Wire: Bloomberg News (BN) Date: Aug 7 2013 7:23:54 Manhattan Apartments $3 Million or Less Hard to Get: Mortgages By Oshrat Carmiel Aug. 7 (Bloomberg) -- With $1 million to spend and no need for a mortgage, Laiyan Wong expected to be able to easily buy a two-bedroom apartment on Manhattan’s Upper West Side. What she didn’t anticipate was how much competition she’d have. Wong viewed more than 10... [more]
Wire: Bloomberg News (BN) Date: Aug 7 2013 7:23:54
Manhattan Apartments $3 Million or Less Hard to Get: Mortgages
By Oshrat Carmiel
Aug. 7 (Bloomberg) -- With $1 million to spend and no need
for a mortgage, Laiyan Wong expected to be able to easily buy a
two-bedroom apartment on Manhattan’s Upper West Side. What she
didn’t anticipate was how much competition she’d have.
Wong viewed more than 10 apartments in two months,
gradually increasing her budget to $1.5 million as it became
clear that others were looking for similar properties amid a
plummeting supply of homes in her price range.
“I made four bids and was outbid each time,” said Wong, a
trader at an investment bank, who eventually got a mortgage and
paid $1.6 million for a condo that was about to go under
contract to someone else. “You have to be willing to make a
decision in a few minutes and overpay the asking price.”
Manhattanites with budgets that would buy mansions in most
of America are discovering it’s tough to find even a two-bedroom
apartment in New York as the inventory of homes shrinks. The
number of available units for less than $3 million -- those
generally considered nonluxury -- has plunged by the most on
record, creating a shortage that’s unlikely to be alleviated any
time soon as developers focus on ultra high-end condos that have
set price records by wealthy investors.
Listings for nonluxury apartments, encompassing about 90
percent of the Manhattan market, have fallen by more than 36
percent year-over-year in each of the last three quarters, the
biggest declines in 12 years of recordkeeping, according to data
from New York appraiser Miller Samuel Inc. By contrast,
inventory in the top 10 percent of the market by price fell only
3.9 percent in the second quarter from a year earlier.
‘Most Challenging’
“For the bulk of the market, the 90 percent, it’s probably
the most challenging period for a buyer in the 25-plus years
that I’ve been observing the market,” Jonathan Miller,
president of Miller Samuel, said in an interview.
In the second quarter, 3,638 units priced at less than $3
million were listed for sale, the smallest nonluxury inventory
in nine years, according to Miller. The absorption rate, or the
amount of time it would take to sell all those properties at the
current pace of deals, was 3.9 months, the fastest in records
dating back to 2004.
In Manhattan, where the median price for a two-bedroom
apartment is $1.35 million and a three-bedroom unit costs $2.63
million, the nonluxury category encompasses many first-time and
move-up buyers, Miller said. Nationally, the median price for
single-family home in June was $214,200, according to the
National Association of Realtors.
Narrowing Gap
Listings for the whole market, from studios to four
bedrooms, are falling, Miller said. The costs though to buy a
nonluxury apartment are outpacing those of the most expensive
properties.
The average price of a nonluxury Manhattan apartment
climbed 7.8 percent in the second quarter from a year earlier to
$1 million, according to Miller Samuel. The average price for a
unit in the top 10 percent of the market declined 8.4 percent to
$5.25 million.
“Relatively speaking, it’s gotten more expensive to buy a
nonluxury property,” Miller said.
The pool of available homes at the lower end of the market
is shrinking as owners who bought during the boom and then saw
values plummet wait to list their properties until their equity
climbs high enough to justify a sale, according to Miller. New
supply isn’t growing fast enough because developers who have
revived projects after the credit crisis are almost exclusively
building luxury units, he said.
“Everything that’s built has to be considered luxury to
succeed,” said Rachel Gilbert Solomon, a principal at Atalanta
Advisors LLC, a New York-based firm that helps developers get
equity and debt financing for their projects. “Land is trading
at a really high price so you have to make it very high-end.”
Development Costs
Developers are paying about $750 a square foot for
development sites, and construction costs push up the price of
building new projects to as much as $1,700 a square foot,
Gilbert Solomon estimated. In the last boom, the rate for
development sites was $400 to $450 a square foot, she said.
At the current prices, builders are counting on selling
units for an average of about $2,400 a square foot to make the
returns worth the risk, she said.
“Every project south of 96th Street is assuming sellouts
in excess of $2,000 a square foot, and that really creates a
problem” for buyers, said Robert Knakal, chairman of brokerage
Massey Knakal Realty Services.
New Condos
A building on West 77th Street that he was planning on
marketing for about $40 million sold last month for $55.5
million, or about $725 a square foot, according to Knakal and
public records. The buyer, developer Naftali Group, has already
gotten calls from people interested in an apartment at the site,
which still houses a Hertz parking garage, the firm’s chief
executive officer, Miki Naftali, said in an interview.
At 150 Charles Street, a West Village condominium
development by the Witkoff Group where apartments are available
for as much as $35 million, a 541-square foot (50-square-meter)
studio was last listed for sale at $1.1 million, according to
StreetEasy. The unit, which is in contract, was initially priced
at $850,000 when sales began earlier this year according to
documents filed with New York State Attorney General Eric
Schneiderman’s office.
At Walker Tower, a former Verizon Communications Inc.
building at 18th Street near Seventh Avenue in Chelsea, a 1,730-
square foot two-bedroom unit on the ninth floor was listed for
$4.2 million, as of a January price filing.
‘Starved’ Market
Developer Sonny Bazbaz said he foresaw a ‘starved’ market
for mid-priced apartments, when he drafted plans for the condo
conversion of an Upper West Side property he acquired from a
lender in a 2011 bankruptcy sale. Buying the former rental
property at 101 West 87th Street for $48 million – or about $450
per square foot — Bazbaz saw an opportunity to create a condo
project where half of the 62 apartments would be priced for less
than $2 million.
When sales began in December, “the units started flying
off the shelf, and we started increasing prices in response to
that demand,” said the president of Bazbaz Development LLC.
In new condo developments, there were 539 listings for $1.5
million or less at the end of June, down from 1,792 in the
second quarter of 2008, the pricing peak of the last Manhattan
construction boom, according to data compiled by property-
listings website StreetEasy.com.
For buyers with a budget of $1 million or less, there were
364 newly built units to choose from in the second quarter,
compared with 1,102 in 2008.
Boom Cycle
“The people looking to buy now are the people who were
waiting for the last boom cycle to burst and then were kind of
watching the market and hoping that this might finally be the
time,” said Sofia Song, vice president of research for
StreetEasy.
