Urbandigs: Market continues to improve

What do you call a market where sales are happening only because prices are falling? There are many words. "Improving" isn't one of them.

Interesting that I do not get the same numbers of contract signed in 1 week when I use urbandigs website. I get 176 in Manhattan vs 236 in the video you posted.

George, Would you have prices falling on very little volume?

How does that supply vs demand thing work again?

I see these rabid Trump supporters posting on Facebook about how great the economy is doing because of GDP growth. Relative to when? Any comparisons to lockdown are a straw man argument. It's like saying how great the weather was today because relative to last night it was sunny out.

30, We are just discussing factual numbers. Can we leave politics out of it? Of course De Blasio next mayor is a fair game to discuss.

Why is DeBlasio/mayor OK, but not Trump/president?

Deblasio / NYC mayor directly impacts quality of life, policing, for NYC and hence real estate.

And education.

Nada, Separately, any take on the numbers?

I will add that upper end say >$4mm is still slow.

Downtown is better than UES/UWS.

Downtown ex Fidi of course.

No take on the numbers.

Trump / president directly affects it too. Protests, drug epidemic, tax changes, pandemic policy, etc.

+1 on Presidential race affecting NYC, but with respect to anyone who disagrees on this, discussion is pointless. When I find myself thinking in any discussion "get smarter!" I know it's time to bow out.

(No take on the numbers because I don’t much follow / care about the sales market directly.)

If Democrats manage a trifecta, which seems like a plausible outcome at this point, that’d probably be a net positive for NY real estate because it’d open up:

1) Return of income tax deduction
2) Return of real estate tax reduction
3) Budget support during pandemic

I think Federal tax policies are worthy of its own thread. Do not forget the proposed Social Security over $400k and higher capital tax gain on >1mm income.

Funny. The video prompted me to look at a watchlist of post-COVID listings I’ve been keeping since June, to see how many have gone into contract.

Answer: the vast majority (~90%) are still listed, most with price reductions.

Yep, sounds like a seller’s market.

300,
Nice way of totally ignoring the content of my post and claiming it's political to obfuscate the mathematical implications.

30, If you watch the video, supply increase has slowed down and contracts have increased. If you remember from the old thread only a couple of weeks back, I said that we can not call the market is good till the time resales market pulse is 35 percent. We were 21 percent that time and are 24 percent now. You can call it what you like.

yourname, Post a few of those listing for entertainment. Thanks.

If blue sweep leads to NY budget bailout and repeal of SALT cap, that’s going to be a huge support to NYC real estate levels. Could time well with a rush back to the city for people being called back into the office next spring/summer.

Yeah, so by your own numbers it's still decidedly "not good," and I'll add that 35% still isn't "good."

Looking at supply vs demand:
In October 2009 we had approximately the same supply (not counting the ?5,000? in New Development shadow inventory) and 1019 signed contracts. This month we've had 869 signed contracts. So if you want to argue the market is only 15% worse than it was in 2009 then knock yourself out.

That is a fair opinion backed by numbers coming from self proclaimed bigger bear on NYC real estate.

Listing for your entertainment, 300. West Village, sold for $6.75M in 2010, attempted $12M/$13M in 2016/2017, been sitting at $7M since May. Know nothing about the listing, just saw it came for rent today in a sign of the times.

https://streeteasy.com/building/385-west-12-street-new_york/sale/1432366

Ha. Windowless basement space included in square footage and you pay maintenance and taxes on that. Shitty building exterior. They need to find a real sucker.

Very bad project vision by the developer. If you say useful square footage is 3000 sq ft, you are paying $5 in maintenance and taxes for living on street level.

For those of you who took offense to the word 'improving', you may substitute that for 'less bad' ; )

Happy Halloween! The only day when wearing a mask is fun!

Keith, Stop being offensive!!!

300 - here's an example

https://streeteasy.com/building/200-east-78-street-new_york/11c

So needs new floors in the bedrooms (perhaps full apartment) and updating of baths (new vanity, shower enclosure, potentially retiling). Kitchen seems ok. Do not see where the washer dryer is. I think with $100-$150k spruce up including painting etc (no moving walls) it could be very nice.

Current prices seems fair unless coop is difficult.

Current price is lower than 2005 price; ouch.

