Over the last year or so, the top end of the market has outperformed the rest of the lower segments.
This seems to be continuing to a degree, but the rest of the market is catching up,
performing admirably as well.
If Marie Antoinette said
“Let Them Eat Cake”- and we
take that attitude as we
look down from the top end of the market, one could argue that everyone is eating cake, and not just crumbs.
The job numbers in New York have been favorable with real job creation, and from one bedrooms and larger, we are seeing significant action.
Here’s a snapshot of my week as an illustration:
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
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
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
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.
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.
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.
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!