Urbandigs: Market continues to improve -Mar 23

Thank you.

Listed in September @$7,500,000
Price drop to $7,100,000 November
Closed $6,250,000.00 February
https://streeteasy.com/building/130-west-12-street-new_york/1c2c

Seems like activity being driven by discounts.

Here's a nice price drop on a former celebrity property (aspirational pricing still a disaster).
https://streeteasy.com/building/20-east-20-street-new_york/loft-3
https://streeteasy.com/building/20-east-20-street-new_york/23-floor

agree with 30yrs, discounts driving the recovery. Had podcast with Daniel Gershburg attormey today, he said discounts for deals waiting to be signed are disappearing

Noah, Are you trying to convert 30 to bullish side?

A sale we did last August in Brooklyn:

https://streeteasy.com/building/524-manhattan-avenue-brooklyn/2b

RECORDED SALE
$1,320,000
Sold on 10/8/2020
Sale verified by closing records
Last listed for $1,299,000

Purchased 2011 $738,221

We also sold 1B there a few months ago. And currently have 4b listed, I Believe Christian did close to 50 showings over the course of about 4 days. We received 9 offers and are sending out a contract today. All this was achieved with brokerage Commission ranging from 2.5% (there was no buyer agents) to 3.75%, which is the maximum commission we charge.

In my opinion, getting the price correct is 75% of getting the sale done. Of course the other 25% is also very important, no need to go into that here.

If you're actually a buyer/agent in Brooklyn, you know how active the market is right now. If you're just sitting behind your keyboard speculating, you may not be getting the full picture. We're typically working with about 40 active clients, about a third of our businesses is in Brooklyn.

It's been very difficult getting deals done on many of the properties we're bidding on. Most are attracting multiple bids, ask 300, I believe he recently went to some open houses in Brooklyn? It's not on every property, but it's on many.

Love to hear from some people who are actually actively shopping for a home in Brooklyn.

Keith
TBG

I am not actively shopping in Brooklyn since I will be carried out of my current home in a pine box, but I went for a long walk in Brooklyn Bridge Park a couple days ago with the agent who helped me buy my apartment. The past six to nine months have been the busiest of her career, and she is seeing her listings from 1 BRs to townhouses fly off the shelves with multiple bids.

I have been venturing out a bit more in BK. Area around Barclays center in all directions is crazy hot and is developing amenities fast. New condo developments a little tougher but prices have come down.

The Real Deal: Manhattan’s luxury market continues 7-week contract streak.
https://therealdeal.com/2021/03/24/manhattans-luxury-market-continues-7-week-contract-streak/

Good for you NYC!!!

Keith, If you cheer NYC revival too much, young adults living with their parents with come after you as they were hoping for destruction of nyc so that they can buy something.

LOL 300. Along those lines, I'm in the new American terminal at LaGuardia now, and they had a sound and light show about all the awesome attractions NYC has to offer projected onto the fountain. It got me into a totally bullish mood; New York's demise as a world class city has been greatly exaggerated, a few bad quarters notwithstanding. There's also a decent size crowd moving through the terminal today, and I don't even think of New York as a major spring break destination. I think if vaccinations continue at the current pace, entertainment and hospitality can really make a comeback by Labor Day, and the pent up demand will be considerable.

Thank you doc for understanding where I am coming from. Scientists, medical professionals and logistics personnel has sacrificed so much to get us vaccine. I do not understand why people aren't thankful for what everyone involved - including even politicians - in the vaccine effort has done.

I haven’t been on for awhile; I must have missed those posts where people haven’t been appreciative of all the work that so many have put into the vaccine effort. For example, stache has multiple posts on another thread where he highlights and applauds the vaccine efforts. Can anyone point me to a foundation for 300_mercer’s implication that people are not appreciative? Did I miss a link he might have posted to NYPost fear-mongering?

Keith>> The Real Deal: Manhattan’s luxury market continues 7-week contract streak.

Actual article>> Last week’s average listing discount was 11 percent from initial ask to final ask with an average period of 588 days on the market.

Inonada>> Oh dear....

"The Real Deal: Manhattan’s luxury market continues 7-week contract streak."

Nada-that's the title the real deal gave the article.