385 W 12th: Ugh, but I do like the wild marble in the bathroom.

200 E 78th St: Overall a nice apartment that would be easy to fluff up (assuming reasonable board). I do wish the broker would stop fooling with 'alternate' floorplans until they get the current or original one correct. I'm particularly liking the lack of access to one of the bathrooms.

This Is one of my near ideal floorplans: good private master bedroom area, a 2nd BR that could be opened to the LR as a library, and that WIC could be a little WFH area. Having that foyer space does take away from the LR a bit, but gives you a sense of having a separate entry and makes the space more interesting (rather than just opening the front door into a view of the entire LR. If I were in the market (maybe next year...) I'd go look at it.

Ha. I noticed the lack of access to second bath. I agree 78th street is a good value unless coop board is difficult and wants 50% down and 1x value as liquidity.

Really don't like that kitchen - both the dead ending of it and the doorway in the middle impacting flow.

Sorry, didn't realise dead ending was only proposed. But still don't like it.

30, At least the stove has room on both sides!!

Here's a link to the first coronavirus update from Urbandigs. Many thanks to Noah and John for putting these videos together and keeping us all informed.

https://youtu.be/rq8jfPGWaBY

And this gives you some good contrast to what happened to the market approximately six weeks after the first update. 51 contracts were signed that week according to Urbandigs.

It's interesting to have this digital record of market activity through the various stages of coronavirus New York City.

https://youtu.be/bAGpS5G7vWM

So I guess it's just like last Fall when it was an amazing opportunity to buy Real Estate?

Worth noting that the price on the 200 E 78th apt was reduced in September, ostensibly when the market was starting to “rebound”, only to need another dramatic price cut in October. As multicityresident noted, to below 2005 levels.

It’s a perfectly nice apartment, representative of the UES. And there are many others still sitting on the market with it. And more coming on the market.

Noah and Keith’s cheerleading would be more credible if it weren’t so generic. Without granularity, those sorts of general proclamations add little value. Clearly the UES is hurting bad, as is the UWS. Brooklyn is holding up. Downtown I’m less familiar with.

Yourname, This is a good example of poor market conditions on UES. Do you mind posting a couple more? Just for a fun and informative discussion.

Btw, if you are in the market and qualify, I would jump on 200 east 78th.

May I add that those beams may be fake as it is a white brick post war.

It's not so much cheerleading which is a bit of a strong word. It's simply presenting current data.

If you'd like to break down the market into segments you can certainly do that through Urbandigs website, Miller Samuels data.

I'm just a broker with boots on the ground reporting what I'm experiencing. Take that with a grain of salt, but it is also verifiable through our website for people wondering about actual deals taking place in real time by an individual broker. We also have 4 newly accepted offers : two townhomes in Brooklyn, a two bedroom two bath on the upper west side (West 74th Street), a unit at Astor Terrace. Hopefully you'll see these on our website soon.

http://www.theburkhardtgroup.com/transactions

We're in a deep rooted buyers market.

I'm not sure I would categorize the Brooklyn townhouse market as a buyer's market, like all of New York City everything is neighborhood centric. For townhouse buyers in neighborhoods like Bed Stuy it becomes very block-centric. In general Prices are reflective of the different neighborhoods as well as the qualities of different properties. For instance large homes with outdoor space are very popular right now.

I don't make predictions, I try to react to the present moment and make decisions based on that. Also just to reiterate, clients come to us after they've already determined they'd like to purchase a property. We don't advertise, we are 100% referral-based. We're not out on the street grabbing people and telling them you have to buy now!!!

So when they want to buy and ask us for help we assist them. For those that don't know us here's a little snapshot into how we work;

We don't get involved with the search part of the process. We found the clients that call us are not interested in this they're capable of searching for properties that fit their requirements on their own. quite often they have a number of complaints about this process with other brokers they work with.

We're never trying to sell to anyone, after viewings we don't follow up with our clients. If they have a question or need our assistance they get in touch with us. Of course we will share all communications from listing agents with them.

We share all email communications in general with our clients. Whether or not they want to read them, that's up to them. We like working in total transparency, and I can tell you that our clients appreciate it.

When a client finds a property they would like to bid on they share it with us and we provide them with a fairly rigorous analysis of the property. Which will include searches of the department of finance, and departments of building to verify various information about the property, including use, taxes, violations, open permits and information regarding any tax abatement. And of course an opinion on valuation. We then discuss.

