Housing market

It's been three years since the Athena Group purchased the lot at 111 Central Park North, occupied then by a low-slung brick building that housed a hair salon and a parking lot.

In the ensuing years, the development company built a glossy condominium tower, outfitting its 88 units with marble countertops, Viking ranges and dramatic views of the Manhattan skyline and Central Park. Jill Sloane, an executive vice president at Halstead Property, broke a Harlem sales record when she helped sell a 4,000-square-foot penthouse for $8 million. And brokers, marketers, journalists, buyers and Harlem residents tested out a new label along the way: Central Park North.  read more »

The Manhattan zip code with the greatest number of home sales of at least $5 million this year has been 10023 on the Upper West Side. (Research site PropertyShark mined the data based on closed deals through Oct. 17.) No surprise, since the area includes 15 Central Park West and the Time Warner Center.

But even without the $5 million-and-up transactions from these ultra-luxury condos – 102 this year! – there have been at least 33 condo, co-op and other single-residential sales that have broken that barrier in 10023.

Herewith, the 16 addresses that gave us the biggest deals in the zip code.  read more »

Home prices in London's swankiest neighborhoods are dropping faster than in the rest of Britain, according to the Wall Street Journal. The reason? You guessed it: the financial crisis. The sorts of buyers who buoy these neighborhoods are losing their jobs or are facing other economic uncertainties.

While average U.K. home prices began to slide in October 2007, prime London property was still holding up at the end of the first quarter. Since then, it has been playing catch-up, and with a vengeance. According to an index compiled for Jones Lang LaSalle, a property-services and investment-management company, the price of residential space per square meter in the capital's most upmarket locations fell 12% during the third quarter, more than twice the rate of decline in London's less glitzy neighborhoods. During the first nine months of the year, prime London prices were down 19%, while in the rest of London prices were down 9.4%.

Will the same fate unfold in Manhattan's posher neighborhoods, like the Upper East Side or the downtown locales like Tribeca and Battery Park City? Perhaps. Time will have to tell, of course, but brokers already report ominous signs of slower sales.  read more »

Thanks to the collapse on Wall Street, the Brooklyn sales market took a dip, but not a dive, according to a third quarter market report from real estate consulting firm HMS Associates. The third quarter average sales price of $695,285 marked a 2 percent reduction from the third quarter of 2007, creating a modestly improved market for buyers that could only turn more advantageous as the financial crisis reverberates.

Quarterly sales prices jumped annually in chi-chi neighborhoods like Brooklyn Heights and Prospect Heights, but fell in far away Sheepshead Bay and the emerging neighborhood of Greenpoint, suggesting a flight toward quality properties in an uncertain market. In the third quarter, sales increased by a meager 1 percent on the year, climbing from 988 last year to 999 this quarter. Home sales were up in Carroll Gardens and Williamsburg, but down Greenpoint and Fort Greene.  read more »

Leighton Candler, the Corcoran mega-broker who has the listing for Brooke Astor's Park Avenue co-op, just listed a full floor, nine-room, three-bedroom, 5,894-square-foot apartment at the Ritz-Carlton on Central Park South for $35 million. It's an ambitious listing for three reasons, but mostly because it's hard to sell anything expensive nowadays (especially if there are $8,770 monthly maintenance fees and $8,770 monthly taxes.)

Then there's the fact that the Ritz-Carlton doesn't have the social cache of 778 Park Avenue (Astor's building) or 1040 Fifth (where Ms. Candler is listing the penthouse for $46.5 million).

But consider that the apartment was bought only three years ago by one of the building's developers, Christopher M.  read more »

Brokers, strike another client base from your list!

USA Today reports that that Canadian home-buying spree that took hold earlier this year as the loon reached parity with the buck has evaporated. The U.S. dollar, for those who don't obsessively read the Journal's Money & Investing section every morning, has started to climb back against several other curriencies--including the Canadian dollar.

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From Rush Limbaugh earlier this week: "Ladies and gentlemen, as you know (and I have mention this had before) I had a fashionable apartment in New York in the Upper East Side. I'm seriously considering selling it. I have owned it since 1994. I love it. It was second home that I ever bought in my life. I stay there whim rarely in New York. I am "rarely" in New York because I get audited by New York State and City every year starting in 1997, when I moved to Florida; and it's become a hassle that I could tolerate, but it may now become stupid to own any property there."

(Hat tip: PolitickerNY.)