The lack of supply is spurring bidding wars that
particularly hurt those dependent on a mortgage, according to
Jacky Teplitzky, a broker at Douglas Elliman Real Estate. Fast-
rising home values mean the appraisals that lenders rely on to
finance a deal are always out of date, she said.
Some purchasers are agreeing to complete a deal even if
they can’t get financing. When she represents sellers, Teplitzky
requires buyers who waive a mortgage contingency to prove that
they can handle the full cost in cash.
If that apartment doesn’t appraise for the full value of
the bid, “I have to make absolutely sure that the buyer has
enough money in the bank to make up the difference,” she said.
“We request full financial disclosure.”
Mortgage Contingency
Wong, the bank trader, was among those who agreed to waive
a mortgage contingency in addition to boosting her price range.
She began looking in April for a two-bedroom apartment with room
for an office, seeking to find a weekday apartment closer to the
Upper West Side high school her son will attend in September.
“One million sounded like a good number,” she said of her
initial budget. “But when I looked at the apartments, I knew I
needed to increase that.”
She arrived the day after an open house to see a co-op on
West 104th Street, only to find out from the sales broker that
the property had received nine bids, all at or above the $1.15
million asking price. Wong then hired that broker, Linda Feder
of Corcoran Group, for advice on her search.
After four unsuccessful bids, her fifth try was for a
three-bedroom condo on West 98th Street near Riverside Park,
listed at $1.4 million. The seller had already accepted an offer
and sent a contract to the potential buyer. Wong won the unit by
bidding $1.6 million and pledged to sign a contract within a
week and complete the deal in a month. She closed in June.
For Related News and Information:
Manhattan Home Prices Rise in Busiest 2nd Quarter Since ’07
NSN MPBJGL6TTDUX
Manhattan’s Zeckendorfs Embrace Global Buyers With UN Condos
NSN MNZFD96JTSF7
NYC Tallest Condo Corridor Gets New Entrant With Steinway
NSN MMFVRE6TTDSA
Manhattan Condo Builders Exploit Demand With Price Increases
NSN MI47ZV6TTDWZ
Mortgage Columns: NI MTGCOL
--Editors: Christine Maurus, Pierre Paulden
To contact the reporter on this story:
Oshrat Carmiel in New York at +1-212-617-3317 or
ocarmiel1@bloomberg.net
To contact the editor responsible for this story:
Kara Wetzel at +1-212-617-5735 or
kwetzel@bloomberg.net;
Rob Urban at +1-212-617-5192 or
robprag@bloomberg.net.
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Response by uwsbeagle
over 12 years ago
Posts: 285
Member since: Feb 2012
Was just about to post this article and you beat me to it. What's interesting, IMO, is the construction costs per sq foot referenced in the article. Quite a jump from the last run-up.
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Response by scarednycgal
over 12 years ago
Posts: 170
Member since: Mar 2013
The economy seems to be slowing down slightly. Mortgage rates are going up. For the lower end properties (and by low end I mean 1 million to 3 million) that does not have the cash buyer, will their prices hold steady/increase or do people think their prices will have to drop?
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Response by steveF
over 12 years ago
Posts: 2319
Member since: Mar 2008
scarednycgal...the reason why mtg interest rtes are rising is because the economy is much stronger now and the labor market is vastly improved which means incomes are rising which will more than offset the increased monthly cash payments(breathe). The cysle begins again. I think the next 5 years will see increasing prices until developers are able to deliver enough inventory to somewhat satisfy demand.
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Response by scarednycgal
over 12 years ago
Posts: 170
Member since: Mar 2013
SteveF....I hope you are right, but I don't think wages are actually increasing.....they seem to be stagnant, and jobs are only coming back very slowly and the jobs that are coming back are part-time jobs. THe rich are definitely doing well. The middle class is getting squeezed, and those are the pool of people for the lower end properties (1million!)
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Response by renterjoey
over 12 years ago
Posts: 351
Member since: Oct 2011
"the reason why mtg interest rtes are rising is because the economy is much stronger now and the labor market is vastly improved which means incomes are rising which will more than offset the increased monthly cash payments(breathe)"
The NY Times might be telling you this but the facts are a lot different. GDP is low and the the recent job report was terrible. Interest rates are rising because the Fed keeps broadcasting they are going to pull away the punchbowl of artificial low rates. I don't think they can ever afford to do that otherwise we would go into a deep recession. Personally, I think we are still in a recession and housing prices and stock market are artificially being held up by these low rates. Once rates continue to rise you'll see housing prices come down again.
Manhattan on the other hand is a different story all together.
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Response by urbandigs
over 12 years ago
Posts: 3629
Member since: Jan 2006
agreed with renterjoey -- the recent rate rise was more a normalization of sorts, as the markets adjusted to a future of less fed interference with bond markets. At some point yes, house prices will dip but that doesnt mean a repeat of the last down cycle that came with a surge in credit stress and a massive equity selloff. Its all relative. Looking at housing nationwide, that dip may come after a 20%-30% bouce off the 2009-2010 lows.
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Response by jason10006
over 12 years ago
Posts: 5257
Member since: Jan 2009
"but I don't think wages are actually increasing."
They are for people who can afford apartments in this price range.
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Response by Nah
over 12 years ago
Posts: 85
Member since: Feb 2008
Agreed with renterjoey and urbandigs. Steve F is very wrong. I promise you that a segment of the market here in Manhattan will adjust downward in the coming years. Mainly 1-2bdrms currently selling for $1400-$1800 a sf. If you own a 1300sf 2bdrm that you purchased for say, 2.2mm-2.5mm, it will without question be worth around $2mm in the next 5 years. Factor in necessary 8% or more in selling costs, lots of people are going to lose money. A little bit of a crystal ball theory, but I just call it common sense. Oddly, I can't wait for this happen. Factoring in what most have already stated; wages are not increasing, for whatever jobs are available the marketplace is saturated and with rates increasing to 5.5% by mid 2015, many people will have significantly reduced buying power. Maybe it's me, but I feel like everyone else is drunk. Doesn't matter, I couldn't afford a $2mm apt (not even $1mm) in my wildest dream. What I do know is that the type of market we are experiencing is unsustainable. I'm actually shocked by the volume of buyers who are not expressing these same concerns. Then again you could rent a mildly ok 1bdrm for $4500 a month.
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Response by steveF
over 12 years ago
Posts: 2319
Member since: Mar 2008
Yes I think wages are the last to increase and interest rates are the first. Companies will squeeze everything they can before they are forced to increase wages. First hire than when the labor pool decreases demand for employees sets in and wages increase.