And of course since I'm the broker and don't have to share my commission with a large firm, I rebate a portion to my client. $2.5M purchase, $50k rebated/3% commission.

Full board package preparation.

There are a number of other unique functions to our model as well. Of course we're doing all scheduling and under normal circumstances accompanying our clients to all private showings.

We also have a pretty attractive model for sellers, that's full service and has proven itself to be effective.

So this is what we do. It's not for everybody but it works quite well for many. Whether you like our model or you don't, I think you've got to agree it's nice to have choices.

Just a little insight into what we do and how we operate. We haven't reinvented The brokerage model but I think we've added some nice tweaks to it. There's certainly a bit more to it as my initial phone calls with new clients take about an hour.

Keith Burkhardt
Keith

Take a look at 2C which is also on the market to get an idea of what beams can stay and which can go. Also note the 'divided' kitchen -- looks like it was originally a separate 'pantry' or storage -- I think 2C did the right thing by putting all the functional kitchen stuff in the kitchen space, and leaving the pantry separate -- but it is a bit of a challenge, but one I could live with, particularly given that the updated alternative is to have the whole thing open to the LR. Given the presence of 2C on the market, it would get down to whether you wanted a little terrace on a lower floor, and how much reno you thought you needed.

It's not a 50% down building but it is a 30% down building..

Keith: do you mind sharing where your clients' accepted offers are landing vs. historical pricing for those units?

The fact that there are transactions happening is certainly better news, but I'm curious at what price. The majority of listings I've seen out there still seem completely out of line with the current market. It's as if the pandemic never happened in some people's minds.

Thoth, This is from Fritz Frigam report as of August 15th when things were worse than now. Does not seem like it includes new developments due to low average price.

Manhattan – all offers in the survey (128)

9.52% - percentage of average offer below the average ask price in the survey
$187,838 – average difference between average offer and average last ask price
$1,604,081 – average asking price in the survey
$1,416,243 – average offer in the survey

Manhattan – all ACCEPTED offers in the survey (56)

5.65% - average difference between offers and last ask prices that sellers ACCEPTED
$87,041 – average dollar value between offers and ask prices that were ACCEPTED
$1,301,507 – average last asking price of the properties where offers were ACCEPTED
$1,214,466 – average offer that was ACCEPTED by the sellers

Manhattan – all REJECTED offers in the survey (72)

12.52% - average difference between offers and last ask prices that sellers REJECTED
$266,236 – average dollar value between offers and ask prices that were REJECTED
$1,839,417 – average last asking price of the properties where offers were REJECTED
$1,573,181 – average offer that was REJECTED by the sellers

At this hour, while a number of key battleground states remain undecided, the betting odds are moving increasingly in Trump’s favor to retain the presidency. Not only that, the GOP is leading in key Senate fights and looks likely to hold the majority.

I had been thinking/hoping that a Dem sweep would lead to a larger stimulus package that would include aid to the states. And that the SALT deduction would be reinstated. That looks unlikely now.

This is important. It will affect NYC and NYS disproportionately. Without Federal help, the city and state will have no choice but to raise taxes and slash services.

Ugh

At this point (it looks like we won't know for days) it looks like a Dem Presidency and a Republican Senate.

Thoth-you can look at our closed listings and compare it to the asking price. Everything is accurate on our website, though there might be a lag with adding new contracts and moving some deals over to closed.

Keith Burkhardt
TBG

https://www.brickunderground.com/sell/urbandigs-manhattan-brooklyn-co-op-condo-house-sellers-taking-loss-pandemic-nyc

It's nice to know that 75% of sellers made money according to that article in brick Underground.
Here's what's happening presently:

https://youtu.be/k1EoozeQIaI

In case you don't want to read the whole article:

"The contracts seeing a loss were mostly signed for apartments bought at the last market peak in 2014. However, as Walkup points out, a far greater number, 75 percent, signed contracts for a gain. The average increase was 34 percent, with properties below $2 million showing the most gains. Most apartments that saw a profit were bought in 2011, after the credit crisis and before the market peaked."