It appears the national housing slump has thoroughly caught up to the city of Rocky and the Word Series Champion Philies. Home sales and prices declined in 2008, according to a comprehensive market report (PDF here) published by Wharton economist Kevin Gillen, and it's not likely either will rebound soon.

The report includes data through the second quarter of 2008 that ended June 30, and found that median home prices had declined by 6.6 percent since the second quarter of 2007.  read more »

Massey Knakal chairman Bob Knakal, in his latest commentary, tackles the almost Zen question of why the housing market has to bottom out before the overall economy can get stronger:

Much of the consumer spending that has occurred over the last few years has been stimulated by the massive amounts of mortgage equity withdrawal taken by homeowners who have, essentially, used their homes as ATM machines. Additionally, the wealth effect of feeling as if they had massive equity in their homes created spending habits which fueled the economy. As these dynamics no longer exist, it is important for the housing market to bottom out in order for our economy to turn around.

 read more »

Last week, we gave you (via PropertyShark's crackerjack research) the Manhattan zip codes with the most $5 million-and-up housing deals in 2008. That list, however, deliberately did not include The Plaza, 15 Central Park West and Time Warner Center.

The above does, and there's a big difference between the two lists: Gone is the dominance of the Upper East Side.

Upper East Side zips claimed four of the top five spots on last week's list. This week, with the three uber-expensive condo towers included, the Upper West Side tops the list. In fact, the number of $5 million deals in zip code 10023, which includes both 15 CPW and Time Warner, jumped from 33 without the duo to 135 with, and propelled 10023 to the top.

From Bloomberg News: "Nowhere is the high-water mark of New York real estate more visible than the former Jehovah's Witnesses distribution facility at One Brooklyn Bridge Park. The 14-story condominium complex shattered the borough's price ceiling when real estate entrepreneur Elizabeth Stribling agreed in March to pay $6.05 million to live there. Now, two- thirds of the 449 units in the 1.2-million-square-foot building remain unsold, testament to the financial excesses brewed up across the East River in the Wall Street canyons framed by One Brooklyn's floor-to-ceiling windows."

From The Real Deal: "The record $1.1 billion Manhattan House conversion on the Upper East Side has run into resistance from several major commercial banks that have either refused to finance condo deals there or demanded exorbitant down payments from contracted buyers. Sources familiar with the building said at least a dozen condo buyers have either been turned down for loans, or asked to provide 30 to 50 percent cash deposits, which in some cases forced them to postpone the scheduled closing of their units."

Welcome to the buyer's market: Supply is up, demand is down, and prices are teetering. Brokers say buy now – after all, there are deals to be had! But what if you waited?

Here’s four areas (and one borough) where buyers would be fools to rush in now.

1. MANHATTAN
In Manhattan, prices are falling. But several gauges indicate that, in the months ahead, they'll fall even further.

For one, new development – which accounted for 30 percent of sales in the borough last quarter – continues to skew prices, according to the third-quarter market report from Miller Samuel and Prudential Douglas Elliman.  read more »

Some of the Real Estate Board of New York's Residential Deal of the Year award winners on Wednesday night, with their managers:

(Left to right) Steven Spinola, REBNY president; Kent Swig of Terra Holdings and Swig Equities; Michael Goldenberg; Dan Danielli, first-place winner of the Residential Deal of the Year sales award; Ruth Yeskel, third-place winner; Don Correia, second-place winner; Gordon Golub of Citi Habitats; Judy Oston, third-place winner; Richard Grossman; Norman Horowitz, second-place winner; John Wollberg, the winner of the Henry Forster Award; Ruth McCoy; Hall Willkie of Brown Harris Stevens; Abby Gellert; Ari Harkov, winner of the Most Promising Rookie Salesperson of the Year; Gary Friedland, second-place winner; and Diane Ramirez of Halstead Property.

Remember when Penthouse 40B at Fifteen Central Park West was such a gloriously shiny token of our breathtaking real estate bubble? A certain foreigner--maybe a London-based investor--signed a contract in 2005 for the 5,276-square-foot, 14-foot-tall, 9.5-room, four-bedroom penthouse, and closed at the end of this April for $21.5 million. He took out a $14.5 million mortgage with JPMorgan Chase that same day, records show, which means it only cost $7 million cash. And within a few weeks the sprawl was on the market with Brown Harris Stevens for $80 million, just about four times the price of the condo.