Right now though market psyche is rampant. With articles like the one posted above being the norm buyers must be getting very anxious. Typical human behavior and the cycle begins again.
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Response by Nah
over 12 years ago
Posts: 85
Member since: Feb 2008
However it should be fun when every 2bdrm available is $2500 a sf! So if I am wrong (which I generally am) and the market is in fact getting better, then...
Can I borrow someone's balcony for an hour?
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Response by marco_m
over 12 years ago
Posts: 2481
Member since: Dec 2008
In the last 3 months, evry single sell off in treasuries has been kicked off by a positive economic data point. rates will continue to move up as positive economic news comes out. Lets see what happens on tomorrows unemployment number and then next weeks PPI / CPI numbers
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Response by tpushbklyn
over 12 years ago
Posts: 137
Member since: Mar 2009
So who benefits most from the current market, outside of 100% equity sellers looking to get out of NYC? First time buyers and those looking to bump up are faced with real challenges. And despite quick sales and inflating prices, what do brokers gain from low inventory? How can they thrive with so little to show their clients?
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Response by urbandigs
over 12 years ago
Posts: 3629
Member since: Jan 2006
i do have a post in the works titled animal spirits..havent had chance to finish yet, discussing the herd like mentality that has grown over these past 4-5+ months or so. we peaked in may/june, frenzy died a bit, but u wouldnt know it if ur in the field actively bidding for quality property that is priced somehwat right
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Response by Nah
over 12 years ago
Posts: 85
Member since: Feb 2008
In response to the above, good brokers prefer markets like 2009 where they can coach customers. Client retention is higher and the overall process is more rewarding for everyone. The only fools (sellers) who don't enjoy markets like 09 are the ones who overpaid in 06-08. Kinda like now. Point is, no one is having a "good time" right now. Brokers are stressed, despite what you read. Granted many brokers are doing single high value transactions, overall volume is down drastically. Most brokers are just flat out lucky right now. There is little skill or talent required in markets like this. I know a broker who just sold a $5mm place, who is a moron and that commission should hold them over for some time. I'll now stand back for those with the "factual" market data that indicates everything is just peachy. Client retention is low right now. Many buyers are pulling out and choosing to rent. Some buyers are working with multiple brokers, which is never a good idea. All it takes is for two brokers to register the same customer to an open house and they're basically blacklisted at that point. With a large pool of buyers no listing agent is going get involved with something like that, cash or not. And for the record, I can't remember the last time I saw a "first-time" buyer.
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Response by uwsbeagle
over 12 years ago
Posts: 285
Member since: Feb 2012
I'm not implying that there is a $1700 psf floor on RE and clearly one must discount for location, age, condition, etc but I still think it's a compelling metric as a basis for making comparison for resales that are good comps to new development.
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Response by uwsbeagle
over 12 years ago
Posts: 285
Member since: Feb 2012
Developers are paying about $750 a square foot for
development sites, and construction costs push up the price of
building new projects to as much as $1,700 a square foot,
Gilbert Solomon estimated. In the last boom, the rate for
development sites was $400 to $450 a square foot, she said
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Response by uwsbeagle
over 12 years ago
Posts: 285
Member since: Feb 2012
sorry, posts got reversed!
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Response by tpushbklyn
over 12 years ago
Posts: 137
Member since: Mar 2009
Nah - I can add a bit of empirical evidence to your client-retention comment, and I'm a 'first time buyer' though I don't fit the demographic. I've simply stopped looking in earnest, not because I've been priced-out but because I have the option and refuse to skimp through paltry inventory with hundreds of others. It isn't about 'buying now or being priced out forever' .. but simply a lack of available choices.
Perfect example of what this discussion is about. This is a fantastic apartment and building. Sold at the height of the market in 08 for $2.6mm and resold in 2010 for $2.2mm. I'd argue that once again the current value should be somewhere around that $2.6mm number. If it sells at asking $3.15mm it would need to appreciate to about $3.5mm to break even after brokerage commission, transfer taxes, etc are paid. Based on what we're witnessing in the financial markets, including rising rates, I see this having a hard time being more valuable than $2.5mm-$2.8mm a few years from now.
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Response by Ottawanyc
over 12 years ago
Posts: 842
Member since: Aug 2011
Tpush is discussing the lack of inventory. Clealry the market is being drive by the lack of supply. To Nah and others that are a bit more bearish, do you anticipate an uptick in inventory? It seems that most investors are currently unloading property that they have held for a few years. So where will new inventory come from?
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Response by scarednycgal
over 12 years ago
Posts: 170
Member since: Mar 2013
Just where you said, people unloading their property that they have been holding on to for past few years. Probably a few new developments will also come on the market here and there.
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Response by steveF
over 12 years ago
Posts: 2319
Member since: Mar 2008
"Agreed with renterjoey and urbandigs. Steve F is very wrong".....lol
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Response by Nah
over 12 years ago
Posts: 85
Member since: Feb 2008
Ottawanyc - it's a complex answer. You are correct the market is being driven by the lack of inventory and you ask the question of where will the inventory come from. Put it like this; Urbandigs is absolutely correct that there is a serious herd like mentality and the same applies on the way out. You're right that investors are already offloading their properties. I know many coop owners in Manhattan that should not be owners for one reason or another. My overall feeling is that the lack of inventory has to do with control. Property owners not feeling secure as a renter or whatever else they deal with personally. We're really dipping into psychology now, but all it takes if for one piece of bad news or for a handful of apts to start bucking the trend and selling for a lower p/Psf. I've actually spoken with two entirely separate coop owners this year whom I advise they sell and both in their own way said, no. "It's all I've got" or something like that. They can just get by making mortgage payments and you'd be suprised just how many people are like this in Manhattan. This applies to individuals carrying apts up to $2mm. As for the coop owners I spoke with, I advised they pull any equity they could out of the property and perhaps make a little profit. Take their winnings and leave NYC and live better since both in their own way were stressed and nkt happy. Both, amazingly said "I don't care if this apartment is worth 50% less in 2 years, I'm not selling it now." It's shocking to hear this. Perhaps its a bit of the New York romanticism as well and not wanting to go anywhere else. I don't know, but It's a perfect storm in the making. What happens when you have 200 apartment owners who by their nature are generally not financially savy people? They'll sell at any cost just to rid themselves of whatever it is and this is the same herd like mentality. Just like buyers are competitve on the way in sellers will be just as competitive on the way out. While not on the same level I witnessed in early 09 this was the mentality of many people I spoke with. I know a woman who had a net loss of nearly $185k on a $750k apt. That's substantial. I see this happening again. The only other option for inventory is new construction and there are zero signs tht developers will shift from building only for the top end of the market and rightly so, considering their costs.
