Even with clothing, this seems to be a more and more popular option with the advent of Rent the Runway.
Renting can be a disruptive business model for the status quo, even in businesses that have been rentals for years- a la Zipcar etc.
As a resident New Yorker, I definitely get to enjoy some of these ideas as they incubate.
Of course, apartment renting has always been a major component of the market here, more than in most cities.
Which segues me back to my monthly thoughts.
let me indulge you with a moment of reflection on the year.
The Harris Residential Team was launched at Brown Harris Stevens.
We have grown to a team of five, able to work with buyers and sellers from A to Z on the marketing and sales of apartments and townhouses, in Brooklyn
I am proud of the work that we’ve done for our clients, both on the buying and selling side.
To those of you who have hired us to represent you,
We look forward to
friends, family and colleagues on residential transactions of
Over ten years, I have built the business almost entirely on word of mouth.
This blog, our soon-to-be improved web presence, our Facebook and LinkedIn presence, alongside my daily thoughts on Twitter (please follow @HarrisResiTeam) give you insight into the facets of the business which I manage.
Thank you so, so, so much.
Here’s to another decade of hard work and success.
Let’s split this into condo and coop.
Most of these development buyers are foreigners, who are buying for investment.
Returns on these properties as rental investments range from 3% to perhaps as high as 5%.
There may be a resale condominium here or there with a return either lower or higher than these numbers, but with an all cash purchase, this is a pretty typical band.
Avoiding the time and cost of renovating seems to be a driver, along with the appeal of the brand new.
I’ve covered some of this ground in recent months (see link), so I won’t go over again.
However, let’s say that brisk describes well-priced condominium.
I don’t to appear glib, saying that all of the market is driven by foreign buyers. Sure, there are some local buyers buying condo, but those buyers taking a long view on
investment-ready residential Real Estate appears to be non-American largely.
Two-, Three-bedroom and larger apartments are selling as they come on the market, provided that they are within 5% of their proper pricing.
Sellers seem to be keeping reality in view, and keeping pricing reasonable- for the time being.
However, one-bedrooms continue to sell slowly, even in the most active parts of the city.
The exceptions are
the must-have buildings, the view-apartments, the trophy 1-bedrooms- those are selling, if in mint condition.
Anything that is an off-location, units East of 2nd avenue, really seem to have trouble selling right now.
Too much inventory.
Then for one-bedrooms it becomes a function of price and condition.
is the logic?
Purchases of one-bedrooms with these mortgage rates can definitely be less expensive than rentals.
What are the other factors?
Coming on the heels of a recession.
Lots of tinidity.
Financial industry thinkers and pessimism about the short-term stock market future.
The end of November numbers in the Heym Report were
not terrible, 43,000 jobs added through October of this year.
speaking about the strength of the rental market, who is out there looking past this and thinking about the tipping point between rent vs buy?
Should you be a contrarian?
If rentals are so strong, where are all of these jobs to support it?
Is nearly every former-one-bedroom buyer simply socking away money and renting?
Downtown Brooklyn comes to mind.
Thousands of rental units being built.
We are seeing condos reverting to rentals because the pro forma works, even when the new development market is
Related Companies is betting on rentals
in this article today.
Williamsburg stalled out condos are “Rushing to the rental market?”
converted to condominium, so there is room for inventory to be absorbed into the rental market etc. – but I’m wondering what the headwinds are that new rental development faces.
I don’t think the rental market can have it both ways.
Has New York City become such a destination that segments such as the
rental development market can sustain such high prices forever?
Aren’t we having with these rhetorical questions?
This rental cycle will not last forever.
But in the meantime, on the sales side there will likely be
a growing gap in pricing from 1- to 2-bedroom apartments,
and that gap will likely keep moving in that direction throughout the year.
prices dip to about $600-650 per square foot-
I’m using this as a rule of thumb for these small run-of-the-mill units on the East Side.
When that will happen is hard to say- I’m guessing it will time along with the election next year.
consists mostly of need buying in the $600k-3mm range, including bidding wars across New York City and Brooklyn.
I just heard a story of a 2-bedroom open house last Sunday with 110 buyers coming through.
There is low, low inventory for 2-bedrooms under $750,000 in Prime Brooklyn (in which we specialize).
continues to be
some interesting fallout from the downturn.
I know a buyer who lost a very large property in foreclosure- but typically these are overleveraged speculators, not primary homeowners.
I love this article that speaks about foreclosures- there are so few foreclosures in Manhattan.
When 16 foreclosures makes news, you know there isn’t a real problem.
Any investors looking for short-sales here are going to have to find that needle in the haystack on their own.
Hunting for unicorns, largely.
Let’s catch up in the New Year!!