I continue to assert that unless someone in 2011 had a ton of leverage, which wasn't generally possible back then, it would have been far better to put the $$ in liquid equities. Stocks have trebeled since 2011, while very little real estate has.

@Keith / 300 / 30Y - Thanks for your responses. 30Y's article had the type of data that I was looking for.

Keith, that article is actually not that positive. It basically says that people who managed to buy real estate during the last bottom made money. That's not a very surprising conclusion. The article also identifies the last peak as 2014, when the SE price index says it was 2017-2018. This means people who bought in 2014 were not even buying at the peak, and many of them have lost money. What's also the case is that 2009, 2008, and parts of 2007 in the index were just as high as 2014, so people who bought before 2010 aren't safe either. If anything, this is a warning that buying NY RE unless it's near a cyclical low has been risky for over a decade.

One thing they left out is that for first time post COVID the number of "off market" has risen to be roughly equal to the number of contracts signed for the week. This means if you put your apartment on the market you are about as likely to have it leave the market because you gave up trying as to get a deal to sell it.

I think this is evidence that while many are selling BECAUSE they have admitted prices are down and succumbed to the market and equal amount can't deal with what prices have reduced to.

In the meantime, digs market pulse went to 34%. Still worse than last year with off-market similar to last year but a major improvement from 20% ish level we saw. Can it hold up despite Covid spike?

Mansion Global: Manhattan Sees Impressive 23 Luxury Sales in Usually Slow Season.
https://www.mansionglobal.com/articles/manhattan-sees-impressive-23-luxury-sales-in-usually-slow-season-222013

No sleep till Brooklyn...

The Real Deal: $50M worth of Brooklyn luxury deals inked last week.
https://therealdeal.com/2020/12/14/50m-worth-of-brooklyn-luxury-deals-inked-last-week/

I don't want to be tooting my own horn, and I know this market is supposed to suck... There haven't been that many years where I've had 19 deals in contract going into the new year. Have a look if you'd like to see what people are buying from the perspective of a lowly broker;

http://www.theburkhardtgroup.com/transactions

We also have three current deals, including a beautiful brownstone in Brooklyn working their way through due diligence.

Keith
TBG

Keith, But.... ................................., but................................, but.................... I will let the bears fill in the blanks. I do think that there may be slow down in activity for one/two months with Covid spike.

And thank you for sharing what you were seeing the a couple of months back before we started to see it in numbers.

I'm bearish on Manhattan south of 96th. I've never denied that Brooklyn is doing better. Indeed, with Manhattan increasingly looking like a giant but expensive suburb (how many non-chains are on Union Square today?), it makes sense that people would seek out Brooklyn.

George, What do you think of increased transaction volume in Manhattan and 34% market pulse vs 21 percent 6 weeks back?

I’d agree from my own building in Brooklyn, sales have picked up.
After 0 sales for 12-18mos, we’ve had 3 close/go into contract since September.
However they are closing at prices below their 2016-2018 cost basis, so not exactly a great story.

Steve, If it is newish high-rise condo, decline is to be expected even in BK.

I would only add that Brooklyn has been a solid borough for quite some time. Yes, there was a time many people moved to Brooklyn because they couldn't afford Manhattan. But it's been at least 15+ years since Brooklyn has been a thriving and completely independent and strong market. It also held up much better after the 2008 financial crisis, which surprised many people.

Of course saying Brooklyn was recently discovered is like saying Columbus discovered America.... Friends and family that have lived in Brooklyn since the fifties always knew it was a gem!

All I've been trying to say is I've seen this before, maybe not exactly a global pandemic, but serious disruptions to the marketplace. Somehow things always get better, improve and even change. Sure theres still going to be some significant pain to work through, certainly not just in New York, but globally. However once this virus is in the rear view mirror, what will be holding back New York? In my experience, we see some of the greatest opportunities during the rebuilding process.

Keith
TBG

@steve123 how many units were for sale over that 18-month period that didn't find a buyer? That's a bit unusual, the first half of that 18-month period wasn't blockbuster for Brooklyn, but sales were happening at a fairly regular clip.

@300 - Newish, yeah so not totally shocked they lost money holding new construction less than 5 years..