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Response by steveF
over 12 years ago
Posts: 2319
Member since: Mar 2008
Nah, you are new to these boards aren't you??..when you said "very wrong" I got a bit nostalgic is all...
anyhow sorry to say but i disagree with most of what you say.have a great day.
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Response by Nah
over 12 years ago
Posts: 85
Member since: Feb 2008
That's fine Steve. The Market is flexed to its furthest most limits at the moment. It's ok to disagree, but I just really wish I could peak into your brain and others for a moment to understand why the possibly of $2500 for pedestrian properties is justifiable. Considering the lack of inventory, that seems to be the direction we're heading.
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Response by Nah
over 12 years ago
Posts: 85
Member since: Feb 2008
And no Steve I am not new to the boards. I read them daily. This as of today, stuck a nerve for me. It's like there is this grand party and everyone is drinking copious amounts of liquor and drunk out of their heads about where things are headed.
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Response by st2c
over 12 years ago
Posts: 27
Member since: Mar 2011
Urbandigs has a great blog and gives excellent real estate advice but he is no economist. The canard that the fed has been keeping interest rates low is absolutely false. Although the fed has some influence, if it was keeping rates artificially low, we would see an over-heating economy with rampant inflation. Neither of which exists. Moreover, neither Germany, Finland, Holland, nor France for that matter are engaged in QE and yet their interest rates are as low as ours. Finally, if the fed was keeping interest rates artificially low, you would/should see spikes when QE1 and QE2 ended. The opposite happened. Interest rates actually went down. As much as you may roll your eyes, Krugman is absolutely correct that we are in a liquidity trap and cash needs to find a home. Interest rates will only go up on a sustained basis when the economy recovers.
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Response by renterjoey
over 12 years ago
Posts: 351
Member since: Oct 2011
so the fed hasn't been keeping interest rates low. Hmmm.... interesting is that why just the mere mention of tapering off is as well received in the bond market as the Hindenburg? As far as Europe not being engaged in quantitative easing you may want to read this:
if it was keeping rates artificially low, we would see an over-heating economy with rampant inflation. Neither of which exists.... no just bubbles look at the housing and stock market.
"Interest rates will only go up on a sustained basis when the economy recovers" or when their is less faith our economy. Take a look at interest rates in Spain or Portugal. Unemployment in Spain is above 20% yet their interest rates are higher than ours. Does that mean their economy has recovered?
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Response by st2c
over 12 years ago
Posts: 27
Member since: Mar 2011
I'm sorry but you can't make things up. Interest rates bottomed on April 30th, the fed talk was not until much later in the month in May. While they went up since his talk, we are still talking about less than 50bps. That is a Hindenburg rise? Really? And we are still talking about the 10 year at 2.58% as of this posting, still at historic lows. Moreover, have you seen economic data since then. Weekly jobless claims at 5 year low, PMI at 53.7, ISM Manuf. 55.4, US Cars sold at almost 16mn (back to 2007 levels), housing on fire around the country, commercial rents at highest all time levels. Of course you can find negative economic indicators which is why we still have high unemployment and U-16 levels but the economic improvement is more than enough to justify a 75bps rise in interest rates.
As for Zerohedge, I use to read his blog incessantly. When he began, he presented investable trading ideas, Citibank preferred trade, short local law vs. long UK law sovereign debt, ABX arbitrage, etc... He also broke very important news stories such as the problems with high frequency trading, that JPM was flaunting Fed Res rules with the Whale Trade, and problems with too big to fail. However, for the past two years his site has become a haven for goldbugs, conspiracy theorists, and wackos. He still posts good articles but every single article has a negative spin. As for housing being in a bubble, perhaps. The stock market, who knows although PE levels are not historically high. And I can agree that the fed is inflating these assets but that is by design. I would prefer fiscal stimulus but the Fed is the only game in town and you have to play the cards you are given.
And with all due respect, your last point on Spain and Portugal is plain silly. Interest rates can go up because of inflation or because of credit worthiness. Spain and Portugal clearly have solvency issues but I would submit that if they were out of the Euro, their solvency situation would be solved by the currency devaluation that would immediately occur. Spanish workers would now get paid 1/2 of what German worker would get paid instead of 1 to 1 as it now stands.
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Response by Oxymoronic
over 12 years ago
Posts: 165
Member since: Dec 2007
The simple demand supply economics of a market where supply is at a 7 year low and there is little to no new development in that price range would suggest to me that we are likely to see some significant price appreciation over the next 12 months. (Look at urbandigs blog to see the inventory plumming new depths each day as more Q1/2 sales close. I'll be intersted to see if the total market falls below 3,900 in time for the post-Labor Day listings).
Beyond that, I would agree that if rates were to increase significantly and supply were to increase significantly as 2005-2008 buyers are able to realize a profit after the friction costs of moving then this would likely cause a pause in appreciation.
However, it takes a very significant event to shift sentiment sufficiently in sellers as well as buyers for property values to start to sink in nominal terms. It is more common for values to stagnate until inflation creates the real depreciation the economics call for. Only if there were to be a renewed global recession and a real fear of a global depression would it be likely that the market were to sink again in the next 1 to 3. Also, I think the market is less sensitive to interest rates than people typically imagine so unless interest rates really spike, I don't think it causes prices to dip vs pause.
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Response by JuiceMan
over 12 years ago
Posts: 3578
Member since: Aug 2007
Nah, have a look back a couple years at steveF's posts. He was repeatedly flamed for calling the market bottom and being long Manhattan real estate. I don't know if he is right or not about the future, but you can't ignore that he was the one person on this board that called the bottom and, more importantly, profited from it.
I don't think rates will impact Manhattan real estate for a long time to come. Anything under 7% is a "good" rate and it will be a long time before we get there. Not to mention that if we do get there, the strength of the economy will more than make up for rate pressure.
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Response by TheTourist
over 12 years ago
Posts: 134
Member since: Apr 2012
@Nah:
New-York and Manhattan in particular are special markets. The city is gaining thousands of inhabitants every year and Manhattan is one of the few on the international scene (foreigners have been pushing the prices for new dev a lot). Also, it is very decently priced compared to these other international scenes, not crazily overpriced at all. Besides, rents are so high that it is cheaper for many people to buy.
What strikes me is that this frenzy occurs at a time where Wall street bonus have been somewhat scaled back.
