Welcome to the latest Apartment Practical.
When I named this report and blog last year (Apartment Practical and The Practical Home), little did I know that being practical would shoot so quickly back into vogue.
Saving money, doing things yourself, being proactive in the marketplace to maintain a luxury mentality without spending like it- all of these things seem so obvious now.
I am proud that these sentiments might be more popular these days and that I can help you put them into practice.
However, we at Apartment Practical wish that the economy had not given us so many dire reasons to think so practically. The email newsletter form continues its condensed/expanded versions, allowing you to click through to our blog, The Practical Home, if you want to read on or read other entries.
Your feedback is welcome and encouraged.
How’s the Market– Buyers are bargain hunting and sellers getting in touch with the market
Mortgages and Money- Why mortgages are harder to get, and why the stimulus might help
Renovations and Design– Who’s doing renovations? Self makeovers or apartment makeovers?
Home Technology– Vudu, AppleTV, Boxee and the like
DIY (do-it-yourself)– Add space by installing custom closets
how’s the market?
Short of hiding in a cave, you
are probably aware that
the bloom is off the rose- that is, the Manhattan Real Estate market is in major flux.
While our 4th quarter report tells part of the story, it does not give the full picture of the marketplace right now.
There are more pessimistic reports, doomsday-type scenarios, but
everyone agrees that there are many moving parts keeping sales volume down, even with willing buyers:
- Buyers think there will be a rising number of listings. While we are seeing apartments take longer to sell, and new listings add to inventory, we are not even close to the inventory levels of the early 1990’s. We think that inventory will continue to rise, just not to those levels.
- Many sellers are in denial of a new market normal. We advise our sellers thinking of selling to take recently sold property prices and adjust the sales price down before it hits the market. This is the wisest and most effective strategy. More now than ever, listings that sit on the market, and slowly adjust prices downward, begin to appear to be damaged goods.
- Buyers think that the job losses on Wall Street may impact a slew of properties that are not on the market yet. This informs buyers whoare looking for firesale prices from sellers in dire straits. Many buyers are forcing themselves to wait and see how many additional apartments are coming on the market, and expect lower prices in the near term.
Our job as brokers is to bring about a “meeting of the minds,”
which, in theory, would encourage our being as honest as possible with buyers and sellers we work with.
Working with what we know, which is that we are in a buyers’ market, we must create an atmosphere of friendly and honest negotiation and are seeing
what are ultimately lower sales prices than what we saw last year and in 2007.
Media pieces in Curbed.com or the New York Times range from snarky titled such as “Price Chopping“
or the more euphemistic “Buy of the Week,” as if someone is shopping for apartments at the grocery store!
Readers love these pieces, and the requisite feeling of schadenfreude that accompanies reading them.
That being said, the prices surrounding these good deals becomes less and less uncommon.
Lastly, I want to touch on the rental market.
Many would term New York City as one of the few viable rental markets in America.
75% of our city are renters, and we are seeing tremendous bargains out in the marketplace for rental units.
Whether this will continue into the Spring is unknown, but for now, this situation is certainly impacting people’s decision making about buying vs renting.
Many would argue that until renting becomes more equivalent in monthly cost to buying, that people would continue to rent.
I would add the following reality-
Many people continue to wait to time the “bottom,”
but I get the sense that at some point, people will simply want what they want, and the wheels will start to move again.
This may happen due to current fiscal stimulus being debated in Washington, or just New Yorkers being New Yorkers.
That remains to be seen.
mortgages and money
Rates for Loans over $1Million (Jumbo Mortgages) often right now over 7% depending on the bank.
Banks are making cooperative and condominium loans over $625,000.00 expensive
Banks are demanding at least 20% down for all mortgages, and 25-30% is typical now.
Mortgage brokers are shut out of some large banks, such as Chase.
There is much less of
a secondary market, so banks are reluctant to originate mortgages.
It’s not all bad news.
As I write this, Congress and the Senate could very well put into place legislation to get mortgage rates to 4.5% for buyers.
This may not help Jumbo mortgages, but we’ll have to see.
That being said, there may be a $15,000 “tax credit” for primary home buyers, which is something- even for expensive home purchases- it’s more of an interest-free loan, since (depending on the final legislation) you may have to pay it back $500/year.
At the end of the day, we may have to see lending unfreeze on Jumbo loans to get things moving again here in Manhattan.
Buyers are willing to pay 20% + for cooperatives, but condo buyers or first time buyers may have trouble with stringent lending requirements- impacting condo purchases and smaller apartment purchases.
renovations and design
Home Depot is shuttering is Expo stores.
Editorials are blaming HGTV for the economic meltown.
What is the world coming to?
Apartment Practical was asked to write a column for suddenly defunct online site for Young Professionals.
What a shame!
I wrote a column which I thought might be fun for those looking to maximize space in a small apartment, be it a rental or purchase.
Read the entire article here.
While we’re still figuring out this technology ourselves, we have good news for you:
The computer has finally, really, started to “play nice” with your TV.
The bad news:
You are going to have to figure out how to connect them.
This month Apartment Practical is interested (and a little scared, too) about the new and exciting world of streaming TV and movies from your computer to your TV- In HD quality!!
Thus far, Apple TV seems like the no-brainer choice, since it can help you play your entire computer music and movie collection on your Television.
However, the ever elusive watching live computer on your television is not optional (though the interface is super-easy and very graphic-intensive- fun for everyone)- and you can rent HDTV movies through even Time Warner Cable.
Next, the first DVR to be popular, TiVo, offers the ability to stream movies in HDTV, provided you have a subscription to Netflix.
However, if you have an Xbox, Netflix works with it as well.
Check it out here.
The big WOW factor happens as you step up your Home Technology know-how ability.
DIY (do it yourself)
When people stay put in their apartments, they want to maximize space.
Now may be the time to redo your closets.
Apartment Practical has found that the closets that you get from a California Closets company or Closet Contractor are identical to the closets you can buy and install on your own from companies like Easy Closets.
As I’m told, ease of installation largely depends on the smoothness of the walls in your closets.
If the walls are plumb, the bar you install will go into the wall easily.
Otherwise, it may take a few tries.
That being said, even if you have your superintendent help you measure and install the closets, it is worth the effort of looking at prices online before enlisting a “closet specialist.”
Speaking from experience, when my super had to remove my custom coat closet shelving 3 times to deal with a building issue, these items come in and out of the closet very quickly!
See you soon, and keep checking back for new posts.