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Saturday, January 24, 2009

Real estate bloging goes mainstream

"...blogs devoted to the industry still have plenty to say.
These days their tone is often more serious than snarky"
SAMANTHA STOREY, NEW YORK TIMES

blogs I was delighted to pick up the New York Times this morning to find that they had finally run a cover story on blogging in the weekly real estate section. Samantha Storey's And the Blog Goes On serves as a primer on the local scene and profiles Curbed, Matrix, Brownstoner, True Gotham, UrbanDigs and PropertyGrunt. No doubt feeling the pinch in readership and advertising dollars themselves, the NY Times was quick to point out that, "For some blogs, the real estate slowdown has led to a leveling off in readership.", and noted that that brokerages had started shifting advertising resources to local blogs as a way of controlling costs and getting targeted Web based exposure. Curbed's founder Lockhart Steele is quoted in the story saying that “Traffic on Curbed has been flat”, while Noah Rosenblatt over at UrbanDigs posted his impressive growth in traffic numbers today. It's good to see the most authoritative big media outlet recognizing a NYC blogging community that has been serving an interested and engaged readership— focused on the New York market in ways that are unique, timely, informative, opinionated and personal. Congrats on the ink guys!

Wednesday, January 21, 2009

podcast: Economists to Obama; Get the Government out of the Banking Business

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From our friends at Wharton comes this interview with professor Richard Herring who serves as a co-chair on the Shadow Financial Regulatory Committee, a group of economists, former regulators and lawyers. It contains astute observations about the problems with transparency among the financial institutions that have failed, had shotgun marriages, or are teetering on the brink.


bankseconomyOn the eve of Barack Obama's inauguration as president of the United States, Wharton finance professor Richard J. Herring discussed some of the advice offered to the new chief executive by the Shadow Financial Regulatory Committee. In an open letter (pdf) to Barack Obama, the committee suggested that the government should quickly extract itself from the investments it made to rescue the financial system and devise a new regulatory framework for preventing future crises. He also assessed the deepening woes at Citigroup.

"Morgan Stanley...was trying to sell itself to a bankrupt institution two weeks before it went under— which suggests that we really do not have sufficient disclosure"
RICHARD HERRING, WHARTON SCHOOL

continued+

Wednesday, January 7, 2009

Fourth Quarter 2008 Manhattan Real Estate Market Report

click cover to download
download the latest corcoran report on the Manhattan real estate marketcorcoran reportI'll be posting some excerpts from the Fourth Quarter 2008 Corcoran Report soon, but you can download the complete report as a PDF right now. It's a look at the current state of the Manhattan residential real estate market. This report compares data based on deals that closed in 4Q 2008 (October 1 through December 31) with that of 4Q 2007. The Corcoran Report provides information based on median sale prices (the price halfway between the highest and lowest sale prices), and average price per square foot (the value of a specific unit of space), as well as a variety of other metrics. It was produced in collaboration with PropertyShark.com.

Here's the executive overview: In light of the current recession and the credit crisis, Manhattan’s residential real estate market has entered its most tentative period in recent memory. The Fourth Quarter experienced markedly fewer closings as buyers found financing difficult to obtain; forty percent fewer properties sold in the Fourth Quarter of 2008 than closed in the same quarter a year before. The absence of liquidity has compelled sellers to lower their prices and this quarter’s report reflects the start of that trend in the resale market, where the median sale price dipped by 4%. Sales in new developments— most signed between twelve and eighteen months ago, continue to post strong sales figures, although the pipeline of prominent luxury properties in this category is slowing. To better illustrate their uniqueness and because of the disparity in their schedules from contract execution to closing, the Corcoran Report looks at the re-sale and new development categories separately.