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Response by huntersburg
over 12 years ago
Posts: 11329
Member since: Nov 2010
>New-York and Manhattan in particular are special markets.
We even have tourists who never leave.
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Response by huntersburg
over 12 years ago
Posts: 11329
Member since: Nov 2010
steveF
about 9 hours ago
Posts: 2009
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Yes I think wages are the last to increase and interest rates are the first. Companies will squeeze everything they can before they are forced to increase wages. First hire than when the labor pool decreases demand for employees sets in and wages increase.
What "wages" are we talking about? People buying $2MM, $3MM and then up apartments aren't earning "wages". You are talking about a totally different market segment to Manhattan. On this issue, I agree with Jason the Retard:
jason10006
about 9 hours ago
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"but I don't think wages are actually increasing."
They are for people who can afford apartments in this price range.
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Response by huntersburg
over 12 years ago
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JuiceMan
about 2 hours ago
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Nah, have a look back a couple years at steveF's posts. He was repeatedly flamed for calling the market bottom and being long Manhattan real estate. I don't know if he is right or not about the future, but you can't ignore that he was the one person on this board that called the bottom and, more importantly, profited from it.
Yes but somewhereelse bought the double long S&P500 on the exact market low, then he sold at the interim high, then he bought again at exactly the right price, then he sold again at an interim high, then he bought at an interim low, then he sold at an interim high, then he bought again at an interim low, then ...
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Response by Riversider
over 12 years ago
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Prices in NY are about as high as they've ever been. So selling back in 08 and waiting to buy on a pull back hasn't worked out so good if you are still waiting.
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Response by huntersburg
over 12 years ago
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So pulling out in 08 didn't work?
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Response by columbiacounty
over 12 years ago
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wow. that's when you pulled out?
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Response by huntersburg
over 12 years ago
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Imagine if your dad pulled out in 1933 what things would be like.
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Response by columbiacounty
over 12 years ago
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did you ever put it back in?
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Response by huntersburg
over 12 years ago
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uh, C0C0, sorry but I'm not your daddy
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Response by columbiacounty
over 12 years ago
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but that's of course not the point.
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Response by huntersburg
over 12 years ago
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C0C0, that was kind of a weak response. You can try again ...
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Response by columbiacounty
over 12 years ago
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now you're giving out grades?
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Response by huntersburg
over 12 years ago
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4 minutes for that?
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Response by columbiacounty
over 12 years ago
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again?
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Response by huntersburg
over 12 years ago
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&?
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Response by columbiacounty
over 12 years ago
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why did you post as greensdale and then stop?
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Response by huntersburg
over 12 years ago
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do you miss greensdale?
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Response by somewhereelse
over 12 years ago
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"Nah, have a look back a couple years at steveF's posts. He was repeatedly flamed for calling the market bottom and being long Manhattan real estate. I don't know if he is right or not about the future, but you can't ignore that he was the one person on this board that called the bottom and, more importantly, profited from it."
Incorrect.
Before the bottom, after years of yelling things were already up (proven untrue by the fact the bottom came later)... Steve publicly announced he was tired of RE and moving into stocks.
So he missed most of the stock runup, but caught some, but missed whatever RE bounce there was off the bottom.
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Response by steveF
over 12 years ago
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Salud to you to Juiceman. You were right there with me.
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Response by aboutready
over 12 years ago
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Actually, no. Juicy is much smarter and has better reasoning than you do. You're just an empty-headed cheerleader.
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Response by huntersburg
over 12 years ago
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2, 4, 6, 8, who do we hate?
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Response by aboutready
over 12 years ago
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You, and truth.
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Response by huntersburg
over 12 years ago
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You hate truth?
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Response by huntersburg
over 12 years ago
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What about justice? Do you hate justice too? (keep in mind that you just won a big windfall settlement in a lawsuit, so ...)
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Response by aboutready
over 12 years ago
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Fuck off.
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Response by huntersburg
over 12 years ago
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No
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Response by huntersburg
over 12 years ago
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AR, do you like light?
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Response by huntersburg
over 12 years ago
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peace? do you like peace?
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Response by huntersburg
over 12 years ago
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How about I summarize what we know so far:
Aboutready:
Truth - Hate
Lawsuits - Like
Light - ?
Peace - ?
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Response by huntersburg
over 12 years ago
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SORRY! That was an unintentional slip.
Aboutready:
Truth - Hate
Justice - Like
Light - ?
Peace - ?
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Response by huntersburg
over 12 years ago
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Thinking this through, I kind of find it hard to believe, Aboutready, that you hate truth. And we've known each other virtually for a while, you know. Maybe you mistyped? Do you hate tooth? You have a bad tooth ache, maybe? Did you bite an olive pit? Do you have British teeth? Are you British? I've heard that the British like to laugh at us and our interest in real estate. Perhaps that's what this is all about?
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Response by huntersburg
over 12 years ago
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Aboutready, how is your tooth feeling this morning? I know it can be tough to sleep with an achey tooth.
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Response by huntersburg
over 12 years ago
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I'm getting concerned that we haven't heard from Aboutready.
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Response by huntersburg
over 12 years ago
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C0lumbia C0unty, are you guys able to get connectivity up there?
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Response by huntersburg
over 12 years ago
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Aboutready was spotted at 720 Greenwich Street! I think that's near the PATH station.
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Response by jsw363
over 12 years ago
Posts: 235
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What I found most surprising about this article on low inventory, which we've heard before, was that a median three-bedroom unit costs $2.63 million in Manhattan and that this is considered non-luxury. Wow. Would Classic Sixes be considered three bedrooms in this comparison? Are they talking about Classic Sevens?
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Response by nymls
over 12 years ago
Posts: 18
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The way I read it is they are talking about any 3 bedroom unit. Even though, looking at the current snapshot of 3-bedrooms in ALL of Manhattan, the price is a little lower. However, if you look at 3 bedrooms on UWS, then the number is pretty close ( based on streeteasy search ):
Real estate for sale
in Upper West Side
We found 37 listings between $1,000,000 and $3,000,000 with at least 3 bedrooms with at least 2 bathrooms
Median price: $2,695,000 Median size: 1,777 ft² Median price per ft²: $1,547
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Response by streakeasy
over 12 years ago
Posts: 323
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low inventory is due to the enormous amount of housing stock sitting in rent subsidy land. Imagine the plethora of options if that stock was allowed off the shelf. two wins, more housing stock and subsidy prisoners out of their apartments for life.