It was the most expensive residential listing in New York City.  read more »

All is not well at the summer playground for America’s rich and famous, as home prices and sales in eastern Long Island tumbled to two-year lows in the third quarter, according to a new Hamptons/North Fork market report from real estate appraisal shop Miller Samuel and brokerage giant Prudential Douglas Elliman.

The quarterly median sales price in the tony vacation enclaves dropped to $729,000, which is the lowest since the fourth quarter of 2006 and 17.3 percent below last year’s median price of $882,000. Third-quarter sales fell from 427 last year to 355 this year, a 16.9 percent plunge, which brought East End market activity to its slowest quarterly pace since Miller Samuel began tracking the area in the second quarter of 2006.  read more »

More statistical fun with PropertyShark! Above is an analysis of where the Manhattan home deals of at least $1 million have happened in 2008 through Oct. 17. The numbers do not include deals in The Plaza, 15 Central Park West and Time Warner Center, as those would've skewed things a bit. For deals of at least $5 million alone, click here.

Research site PropertyShark crunched the numbers, and came up with where the home sales of at least $5 million were happening in Manhattan this year. The above numbers, ranked by amounts per zip code, cover closed condo, co-op and other single-residential deals from January through Oct. 17. Also: The numbers don't include deals at super-expensive Time Warner Center, 15 Central Park West and The Plaza, which likely would've skewed everything.

The 16,000 jobs that Manhattan employers are expected to shed this year will help by the end of 2008 drive the borough's apartment vacancy rate up to 2.8 percent for larger buildings, according to a report from Marcus & Millichap.

The rate could rise even further in 2009 ("further" being a relative term in Manhattan, which traditionally has the nation's lowest apartment vacancy rate). The City Comptroller's office last week predicted New York would lose over 165,000 private-sector jobs in the next 24 months. Higher unemployment usually means less demand for apartments. Less demand generally means lower rents--over time. So far, despite several consecutive quarters of iffy economic news, Manhattan apartment rents have stayed generally steady.

The Marcus & Millichap report also concluded that apartment development will produce nearly 1,500 new units in Manhattan this year.

Jonathan Miller has posted the rather grim Douglas Elliman-Miller Samuel third-quarter housing report--sales down, prices down, condo sales really down. PDF here.

Two days after The Observer wrote about a huge Texas gas options broker buying a $4.35 million East Village apartment from pro-vegan techno star Moby, another oil star has struck.

According to city records, Victor E. Grijalva, a director of the world's largest offshore drilling contractor, Transocean, and the former vice chairman of Schlumberger (a "leading oilfield services provider"), has sold his four-bedroom, 3,800-square foot apartment at 525 Park Avenue.

Not only did Lara and Habib Kairouz, a financier, pay $9.2 million, records show, but they did it on Sept. 25, the day that Washington Mutual was seized by the government. Despite the global financial crisis, they'll now have a private elevator landing leading to an oversize gallery; a living room and formal dining room both facing Park Avenue; a library with an en-suite bathroom (which means it could be a fifth bedroom); a windowed eat-in kitchen next to a pantry; and a staff room "suitable for guests," says  read more »

Research site PropertyShark has produced an interactive map of Manhattan's third-quarter condo and co-op sales (the site produces a report with the Corcoran Group--report here in PDF). Zoom in on different circles and get deal details.

On May 2, George Noia moved into a two-bedroom basement apartment on Long Island. His bedroom was small and windowless, and the kitchen held only a microwave and a hot plate. But of all the places he had seen, the one on Revilo Avenue in Shirley was the cheapest, at $130 a week.

Until he found out that his roommate was scamming him.

"When I heard that, I was pissed," Mr. Noia said. "I was absolutely angered by it. I'm paying more money for a smaller room?"

In September, Mr. Noia overheard his roommate chatting about their rent with one of the building's other tenants.  read more »

Brooklyn home sales plummeted 38.2 percent annually in the third quarter to 2,298, according to a new report from brokerage Prudential Douglas Elliman and appraisal firm Miller Samuel. Condo sales dropped especially sharply year over year.

The Miller Samuel numbers cover closed deals in the three months ending Sept. 30, so the fallout from the Wall Street crisis of mid-September isn't immediately reflected. Still, the steep drops, a continuation of the reality on the Brooklyn ground from the summer, offer clues to that market going forward: fewer sales and falling prices.

Condo sales fell by 32.6 percent annually in the third quarter to 660, while the median sales price for a Brooklyn condo fell 4.  read more »

The London housing market has gone ka-blooie. Real estate brokers in the British capital report the slowest pace of business in 30 years, according to this morning's Wall Street Journal.