@Keith -
~70 unit condo
4 sales in 2019
0 sales Sept 2019 - Sept 2020
3 now closing/in contract, 3 taken off market and rented instead.. know a couple more neighbors seeing above didn’t list for sale and became “accidental landlords” for 2020-2021

Should be interesting to see how 2021 looks

Thanks Steve. There is new condo premium in initial pricing even in non-ultraluxury. I fully expect typical large development full service new condo to underperform the market by 5-10% first 5 years or purchase. The ones which are tax abated, even more.

What's interesting is the mix:

Market Pulse / YoY Change
Overall: 0.34 / -8.1%
Existing: 0.34 / -15%
New: 0.36 / +38.5%

I guess a -8.1% YoY in market pulse could be considered positive when you were dealing with much worse numbers before. What's interesting is that ND was seen as the problem sector before, and that is the sector showing signs of life (Supply -17%, Pending Sales +13.5%). Of course, as I'm sure 30Y will undoubtedly point out, that ND pulse number is likely misleading because it doesn't account for a huge chunk of shadow inventory. Existing is more worrisome. While Sales are up +15.5%, Supply is up even more at +34.4%.

But setting all of that aside, the real question is: at what price are these units selling?

Ignore new development. It is a meaningless number as most of the inventory is not listed. Start of closing in a new development can completely change the numbers with no real change happening. But some how people want to use it.

Yourname, If you are still reading, what do you see? Post a couple for fun.

"The video prompted me to look at a watchlist of post-COVID listings I’ve been keeping since June, to see how many have gone into contract."

300 - I started my watchlist during the spring. Some of the properties were listed pre-Covid, others during Covid. I have recently been focused on buying a vacation property so haven't been diligent about adding new listings. The median days on market for my list is 151.

In any event, of the 28 properties on my list (UES and UWS), 14 are still listed, 6 are in contract, 6 are "off market" or delisted and 2 are now rentals. The ones that went into contract ALL did so in November except one on 12/2 and none since then. So the flurry of signings looks to have been concentrated almost entirely in November.

Thanks. Please post a couple of links for entertainment.

Did November correspond with vaccine headlines? Buyers thinking market will go back to normal and rushed to close, while many other buyers taook a pause?

The market is reflecting both physical and financial conditions, so the question is... which consideration has the upper hand, and when?

In NYC today, the seven-day average of positive tests is up to 5.1%. I don't know about others, but that means I've cut back my use of transit again. Meanwhile, bonuses are going to start coming in, and it sounds like they'll be fine.

So presumably for Manhattan, the next couple of months will be like early summer -- the deals going into contract will be legacy deals based on showings that have already happened.

That should register in the numbers as "slow" -- but I don't necessarily think it's a bearish indicator long-term. I for one think that market will come back in the spring as it becomes safer and safer to go back outside. The bonus spending may be deferred, but I believe we'll see it.

ali r.
upstairs realty

Yes I would guess that November delivered a burst of optimism. Vaccine, election results, etc.

My guess is that as more people are vaccinated, more offices/restaurants/etc. reopen, the atmosphere will improve dramatically and apartment demand will return ahead of NYC's "full normal". You might get a surge of buyers rushing to get in "before the Covid discount disappears", which will of course be self-fulfilling.

In my mind, the wild cards here are (1) taxes and (2) crime. We'll know more about (1) soon enough and (2) during the mayoral election race. These are big.

Since we're using some small sample sizes, December has been decent for us. That said, I think we can all agree that December is typically a slow month. Let's see what the urbandigs report turns up on Friday.

Let us not forget lower rates, 5-10% lower prices vs pre-covid, pent up demand due to a lack of activity during summer, and more people being back in the city starting September, as the biggest factors driving post-summer demand. Combination of first two increases affordability by 10-15%. Low rents are not going to stay for ever.

I missed a major wild card. And that's the oft-discussed stickiness of the work-from-home trend.

Personally, I will relocate to our second home and make it my primary. WFH works great for me and I don't need the office. But I will keep one foot in NYC.

Many, many people have discovered that WFH (or WFE - "Elsewhere") is a truly viable and preferable option. In fact, when I really think about it, I know few people who are dying to get back to the office. And many people, unlike me, will not need/want to keep a foot in NYC.

The latest indication that this is more than a hiccup is Moelis' decision to permanently allow their bankers to WFE. Just the beginning.

This really changes so much.

