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the archives
April 2008
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April 28, 2008

Its a real estate market!

Faced with only 24 hours in the day, I've been focusing on my core brokerage business and blogging a bit more lightly recently. I expect that the pace of posts will pick up again moving forward. I'm a real estate broker who blogs, not a blogger interested in real estate. Let's dive right in with today's report on the fickle first quarter of 2008. —Peter

download the Manahattan Q1 2008 corcoran reportdownload the complete Q1.2008 corcoran report
The Manhattan market has been interesting recently. It is hard to characterize it as either a buyer's market, or a seller's market. Its just a real estate market, and a more balanced one than in the last few years. corcoran reportPeople are considering their purchases carefully. We are seeing more offers starting below asking prices, yet well priced apartments are selling briskly, even with multiple offers. There is substantial buyer demand out there, but it's being tempered for the moment by uncertainty in the economy.

Customers are acting more cautiously since the Bear Sterns buyout last month. Whether the hesitation is justified depends on if you feel the fundamentals have actually eroded or not. How much damage to the global economy was caused by the sub-prime crisis is a matter of continuing debate. I've heard it described by some industry leaders as if you had a choice of 10 bottles of water to drink, but you knew that one was poisoned — you wouldn't drink any. The whole thing needs to unwind. However let me point out that the availability of credit for residential purchases has not been affected as much. Most people willing to put 20% down (less in some cases) and who have good credit ratings are still able to get mortgages at historically low rates. It's just a real estate market.

Additionally, developers now faced with putting more equity into their deals may put some of their plans on hold, restricting supply in the construction pipeline, and setting the stage for lower inventory a couple of years out. The available inventory of apartments in Q1 2008 rose to about 6% higher than in Q1 2007, mostly during the second half of the year as economic uncertainty began to cause some people to "wait and see". The number of apartments available to buyers in Manhattan bounced around 9000 units, but is trending higher, with more new developments coming online, and a buyers taking longer to decide.

The good news is that for buyers, this hesitation may have created the best opportunity to buy Manhattan real estate in the past 10 years, unless you feel that long term, New York City is spiraling downward into an abyss (a point of view that I haven't come across very much). There is a good selection of apartments available, and an environment more receptive to negotiating. No one is giving anything away, but fair deals are being struck every day.

mixed messages: what do the numbers say?

The hesitation has not translated into lower prices. The corcoran report showed that first quarter sales figures from 2008 looked pretty decent overall, but also showed that the number of co-op transactions has dropped 22% compared with a year earlier. Condo closings rose by 36%, and 60% of the condos were in new developments which have a greater lag time to being reported since they go usually go into contract during pre-construction, often many months before closing. They therefore don't actually reflect the current market activity as well as co-op transactions do.

click chart to enlarge

People still seem genuinely interested in real estate. 'New York Luxury Living' was an event hosted recently by the New York Observer at the Puck Building, which featured 40 new developments in a trade show style showcase. My agent friends were overwhelmed by the public response: 2,256 people paid ten bucks a head, to walk into a bazaar of developer's sales teams, hawking their products. That's way more than the expected attendance; "sorry we ran out of brochures", was the catch-phrase of the day. Newly developed condo sales accounted for a disproportionate amount of sales activity in the first quarter. This is sexy new product, with slick presentation. Could it be that older co-ops may need to consider doing that long put off lobby renovation or other upgrades, to help keep up with the market and hold value? Open houses for correctly priced properties under a million are busy, as are any where the perception of value exists. We price properties based on good research as to what has actually sold and closed, which always fare better than those based on competitive properties in this market. The marketing and sales management has to really kick in now, more than ever. It takes more than a few postcards and a web site to deliver results. Differentiating your home by graphic design, staging, a record of obtaining publicity, and an outstanding luxury broker network creates a more compelling proposition to help our clients achieve their goals.

I'll be focusing on sales in the downtown market in an upcoming post.

» download the complete Q1.2008 corcoran report

January 2, 2008

Capital gains exemptions on a primary home sale

Happy New Year! Please welcome Barbara Corcoran today, answering questions about avoiding capital gains on the sale of a home and more, in an excerpt from 'Ask Barbara' in the New York Daily News.

Barbara CorcoranQ&AQ. My wife and I are selling our home and relocating to another area. Can we roll the money over into the next house without paying capital gains?