London's real-estate agents sold an average of 8.3 properties apiece in the three months ended in September, according to the Royal Institution of Chartered Surveyors. That is the lowest tally for any region of the country since the survey started in 1978. In Britain as a whole, agents sold an average of 11.5 properties during the three-month period, down more than 50% from a year earlier.

My colleague Oliver Haydock has a column in The Observer's latest print edition about what would happen to the Manhattan housing market if all those previously flush Europeans split. Bad times, folks. Bad times.

"A French colleague who spends a lot of time in NYC just backed out of a condo deal." ["Mighty Euro Tumbles to 16-Month Low Against Mighty Dollar"]

Way back in April, Cortney and Robert Novogratz, who renovate and sell hip houses under the name Sixx Design (they wrote the book, or at least a book, on "downtown chic"), put 5 Centre Market Place on the market for $18 million. Yet, in 2004, they had bought the place for only $1.512 million, less than a 10th of their asking price. The bubble was such an ambitious time!

Things have changed. After a price cut to $15.5 million, the Corcoran listing left the market in August. The townhouse is back on this week, now asking $13.85 million. Buyers interested in five-floor homes with Belgium-made oak-and-steel staircases (or with basketball courts built under Swiss-made steel mesh domes) should be excited.

The euro tumbled to a 16-month low against the dollar on Friday, dropping to $1.3258, compared to a record high of $1.60 as recently as July. While this might be good news for New Yorkers tired of the tourist clog, the euro's slide could be particularly bad news for a Manhattan housing market that until recently relied on foreigners for up to one-third of its new-condo buyers.

If the Western Europeans (including the British, whose pound has also dropped against the dollar) find themselves more and more on parity with American spenders, will they still buy so much so nonchalantly? Just askin'.

Can money still be quadrupled in the Manhattan real estate market? Someone seems to think so.

Elliman put a townhouse at 333 East 65th Street on the market yesterday for $15 million, even though records show that the place sold only 13 months ago for $3,736,765.

The ambitious owner is a Washington personal injury lawyer named Simon Forgette. (Personal injury lawyers adore Manhattan real estate; read this or this or the second item here for proof.)

The listing says there's been an "impeccable renovation" (the picture above is old, but the listing doesn't have anything newer). "The owner did a total renovation, a gut renovation, and that's what he feels the property is worth," listing broker Beth Roberts said today when asked about the listing price.  read more »

Real estate brokers were not amused when The Observer reported that Manhattan's luxury real estate bubble has been pricked by a glut of inventory. It's up to agents to maintain the illusion that supply is low and demand high, whether or not market statistics are on their side; remember that Carrie Chiang said, "I did $450 million this year. Last year I did $382... If it’s slow, the seller will find me. What do I care?"

Despite the recent spate of mostly pessimistic market reports, those brokers are incredibly good at finding a few statistics to keep everyone calm. One top agent pointed out these numbers, from Brown Harris Stevens' market report's section on Manhattan co-op sales: The average sales price for co-ops with at least four bedrooms was $10.1 million last quarter, up from just $5.9 million a year ago.

   read more »

From The Real Deal:

A flailing former Citi Habitats sales agent, Leif Lopez, was busted for allegedly scamming an apartment hunter out of $100,000 in a phony transaction negotiated at Starbucks.

 read more »

Capitalism is a cruel, cruel thing. According to city records filed today, Kurt A. Locher, formerly a Lehman Brothers managing director and the head of its mortgage banking, bought a $5.25 million apartment at 500 West End Avenue.

According to a listing, the five-bedroom apartment was "one of the largest and grandest homes on the market on the Upper West Side," with a formal dining room, a maid's room, a living room, a library, and a windowed, eat-in chef's kitchen "large enough to serve a growing family or entertain like a professional!"  read more »

That was the average New York City home sales price in the third quarter, according to a new report from the Real Estate Board of New York. That's down from the last two quarters but up slightly from the same period in 2007.  read more »

The Miller Samuel-Prudential Douglas Elliman third-quarter Manhattan housing report's now online (PDF).

To read about the sagging Manhattan condo market click here; to read about the troubled luxury market click here.

"Do you hear the crickets?," asked Ali Jafri, a broker for Prudential Douglas Elliman. We were standing on the ninth-floor balcony of a brand-new three-bedroom condominium for sale at 20 Bayard Street in Williamsburg. "That's something you won't get in Manhattan."