There is some thing to be happy for bulls and bears in the luxury report. I always thought ask for anything over $10mm is completely made up - pulled out of broker's asses (add your adjective). We have discussed some listings for townhouses where I thought the transaction price should be more than 25%+ less than ask even closer to 50% off. In any case, average discount to ask is 7.8% for all categories up to Feb. I am surprised that luxury segment discount is not much higher than 11%.

I know Nada does not care about what happens to prices beside out bet on SE price index as he likes to get great rental deals in Ultra-luxury segments, but market pulse of 58 must be making bears very upset. Adults, who have failed to launch so far, and are living with their parents in the fancy parts of town dying to move out must be even angrier.

Here's one thing I don't really get.

Why do some people here conflate NYC's demise vs. flourishing with the price of its RE? I think we all can agree that NYC has flourished over the past decade, putting aside the COVID period. On the other hand, look at SE's indices of same-home resales across all the boroughs. There is no COVID drop, you cannot even identify COVID from a blip on the charts or a change in slope. It's just a long slog of what began years ago.

All boroughs are below 2008 prices. Manhattan is a mere 10% higher than even its post-2008 bottom, which is a sorry state of affairs as far as RE prices go. From the cherry-picked bottom, only 1% per year, trailing inflation. Pre-COVID was the pretty much the same story. Yet Manhattan flourished just fine.

The past decade shows that NYC can flourish, but RE prices can take it in the shorts. So why the conflation? Is there nothing more to NYC that the prices of its RE?

This thread is reminding me an awful lot of this one from 7 mos. ago: https://streeteasy.com/talk/discussion/45961-back-from-aspen-to-wonderland

As for prices of NY real estate, I believe they are still quite ripe for anyone living in their parents' basement to make a move should they be committed to NYC for the long haul and will be for quite some time, pollyannish talk tracks repeated ad nauseum notwithstanding.

NYC was and always will be a great city, regardless of real estate valuation/Dow average, these measures do not affect the core values and heart of this great City!

From someone who has been visiting (family) since the early 70's (actually mid-60s, but of course I was a baby!) and lived here full-time, 1982-2012, raised and sent kids to public schools, through high School (son did do a stint in private high school). Just my opinion of course...

It's certainly also relative to when you bought, how you did on an individual basis. Perhaps this could be viewed as cherry picking, just happens to be a sale we did recently.

A sale we did last August in Brooklyn:

https://streeteasy.com/building/524-manhattan-avenue-brooklyn/2b

RECORDED SALE
$1,320,000
Sold on 10/8/2020
Sale verified by closing records
Last listed for $1,299,000

Purchased 2011 $738,221

Here's a great book with some really fantastic black and white photos of New York from around 1981 to 1983. And yes that's yours truly on the cover.

Don't let it scare you, just as I disrupted a stagnant real estate model with truly negotiable commissions and rebates etc. I also disrupted the early punk rock scene, I was a vaishnav (my Indian body friends will get that), drug and alcohol free and only ate plants, and I've been living this way since I was 17.

I'm very proud of what we created with real estate. But most proud of all the kids that I was able to help, and still write me letters for presenting a way to live your life in a positive manner without falling into the various traps that disenfranchised youth often do.

Just thought I had to add a little context to the sort of jarring photo. Really wonderful photographs though if you're into New York City music history. Remember this is the scene that also spawned the Beastie Boys, a band we used to play with when the only record they had out was called pollywog stew.

https://newnoisemagazine.com/book-review-photos-by-ran-d/

Thanks for sharing that Keith.

The corner of 7th and A always takes me back to that time. What a scene.

Keith, That is before my time but very interesting. Glad you were able to make a difference to the kids life.

In the meantime, bite the ass off bear volume continues. 341 humpty dumpty contracts.

https://www.youtube.com/watch?v=kr02G8mu5O8

There are no bad times to buy, just bad prices. Looking at the SE price index for Manhattan:

1. Most recent data indicates continued decline in Feb 2021.

2. We are almost back to 1/2014 levels or 9/1/2007 levels, depending on which way you look at it.

The index aside, some observations and opinions on my end:

If there's lots of market activity, perhaps that just means prices are finally at a point that makes economic sense for more people. I don't know whether that's bearish or bullish, but rather more rational.