For incentive driven and measurable performance, work for home may work but I have experienced in the service industry, the efficiency of people working from home is down drastically. They just do not pick up the phone and their boss is not watching if they are working. Rich people also want other rich people around them for net-working and socializing. Till the time elsewhere develops critical mass, it is a hard choice. Many people may have hit the top of the market in elsewhere and prices may go down once corona fear is over and taxes there will go up and people for coasts go there and vote for center-left politicians who will increase taxes.

I think there are structural issues that will allow lower tax states to maintain that advantage for quite some time, including the absence of union strongholds, no crippling pension overhang and the fact that low-tax jurisdictions attract higher population/revenue growth.

Not to mention, many of these states have better weather, are cleaner, are building out cultural institutions, are generally safe and are not looking to reform their police.

I don't think FL, TX, NC, AZ, NV, etc., are going to be worried anytime soon about losing people to NY.

Is there another variable: people don't want to live in NJ or CT either. The flight is not just from NY, but from the entire MSA. Were any of these people in NJ/CT sources of demand for prior NYC "bounce backs"?

And digs resale market pulse is 36%. Not sure it stays there with COVID increase but it definitely kicked naysayers ass when Keith and I were saying the market is improving.

Depends on what you mean by "improving". Not sure it's "kicking ass" to highlight that there would be some sort of rebound off of a cyclical bottom. Just looking at how the general atmosphere in NYC has changed from March to December would have led to the same conclusion.

I hate to sound like a broken record, but the key question is at what price are these deals closing? SE's price index for October 2020 was down to 2013/2014 levels. The lag in price discovery in RE is incredibly frustrating.

I am simply talking market conditions with a good measure being Market Pulse. Prices are certainly higher than what you could have gotten in June-August. Ask mouse. Will they stay higher, I do not know.

"30, If you watch the video, supply increase has slowed down and contracts have increased. If you remember from the old thread only a couple of weeks back, I said that we can not call the market is good till the time resales market pulse is 35 percent. We were 21 percent that time and are 24 percent now. You can call it what you like."

The debate was specifically about market pulse as you can see from my comment above.

"Prices are certainly higher than what you could have gotten in June-August."

But you don't know that. That's my point - no one knows because there's no data until transactions start getting recorded a few months down the line. As the old cliche goes, the plural of anecdote is not data.

"the plural of anecdote is not data" -- yes, and no, thoth. Brokers and attorneys have always dealt in a kind of "what's it in contract for"-type gossip. During PAUSE, this became a little more widespread, and there was more of an effort by all parties to share what info we had -- just so we could keep making the market. if you're watching the aggregate closed prices just for sport then yes, you adapt to the lag, but if you're actively involved in a particular submarket, then at least one person on your team better have an idea of what contract prices are looking like.

I do know the data before it is going to show in up in an index like SE condo index as I analyze it at a transaction level as a part of my micro size redevelopment business, by bidding on properties and comparing notes with people in the industry. For any buyer, good luck getting the deal you could have gotten in June-July and the reason is obvious (there was panic selling). Can I provide a forward looking view from here on prices? No.

To be clear, I do not look at data for all locations and price points but the coverage is not anecdotal either.

Try getting this deal.
https://streeteasy.com/sale/1446957

or this
https://streeteasy.com/closing/10763778

Let's go to the video tape and the data;
https://youtu.be/weJv6-E8LIo

We now have 22 deals in contract, and now I know why.... We continue to see positive trends right through the end of the year....

Keith Burkhardt
TBG

Some interesting commentary from Sam Zell;

https://markets.businessinsider.com/currencies/news/billionaire-investor-sam-zell-questions-tesla-bitcoin-work-from-home-2020-12-1029910959

I'm an out of work finance professional. I'm not an investment banker - I'm in compliance & risk management. I'm trying my hardest to stay here, as I've lived here most of my life - but I don't know if that will be possible.

At one bank roles I apply to are advertised as being in NYC, but when I reach interview stage the roles turn out to be in FL. This firm is not alone, I'm also seeing this bait and switch tactic with other firms, with roles turning out to be in IA, MN, NC and TX. Colleagues of mine are being told to relocate or face unemployment.

This doesn't square with the optimism shown in here - probably a sign that this so-called recovery is completely K-shaped, with the bottom falling out for a lot of New Yorkers while a small slice rides to new highs.