A. Get a load of this: I checked with tax expert Robert Hoberman of Hoberman, Miller, Goldstein & Lesser, P.C. in New York City. He advised that if you own the home jointly and you’ve lived there for two of the past five years, you can exclude up to $500,000 of your gain when you sell (for singles, the exclusion is $250,000) and you don’t have to roll the money into another house to enjoy the tax benefit.

continued »

December 20, 2007

Manhattan real estate continues to defy gravity

"co-ops, condominiums and town houses are flying off the shelves in brokerage firms across the city"
JOSH BARBANEL, NEW YORK TIMES

market trendsAfter looking at The London property echo last week, we've landed back in Manhattan today and looking at another reverberation in the echo of these vigorous real estate markets. Josh Barbanel wrote in the New York Times about the most recent indication that the Manhattan marketplace is still alive and well in a piece simply titled Manhattan Market Remains Stable. He writes, "Last month, the number of closed sales just about matched the number closed in November 2006, and prices were considerably higher, but roughly flat compared with the prices in the previous quarter, according to a review of sales records filed with the city." That sounds about right to what I'm experiencing and hearing from my colleagues. There has been a fairly consistent number of deals being made and inventory in any particular property size is pretty slim in any one neighborhood, causing a modest, but equally steady rise in prices.

how to price a home right now
Sellers who really want to shoot themselves in the foot, can do so by simply ignoring the most recent comparable property sales and overreaching for the the highest, most unrealistic pricing advertised by a competing property. Asking prices are almost irrelevant in this market. Recently sold and closed data are the most important measurements. I heard recently about an agent who received 30 bids on a Greenwich Village co-op apartment which was under priced to attract a number of qualified candidates to pass some stringent Co-op Board requirements. The perception was that a "deal" existed. The property was quickly bid up to its true market value. In this more price sensitive market, the mindset that says price higher because you can only negotiate downward, is destined to do so. Using attractive pricing to stand out from the crowd, will still get an enthusiastic response if the home is exposed widely. The buyers are out there, waiting and wondering where it is all going, give them a reason to come see your property, and try to buy it.

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September 24, 2007

Ask Barbara

Today we welcome a Q&A from special guest and real estate diva extraordinaire Barbara Corcoran from her column 'Ask Barbara" in the New York Daily News.

Barbara CorcoranQ&AQ. I'm about to buy my first apartment in New York, but how can I tell if a seller's asking price is too high?

A. Asking prices don't have a damn thing to do with sales price, since sellers can ask whatever they want.

It's the buyers who determine the sale prices, based on what they're willing to pay. Often, the asking price merely reflects an oversize ego or a number the seller needs to buy the next house. Well, that nonsense is their problem. The only thing you need to know is what the house is really worth in the open market, and that requires a little reconnaissance work.

continued »

August 28, 2007

How are disclosures different for co-ops and condos?

Q&AIn Manhattan about 80% of the owned residential housing market is co-op. Condominiums are probably less than 20%, with townhomes as a small group of select, boutique properties. Purchasing any of them involves some sort of application process. It can be as simple as a request for information between principals in a townhouse transaction, to a full financial disclosure, co-op board package; with a rigorous process requiring an interview with a Board of Directors.

"I've noticed some condominiums now asking for more elaborate applications on resales"

It's a practical requirement for any serious offer on co-op apartment to have pretty complete financial disclosure upfront, before going to contract with a customary 10% deposit. Before the end of the board approval process you will have backed up your statement with documentation and letters of recomendation anyway, or risk a board turndown. The REBNY standard financial disclosure statement (pdf 188kb) will give you an outline of the kinds of information that sellers and co-op boards need to know. Sellers who already have been through the process will appreciate a professional level presentation for it.

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July 5, 2007

Making lemonade at 9 West 19th Street

Now available for download is a complete web brochure for this outstanding property. In a related story, this was a classic case of bad timing for my client, as we were preparing to go to market with 9 West 19h Street, the owners of the adjacent property put up a scaffold; unfortunately obscuring part of the facade of our building for sale. It posed new physical challenges as to how best market the property.

continued »

May 31, 2007

Barbara Corcoran on staging your home for sale

We welcome The Cocoran Group founder, Barbara Corcoran, to the center column here via youtube, to see her recent three part series about preparing your home for sale. They cover several different locations, including one in NYC, but the principles of home staging remain the largely the same for houses and apartments. These videos are full of great tips for selling your home.

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May 29, 2007

Ranked as a top producer for the third straight quarter

I noticed a sign in the window at my barber shop on last Friday which read, "I don't make my business, my customers do". It's simple, but meaningful business wisdom. Earlier in the week, I'd received a letter from Bruce Zipf, CEO of NRT that cited my sales performance in the top 1.6% of the company for the third straight quarter in a row.

continued »

February 18, 2007

The psychology of pricing & achieving critical mass

The New York Times Real Estate section's cover this week is on 'The Psychology of Pricing'. It follows on the heals of last week's cover about presenting properties for sale on the Web titled 'Making Evey Pixel Count', they are both must reads for buyer's and sellers. The pricing article is a particularly accurate assessment of many factors and influences, which might affect how to market a home. Permit me to use it as a jumping point to add some greater depth about how the psychology of pricing connects with the timing of the best opportunity to sell a home.

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