These days, Mr. Jafri might hear crickets more often than he'd like. It was the Sunday before the European markets began to tumble, during peak open house hours, and the buyer traffic through Brooklyn's newer towers was slow. Just a few days earlier, The New York Times had declared that "the credit crisis and the turmoil on Wall Street are bringing New York's real estate boom to an end.  read more »

This is the first in a three-part series today covering the Manhattan housing market since autumn 2007.

Manhattan condo sales dropped 22.6 percent annually in the third quarter of 2008, according to a new report from appraisal firm Miller Samuel and brokerage giant Prudential Douglas Elliman. At the same time, the 12 months from September 2007 to now, the median sales price, the average sales price and the average sales price per square foot for a Manhattan condo increased.

With lower downpayments and no co-op board process, condos are the gateway buy for many New York homeowners; and therefore a solid barometer of where the borough's housing market has been and where it may be going in tougher economic times.  read more »

By this time Friday morning, the blogosphere and the dailies will be rat-a-tat-tat-tat abuzz with what's happening or not in the Manhattan housing market. The Corcoran Group and PropertyShark.com, Prudential Douglas Elliman and Miller Samuel, StreetEasy.com, Halstead Property and Brown Harris Stevens all plan to spill their third-quarter findings into the public sphere.

What to watch for:  read more »

"i can't imagine why anyone, even italians, would want to live in there. isn't the whole point of living in soho to live in unique, stylized apartments and building. it's buildings like this that are making tribeca feel like 94 and 1st avenue, i hope soho avoids this." ["Inside the Gwathmey Seigel-Designed Soho Mews"]

Former Viacom chief executive Tom Freston has apparently taken his townhouse at 57 East 66th Street off the market, according to the Wall Street Journal. He had listed the former Andy Warhol home in the spring for $38.5 million, only to chop that asking price to $35 million.

Mr. Freston, according to a 2000 Observer article, bought the neoclassical townhouse for $6.5 million, moving there from a Tribeca penthouse after about $100,000 worth of renovations.

Warhol lived in the townhouse from 1974 (after paying $310,000 for it!) until his death in 1987.

Hot off the Associated Press wire:

The Commerce Department said Thursday that new homes sales fell by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales pace since January 1991.

It was a much bigger sales decline than the small 1 percent drop that economists had been expecting. The average price of a new home sold in August dropped by a record amount of 11.8 percent to $263,900, compared to the July average of $299,100. The median price was also down, falling 5.5 percent to $221,900.

In more flush times, Mayor Bloomberg took two separate high-profile steps related to property taxes in the city: he lowered the tax rate by 7 percent, and he gave homeowners citywide a $400 rebate.

Now with the economic storm clouds rolling in, Mr. Bloomberg has repeatedly suggested in the past week that he might eliminate that 7 percent cut, bringing in another $600 million or so in revenue to the city.

As for the $400 rebate, which is viewed by critics as an act that emphasized buying political goodwill more than sound policy, the mayor apparently seems reticent to remove it.  read more »

"just bought in midwood. glad to see that midwood didn't appear on this list at all. it can only be a secret for so long i guess. takes me 35 minutes to union square." ["Where the Bobos Now Buy in Brooklyn"]

More bad news today, this time from the Department of Commerce. New home construction is way down this year, falling well short of last year's numbers and, more troubling, way behind a recently revised annual projection. Economist Patrick Newport was quoted in a Bloomberg News article saying, "the home-construction industry is still in a deep recession and will remain there probably for the rest of the year."

Housing construction dropped 6.2 percent last month and the projected annual rate of 895,00 is the lowest number since January 1991. The statistics failed to meet the modest projections of economists, who earlier this summer predicted the annual rate would be in the mid-900,000's. The uncertainty may reflect even more difficult times ahead, bad news for people in California and Florida who've been dealing with the depressed market for some time.

"A 'slight dip'?? You have GOT to be kidding! The last time the Manhattan real estate bubble deflated (1989-93), prices fell by about 30% on average. The main difference now is that there is a LOT more new construction in the pipeline than there was then. Also, condos account for a much larger share of the market now than then--and it's MUCH easier to get a questionable loan for a condo than for a co-op. Be careful what you wish for. Keep in mind that prices have roughly doubled in the past 5 years, so even with a 40% drop, they'd still be up about 20% from there. And once prices start falling it will be the foreign buyers (speculators) that rush for the exits FIRST. Just look what happened in Florida." ["Panic Is Fun! First Bear Goes, Then Lehman, Then Condo Market?"]