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Response by tsargent
over 12 years ago
Posts: 6
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JSW363 - Generally speaking "Luxury" in Manhattan sales is considered the top 10% of sale values for that particular quarter. It's generally safe to say that number has hovered around $3M for the last 14 months or so.
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Response by somewhereelse
over 12 years ago
Posts: 7435
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"Salud to you to Juiceman. You were right there with me."
Yup, two of the top 3 leaders for completely missing the crash....
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Was just about to post this article and you beat me to it. What's interesting, IMO, is the construction costs per sq foot referenced in the article. Quite a jump from the last run-up.
The economy seems to be slowing down slightly. Mortgage rates are going up. For the lower end properties (and by low end I mean 1 million to 3 million) that does not have the cash buyer, will their prices hold steady/increase or do people think their prices will have to drop?
scarednycgal...the reason why mtg interest rtes are rising is because the economy is much stronger now and the labor market is vastly improved which means incomes are rising which will more than offset the increased monthly cash payments(breathe). The cysle begins again. I think the next 5 years will see increasing prices until developers are able to deliver enough inventory to somewhat satisfy demand.
SteveF....I hope you are right, but I don't think wages are actually increasing.....they seem to be stagnant, and jobs are only coming back very slowly and the jobs that are coming back are part-time jobs. THe rich are definitely doing well. The middle class is getting squeezed, and those are the pool of people for the lower end properties (1million!)
"the reason why mtg interest rtes are rising is because the economy is much stronger now and the labor market is vastly improved which means incomes are rising which will more than offset the increased monthly cash payments(breathe)"
The NY Times might be telling you this but the facts are a lot different. GDP is low and the the recent job report was terrible. Interest rates are rising because the Fed keeps broadcasting they are going to pull away the punchbowl of artificial low rates. I don't think they can ever afford to do that otherwise we would go into a deep recession. Personally, I think we are still in a recession and housing prices and stock market are artificially being held up by these low rates. Once rates continue to rise you'll see housing prices come down again.
Manhattan on the other hand is a different story all together.
agreed with renterjoey -- the recent rate rise was more a normalization of sorts, as the markets adjusted to a future of less fed interference with bond markets. At some point yes, house prices will dip but that doesnt mean a repeat of the last down cycle that came with a surge in credit stress and a massive equity selloff. Its all relative. Looking at housing nationwide, that dip may come after a 20%-30% bouce off the 2009-2010 lows.
"but I don't think wages are actually increasing."
They are for people who can afford apartments in this price range.
Agreed with renterjoey and urbandigs. Steve F is very wrong. I promise you that a segment of the market here in Manhattan will adjust downward in the coming years. Mainly 1-2bdrms currently selling for $1400-$1800 a sf. If you own a 1300sf 2bdrm that you purchased for say, 2.2mm-2.5mm, it will without question be worth around $2mm in the next 5 years. Factor in necessary 8% or more in selling costs, lots of people are going to lose money. A little bit of a crystal ball theory, but I just call it common sense. Oddly, I can't wait for this happen. Factoring in what most have already stated; wages are not increasing, for whatever jobs are available the marketplace is saturated and with rates increasing to 5.5% by mid 2015, many people will have significantly reduced buying power. Maybe it's me, but I feel like everyone else is drunk. Doesn't matter, I couldn't afford a $2mm apt (not even $1mm) in my wildest dream. What I do know is that the type of market we are experiencing is unsustainable. I'm actually shocked by the volume of buyers who are not expressing these same concerns. Then again you could rent a mildly ok 1bdrm for $4500 a month.
Yes I think wages are the last to increase and interest rates are the first. Companies will squeeze everything they can before they are forced to increase wages. First hire than when the labor pool decreases demand for employees sets in and wages increase.
Right now though market psyche is rampant. With articles like the one posted above being the norm buyers must be getting very anxious. Typical human behavior and the cycle begins again.
However it should be fun when every 2bdrm available is $2500 a sf! So if I am wrong (which I generally am) and the market is in fact getting better, then...
Can I borrow someone's balcony for an hour?
In the last 3 months, evry single sell off in treasuries has been kicked off by a positive economic data point. rates will continue to move up as positive economic news comes out. Lets see what happens on tomorrows unemployment number and then next weeks PPI / CPI numbers
So who benefits most from the current market, outside of 100% equity sellers looking to get out of NYC? First time buyers and those looking to bump up are faced with real challenges. And despite quick sales and inflating prices, what do brokers gain from low inventory? How can they thrive with so little to show their clients?
i do have a post in the works titled animal spirits..havent had chance to finish yet, discussing the herd like mentality that has grown over these past 4-5+ months or so. we peaked in may/june, frenzy died a bit, but u wouldnt know it if ur in the field actively bidding for quality property that is priced somehwat right
In response to the above, good brokers prefer markets like 2009 where they can coach customers. Client retention is higher and the overall process is more rewarding for everyone. The only fools (sellers) who don't enjoy markets like 09 are the ones who overpaid in 06-08. Kinda like now. Point is, no one is having a "good time" right now. Brokers are stressed, despite what you read. Granted many brokers are doing single high value transactions, overall volume is down drastically. Most brokers are just flat out lucky right now. There is little skill or talent required in markets like this. I know a broker who just sold a $5mm place, who is a moron and that commission should hold them over for some time. I'll now stand back for those with the "factual" market data that indicates everything is just peachy. Client retention is low right now. Many buyers are pulling out and choosing to rent. Some buyers are working with multiple brokers, which is never a good idea. All it takes is for two brokers to register the same customer to an open house and they're basically blacklisted at that point. With a large pool of buyers no listing agent is going get involved with something like that, cash or not. And for the record, I can't remember the last time I saw a "first-time" buyer.
I'm not implying that there is a $1700 psf floor on RE and clearly one must discount for location, age, condition, etc but I still think it's a compelling metric as a basis for making comparison for resales that are good comps to new development.
Developers are paying about $750 a square foot for
development sites, and construction costs push up the price of
building new projects to as much as $1,700 a square foot,
Gilbert Solomon estimated. In the last boom, the rate for
development sites was $400 to $450 a square foot, she said
sorry, posts got reversed!
Nah - I can add a bit of empirical evidence to your client-retention comment, and I'm a 'first time buyer' though I don't fit the demographic. I've simply stopped looking in earnest, not because I've been priced-out but because I have the option and refuse to skimp through paltry inventory with hundreds of others. It isn't about 'buying now or being priced out forever' .. but simply a lack of available choices.
http://www.townrealestate.com/sale/id-851025/1-York-Street-4F-TriBeCa
Perfect example of what this discussion is about. This is a fantastic apartment and building. Sold at the height of the market in 08 for $2.6mm and resold in 2010 for $2.2mm. I'd argue that once again the current value should be somewhere around that $2.6mm number. If it sells at asking $3.15mm it would need to appreciate to about $3.5mm to break even after brokerage commission, transfer taxes, etc are paid. Based on what we're witnessing in the financial markets, including rising rates, I see this having a hard time being more valuable than $2.5mm-$2.8mm a few years from now.
