definitely not just foreign buyers who want this.  It is busy professionals, New Yorkers, who also want what recent new developments have to offer.  Location, amenities, and absolutely stunning finishes.

At least for properties showing larger units, I would argue that that it is the exception, not the rule, to see properties that are built now that are done poorly in the same way that we saw poor quality in new development product pre-2008.

I’m only talking about Manhattan not talking about Brooklyn, by the way, and furthermore I’m not going to engage in the snarky discussions that you can choose to read about on Curbed or Brownstoner.

Recently, I had a long discussion about Long Island development in the 40′s, 50′s and 60′s.  Part of its attraction was the brand-new.  For these newly wealthy, an entire  generation of wealthy who grew up from nothing, being able to choose finishes, being able to have something customized to your needs, hard-working professionals who wanted to buy something that’s never been touched by anyone else- sound familiar?  I would argue that the buyer profile in the city isn’t entirely overlapping in the strictest sense, but I do think that brand new, in the context of the high cost of B-grade workmanship, has major appeal.

In the city sometimes that becomes expressed by people buying fully renovated apartments, resale units.  Generally, when a seller wants to get top dollar they will renovate from top to bottom before they sell.  It’s not always possible to do that and some apartments have definitely seen their share of tough times selling unrenovated two-bedroom apartments and smaller.

That said, with three-bedrooms and large units, while I still believe that renovated units get the best price, buyers will more often have the stomach for more renovation as a general rule.   But looking on the macro level on the level, zooming out if you will, many unrenovated apartments still take quite long time to sell.

Where am I going with this?  For investors, get in now.  Prices are going to move up.  I’m simply seeing the base price for condominium going up.  For instance, there is almost no good reasonably priced condominium on the east side of Manhattan under $700,000, which is absolutely amazing to me!  This article from today touches on what I’m seeing out there right now.

For a foreign investor, I don’t believe that I would even discuss apartments under $1 million since I don’t think that it is a reasonable expectation to set that if someone has a half $1 million to spend on condominium product in prime Manhattan that they’re going to find it.  They’ll need to wait, which is probably a bad idea, or consider something that needs work.

Which leads me to a discussion of new development, where it is, when is it going to come online and is the appetite for it here?

My answer is: ABSOLUTELY.  If people are patient they are going to see some significant product, much needed product, roll out to market-  but not until 2013/2014, and what comes out will be beautifully done, likely at astronomical prices.  This article in Crain’s touches on the pickup in housing permits- but still doesn’t touch what became a glut of inventory in 2009-2010.

If someone needs new development now or wants and condominium now, they’re going to pay significant prices.  Prime condominium is trading higher and higher dollar per square foot numbers properties.  But probably not as high as it will be in 2-3 years.

Condominium properties that have been sitting on the market for a while in parts of Manhattan such as Chelsea, with already low inventory,  are all of a sudden trading with bidding wars.  I have seen it with my own listings and I’ve seen with others.  For now the new development in the condominium market which was pretty beat up over the last couple of years is seeing a massive resurgence
over the last 12 months and finally prime buyers are coming out of the woodwork to join the party.

Local all-cash buyers and those with significant liquid assets are still purchasing co-ops but condominium holds significant attraction and lenders are happy to lend on all, given normal downpayment levels.

Essentially, the real estate market has been ebbing and flowing with with the stock market, and the market seems to be rebounding at a time when there is little to sell, giving extra oomph to our Spring market.  European money seems to be flowing out into US real estate as a safe haven (read today’s discussion of country bond defaults in the WSJ).   France may very well drive all of its wealthy people out due to the potential of a new president in that country and higher taxes.  And despite some of the positive news coming out of Europe, the vast majority of it is simply scary.

New York City Real Estate is looking very well-positioned to have a good Spring, and a good year.

Tell Us All About It

The turnover/sales volume  has continually improved over the last two years, but my optimism has been tempered by world events, stock market conditions, poor news out of Washington, Europe, and the media. 

All that said, there seems to be change in the air.  Many buyers and brokers expected a significant pickup in inventory across the market in the new year.  We are all still waiting for it.  And contrary to expectations, we are seeing a trickle, not anything resembling the deluge people expected.  If any seller shares my view, he or she will very carefully consider timing to bringing their unit to market. 

Those sellers who bought in 2004-2008 are hoping to break even.  Many have succeeded, if their home is on the $5mm plus segment of the market.  Those who have owned for 10-plus years and want to sell will be very happy with the result even now. 

Condominiums have started to pick up  – I’ll cover this is a separate post.  But with the limited inventory available on the market right now, it is inevitable that those buyers who must buy are competing in a frenzy. 

There are almost no two-bedrooms on the market along Riverside Drive.  For that matter, there are incredibly few three- and four- bedrooms available whatsoever across the entire West Side.  Do you hear me, sellers? 

Massive competition for great properties and high demand for buyers of all stripes:  Practical Buyers, Pied-a-terre buyers, and Empty Nesters- people looking for many different types of situations.

The reality may very well be a return to the what happened to many two-bedroom buyers pre-2008.  The last three years has seen opportunity to lock into two-bedrooms, and those buyers looking in the $700,000-$900,000 range may have to settle for large one-bedrooms rather than two-bedrooms, properties that can accommodate them for a period of around five years or so. 

That situation is not ideal for many.  The rental market does not look any more attractive.  I’ve been talking about a pick up and one-bedroom sales for some time and apart from condominium sales I still haven’t seen it pick up significantly.  But with the utter lack of inventory on the two bedroom side, something has to give.  Either prices will go up really start to push up on  two bedrooms or sales on one-bedrooms are to pick up.  We will likely see a combination of both.  I’ll cover condos in my new development post.