If you have questions please feel free to leave a comment below, email, or call.

fourth quarter 2008 Corcoran Report »

Tuesday, January 6, 2009

Reasons to buy an apartment in Manhattan in 2009

buying a manahattan co-op or condoEvery marketplace offers opportunities for someone. People have been taking a wait and see attitude with their investing and spending since September, so it will come as no surprise that with it, New York real estate has experienced a slowdown in the last quarter of 2008 too. It will contribute to a very different marketplace than we've seen in several years.

buying manhattan luxury real estate in 2009Whether it is the right time to buy or sell a home is not solely based on the temperature of the market. It is more likely motivated by an individual's circumstances and should be considered in terms of the impact of the move in five years, not five months from now— real estate is the textbook example of illiquid, long term value. Manhattan apartments are still trading, at the right price, and with the right marketing. Chances are greater that it it will be at a slightly lower price than it might have been at the beginning of 2008. For most sellers it's a paper loss and they will still realize a very healthy margin of profit from their homes after experiencing the sharpest rise of values in history. It may be counter intuitive to buy in uncertain times, but if 2009 is the year where the market catches its breath, it is also where buyers seeking value are able to get what they seek. Here are five reasons why:

Mortgage interest rates have dropped dramatically
In December, Fed Charman Ben Bernake announced that they would purchase mortgage bonds and possibly Treasury bonds in an effort to stabilize the markets. The effect was that mortgage rates fell to their lowest levels in 40 years. According to Debra Shultz at Manhattan Mortgage, rates today for a 30 year fixed conforming mortgage (up to $417K) is 5.25%; and the rate for a 30 year "high balance" mortgage (up to $625K) at 5.5%. Jumbo 30 year fixed mortgages (over $625K) are at 5.875%. These rates are just about a full point lower than they were a year ago, making properties more affordable. You can use a mortgage calculator like this one to help estimate the effect on your purchase.

There is talk of rates dropping further. Chances are that the incoming Obama administration will do what they can to stimulate the economy and the housing market, by helping to keep mortgages low. It will help people to refinance existing loans, making their homes more affordable, and increasing their disposable income. It should stimulate home buying as well. Exactly how they might do that remains to be seen.

There is finally a good selection of apartments to choose from
Manhattan has traditionally had highly restricted housing supply. A few years ago the most common complaint was that very little was available in any particular neighborhood/size/price, and what was available was snatched up quickly; often with multiple bids. That's changed and buyers are in a much better position to find the apartment and features that they want. They feel less pressure and have more control in the deals. One caveat, the good stuff, that's well priced, will still go pretty quickly. So look and make offers, but chances are that if you perceive value, others will too.
Coops and resale properties are where the value is
I'm a resale agent and that is where the value will be in this market. Sellers that have built equity over time are in the best position to strike a deal. If relocating to the suburbs, they will find a market that has likely corrected more than Manhattan has. If staying in town, they will be reinvested in the same marketplace in which they are selling. Compared with sponsor sales, resale properties in condos that were developed just a few years ago will often trade for a bit less. They may be gently used, but offer many of the same features and style as their more recently developed cousins.
New developments may be willing to offer incentives to buyers
Developers have been creating top quality housing in Manhattan for several years, but the credit crisis, which began for them in October of 2007, has effectively all but halted that building boom. The pipeline has dried up, and when the new product has been absorbed, there will be little new stuff following for while. I've heard experts put the total available housing stock in Manhattan, including resales, at about 9.5 months of inventory. That would be as opposed to two or three years worth in more severely correcting areas of the country. Buyers have a short lived opportunity now to negotiate on their choice of new developments. Sponsors have been driving a pretty hard bargain in the recent past. They have been able to not only charge premium pricing for their product, but also have asked customers to pick up sponsor closing costs and their transfer taxes— traditionally seller's expenses. Competition for customers has gotten stiffer, as they not only compete with other new developments, but with recently developed units coming onto the resale market too. Competition in this way is good for buyers. Some sponsors are advertising that they will now pick up closing costs. Other incentives may be negotiated too at some developments, whether explicitly stated or not. Everyone wants to make a deal.
Strong buyers— those with all-cash or substantial down payments, have an advantage
The quality of buyers is more important than ever to a seller. In a market where mortgage contingencies have become common again, credit underwriting requirements are stricter, and loan to value ratios are being scrutinized more carefully, those with substantial down payments, or who do not require financing, will find they have greater leverage in negotiating.
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