Tpush is discussing the lack of inventory. Clealry the market is being drive by the lack of supply. To Nah and others that are a bit more bearish, do you anticipate an uptick in inventory? It seems that most investors are currently unloading property that they have held for a few years. So where will new inventory come from?
Just where you said, people unloading their property that they have been holding on to for past few years. Probably a few new developments will also come on the market here and there.
"Agreed with renterjoey and urbandigs. Steve F is very wrong".....lol
Ottawanyc - it's a complex answer. You are correct the market is being driven by the lack of inventory and you ask the question of where will the inventory come from. Put it like this; Urbandigs is absolutely correct that there is a serious herd like mentality and the same applies on the way out. You're right that investors are already offloading their properties. I know many coop owners in Manhattan that should not be owners for one reason or another. My overall feeling is that the lack of inventory has to do with control. Property owners not feeling secure as a renter or whatever else they deal with personally. We're really dipping into psychology now, but all it takes if for one piece of bad news or for a handful of apts to start bucking the trend and selling for a lower p/Psf. I've actually spoken with two entirely separate coop owners this year whom I advise they sell and both in their own way said, no. "It's all I've got" or something like that. They can just get by making mortgage payments and you'd be suprised just how many people are like this in Manhattan. This applies to individuals carrying apts up to $2mm. As for the coop owners I spoke with, I advised they pull any equity they could out of the property and perhaps make a little profit. Take their winnings and leave NYC and live better since both in their own way were stressed and nkt happy. Both, amazingly said "I don't care if this apartment is worth 50% less in 2 years, I'm not selling it now." It's shocking to hear this. Perhaps its a bit of the New York romanticism as well and not wanting to go anywhere else. I don't know, but It's a perfect storm in the making. What happens when you have 200 apartment owners who by their nature are generally not financially savy people? They'll sell at any cost just to rid themselves of whatever it is and this is the same herd like mentality. Just like buyers are competitve on the way in sellers will be just as competitive on the way out. While not on the same level I witnessed in early 09 this was the mentality of many people I spoke with. I know a woman who had a net loss of nearly $185k on a $750k apt. That's substantial. I see this happening again. The only other option for inventory is new construction and there are zero signs tht developers will shift from building only for the top end of the market and rightly so, considering their costs.
Nah, you are new to these boards aren't you??..when you said "very wrong" I got a bit nostalgic is all...
anyhow sorry to say but i disagree with most of what you say.have a great day.
That's fine Steve. The Market is flexed to its furthest most limits at the moment. It's ok to disagree, but I just really wish I could peak into your brain and others for a moment to understand why the possibly of $2500 for pedestrian properties is justifiable. Considering the lack of inventory, that seems to be the direction we're heading.
And no Steve I am not new to the boards. I read them daily. This as of today, stuck a nerve for me. It's like there is this grand party and everyone is drinking copious amounts of liquor and drunk out of their heads about where things are headed.
Urbandigs has a great blog and gives excellent real estate advice but he is no economist. The canard that the fed has been keeping interest rates low is absolutely false. Although the fed has some influence, if it was keeping rates artificially low, we would see an over-heating economy with rampant inflation. Neither of which exists. Moreover, neither Germany, Finland, Holland, nor France for that matter are engaged in QE and yet their interest rates are as low as ours. Finally, if the fed was keeping interest rates artificially low, you would/should see spikes when QE1 and QE2 ended. The opposite happened. Interest rates actually went down. As much as you may roll your eyes, Krugman is absolutely correct that we are in a liquidity trap and cash needs to find a home. Interest rates will only go up on a sustained basis when the economy recovers.
so the fed hasn't been keeping interest rates low. Hmmm.... interesting is that why just the mere mention of tapering off is as well received in the bond market as the Hindenburg? As far as Europe not being engaged in quantitative easing you may want to read this:
http://www.zerohedge.com/news/2013-05-23/europes-quantitative-easing
if it was keeping rates artificially low, we would see an over-heating economy with rampant inflation. Neither of which exists.... no just bubbles look at the housing and stock market.
"Interest rates will only go up on a sustained basis when the economy recovers" or when their is less faith our economy. Take a look at interest rates in Spain or Portugal. Unemployment in Spain is above 20% yet their interest rates are higher than ours. Does that mean their economy has recovered?
I'm sorry but you can't make things up. Interest rates bottomed on April 30th, the fed talk was not until much later in the month in May. While they went up since his talk, we are still talking about less than 50bps. That is a Hindenburg rise? Really? And we are still talking about the 10 year at 2.58% as of this posting, still at historic lows. Moreover, have you seen economic data since then. Weekly jobless claims at 5 year low, PMI at 53.7, ISM Manuf. 55.4, US Cars sold at almost 16mn (back to 2007 levels), housing on fire around the country, commercial rents at highest all time levels. Of course you can find negative economic indicators which is why we still have high unemployment and U-16 levels but the economic improvement is more than enough to justify a 75bps rise in interest rates.
As for Zerohedge, I use to read his blog incessantly. When he began, he presented investable trading ideas, Citibank preferred trade, short local law vs. long UK law sovereign debt, ABX arbitrage, etc... He also broke very important news stories such as the problems with high frequency trading, that JPM was flaunting Fed Res rules with the Whale Trade, and problems with too big to fail. However, for the past two years his site has become a haven for goldbugs, conspiracy theorists, and wackos. He still posts good articles but every single article has a negative spin. As for housing being in a bubble, perhaps. The stock market, who knows although PE levels are not historically high. And I can agree that the fed is inflating these assets but that is by design. I would prefer fiscal stimulus but the Fed is the only game in town and you have to play the cards you are given.
And with all due respect, your last point on Spain and Portugal is plain silly. Interest rates can go up because of inflation or because of credit worthiness. Spain and Portugal clearly have solvency issues but I would submit that if they were out of the Euro, their solvency situation would be solved by the currency devaluation that would immediately occur. Spanish workers would now get paid 1/2 of what German worker would get paid instead of 1 to 1 as it now stands.
The simple demand supply economics of a market where supply is at a 7 year low and there is little to no new development in that price range would suggest to me that we are likely to see some significant price appreciation over the next 12 months. (Look at urbandigs blog to see the inventory plumming new depths each day as more Q1/2 sales close. I'll be intersted to see if the total market falls below 3,900 in time for the post-Labor Day listings).
Beyond that, I would agree that if rates were to increase significantly and supply were to increase significantly as 2005-2008 buyers are able to realize a profit after the friction costs of moving then this would likely cause a pause in appreciation.
However, it takes a very significant event to shift sentiment sufficiently in sellers as well as buyers for property values to start to sink in nominal terms. It is more common for values to stagnate until inflation creates the real depreciation the economics call for. Only if there were to be a renewed global recession and a real fear of a global depression would it be likely that the market were to sink again in the next 1 to 3. Also, I think the market is less sensitive to interest rates than people typically imagine so unless interest rates really spike, I don't think it causes prices to dip vs pause.
Nah, have a look back a couple years at steveF's posts. He was repeatedly flamed for calling the market bottom and being long Manhattan real estate. I don't know if he is right or not about the future, but you can't ignore that he was the one person on this board that called the bottom and, more importantly, profited from it.
I don't think rates will impact Manhattan real estate for a long time to come. Anything under 7% is a "good" rate and it will be a long time before we get there. Not to mention that if we do get there, the strength of the economy will more than make up for rate pressure.
@Nah:
New-York and Manhattan in particular are special markets. The city is gaining thousands of inhabitants every year and Manhattan is one of the few on the international scene (foreigners have been pushing the prices for new dev a lot). Also, it is very decently priced compared to these other international scenes, not crazily overpriced at all. Besides, rents are so high that it is cheaper for many people to buy.
What strikes me is that this frenzy occurs at a time where Wall street bonus have been somewhat scaled back.
>New-York and Manhattan in particular are special markets.
We even have tourists who never leave.
steveF
about 9 hours ago
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Member since: Mar 2008
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Yes I think wages are the last to increase and interest rates are the first. Companies will squeeze everything they can before they are forced to increase wages. First hire than when the labor pool decreases demand for employees sets in and wages increase.
What "wages" are we talking about? People buying $2MM, $3MM and then up apartments aren't earning "wages". You are talking about a totally different market segment to Manhattan. On this issue, I agree with Jason the Retard:
jason10006
about 9 hours ago
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"but I don't think wages are actually increasing."
They are for people who can afford apartments in this price range.
JuiceMan
about 2 hours ago
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Member since: Aug 2007
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Nah, have a look back a couple years at steveF's posts. He was repeatedly flamed for calling the market bottom and being long Manhattan real estate. I don't know if he is right or not about the future, but you can't ignore that he was the one person on this board that called the bottom and, more importantly, profited from it.
Yes but somewhereelse bought the double long S&P500 on the exact market low, then he sold at the interim high, then he bought again at exactly the right price, then he sold again at an interim high, then he bought at an interim low, then he sold at an interim high, then he bought again at an interim low, then ...
Prices in NY are about as high as they've ever been. So selling back in 08 and waiting to buy on a pull back hasn't worked out so good if you are still waiting.
So pulling out in 08 didn't work?
wow. that's when you pulled out?
Imagine if your dad pulled out in 1933 what things would be like.
did you ever put it back in?
uh, C0C0, sorry but I'm not your daddy
but that's of course not the point.
C0C0, that was kind of a weak response. You can try again ...
now you're giving out grades?
4 minutes for that?
again?
&?
why did you post as greensdale and then stop?
do you miss greensdale?
"Nah, have a look back a couple years at steveF's posts. He was repeatedly flamed for calling the market bottom and being long Manhattan real estate. I don't know if he is right or not about the future, but you can't ignore that he was the one person on this board that called the bottom and, more importantly, profited from it."
Incorrect.
Before the bottom, after years of yelling things were already up (proven untrue by the fact the bottom came later)... Steve publicly announced he was tired of RE and moving into stocks.
So he missed most of the stock runup, but caught some, but missed whatever RE bounce there was off the bottom.
Salud to you to Juiceman. You were right there with me.
Actually, no. Juicy is much smarter and has better reasoning than you do. You're just an empty-headed cheerleader.
2, 4, 6, 8, who do we hate?
You, and truth.
You hate truth?
What about justice? Do you hate justice too? (keep in mind that you just won a big windfall settlement in a lawsuit, so ...)
Fuck off.
No
AR, do you like light?
peace? do you like peace?
How about I summarize what we know so far:
Aboutready:
Truth - Hate
Lawsuits - Like
Light - ?
Peace - ?
SORRY! That was an unintentional slip.
Aboutready:
Truth - Hate
Justice - Like
Light - ?
Peace - ?
Thinking this through, I kind of find it hard to believe, Aboutready, that you hate truth. And we've known each other virtually for a while, you know. Maybe you mistyped? Do you hate tooth? You have a bad tooth ache, maybe? Did you bite an olive pit? Do you have British teeth? Are you British? I've heard that the British like to laugh at us and our interest in real estate. Perhaps that's what this is all about?
Aboutready, how is your tooth feeling this morning? I know it can be tough to sleep with an achey tooth.
I'm getting concerned that we haven't heard from Aboutready.
C0lumbia C0unty, are you guys able to get connectivity up there?
Aboutready was spotted at 720 Greenwich Street! I think that's near the PATH station.
What I found most surprising about this article on low inventory, which we've heard before, was that a median three-bedroom unit costs $2.63 million in Manhattan and that this is considered non-luxury. Wow. Would Classic Sixes be considered three bedrooms in this comparison? Are they talking about Classic Sevens?
The way I read it is they are talking about any 3 bedroom unit. Even though, looking at the current snapshot of 3-bedrooms in ALL of Manhattan, the price is a little lower. However, if you look at 3 bedrooms on UWS, then the number is pretty close ( based on streeteasy search ):
Real estate for sale
in Upper West Side
We found 37 listings between $1,000,000 and $3,000,000 with at least 3 bedrooms with at least 2 bathrooms
Median price: $2,695,000 Median size: 1,777 ft² Median price per ft²: $1,547
low inventory is due to the enormous amount of housing stock sitting in rent subsidy land. Imagine the plethora of options if that stock was allowed off the shelf. two wins, more housing stock and subsidy prisoners out of their apartments for life.
JSW363 - Generally speaking "Luxury" in Manhattan sales is considered the top 10% of sale values for that particular quarter. It's generally safe to say that number has hovered around $3M for the last 14 months or so.
"Salud to you to Juiceman. You were right there with me."
Yup, two of the top 3 leaders for completely missing the crash....