There seems to be major differences across markets. Prime markets seem to be doing quite well. Some smaller, edge markets are not. For example, I like to keep an eye on FiDi condos as an edge market, since they had a massive jump during the last peak, and they aren't doing nearly as well. Most of the transactions seem to be at major discounts vs. even recent comps (let alone the peak), and many units that have taken haircuts still aren't moving. On the other hand, well priced units in the UWS seem to get snatched up pretty quickly.

I agree with Nada that people conflate a city doing well with high real estate prices. I suspect that high real estate prices don't correlate nearly as much with quality of life as people think. In fact, I would bet very high price growth actually causes more harm to quality of life than it helps.

I think your observations are generally correct. What you are seeing in Feb 21 index is Nov/Dec contracts. Current contracts will show up in June index.

Fringe markets specially FIDI has gotten destroyed - narrow streets, tall buildings, a lot of new supply, tax abatement expiring, full taxes rather high, never became the hood it was promised etc. Discount buyers went to BK. Rberg here got a great deal in FIDI in Dec.

Prime markets indeed are booming. I have seen a renovated sale in my building in Greenwich village at least 10% higher than what I would have thought possible in 2014/5 but we are $1500-$1800 per sq ft building.

High $ per sq ft combined with high absolute $ (call it $10mm) remains fairly weak due to high-end new developments.

On correlation of real estate and Manhattan, real estate pays a big percentage of taxes including in transaction taxes. Increase in real estate taxes has been a big factor in keeping the city afloat despite ever increasing budget and putting a lid on property prices.

https://comptroller.nyc.gov/reports/annual-state-of-the-citys-economy-and-finances/

300: In my view, that's an entirely different issue. I don't know how "good" it is that NYC is fiscally mismanaged and has been able to partially keep kicking the can down the road thanks to real estate taxes. One could argue the reverse, that this is a palliative that has allowed the city to continue living in an unsustainable fashion vs. fixing the problem early on.

Indeed and there is no solution for that. The best one can hope is efficient utilization of taxes.

Well, there is a "solution" but it involves massive pain when the money finally runs out. See: Detroit, Stockton, San Bernardino, et al.

I do not see that happening any time soon (call it next 15 years) as the jobs are still here and suburbs are not in a better situation fiscally. Big picture, US also has overspending issues relative to revenue with both parties running up deficits.

Agree that the feds also have this issue.

The fiscal situation of the suburbs depends on the particular suburb. NYS is better off than NJ and CT (NJ is in much bigger trouble than people realize). NYS is also better off than NYC. I don't know enough about any individual suburb's local finances, but of course that's another piece of this puzzle.

I also don't know the right timeline, but agree very low odds for the next 10 years, unless some random external factor hits New York.

The frustrating part, though, is the fact that these blow-ups could all have been avoided. Everyone knew they were coming, and early action would have saved a lot of pain. The longer they run, the worse they are.

Great to see activity in NYC real estate market!
Best city in the world!

Ha. Voters wants freebies rather than be happy with extended unemployment programs, better education etc. Stimulus checks are perfect example. So why would a politician say no? So both parties spend to get votes.

John and Noah seem pretty excited about the current state of the market.

https://youtu.be/kr02G8mu5O8

I'll take the bait. Everything 300 mentions is actually great if you're an urbanist interested in long term QoL rather than RE speculation.

Narrow streets: pedestrian supremacy is unquestioned. Drivers know their place; even aggro NJ plates rarely exceed 10mph. Seniors with walkers, boozy brunchsters in streetside cafes, and youngsters on bikes can all feel safe to roam, at least until you hit West St (I don't count BPC).

Tall buildings: diverse jobs, dense retail amenities, your family doctor/accountant/tailor/iPhone repairman all within a couple blocks...and for those willing to pay for it, unparalleled skyline. (I'm not willing to pay that price on a everyday basis, but it makes the occasional splurge at rooftop bars exquisite; when the mood strikes, I have a dozen such choices within stumbling distance. Meanwhile my sister-in-law, who IS willing to pay 1.5X, fell completely in love waking up with floor-to-ceiling views.)

Excess supply: falling rents! This forum aside, most people -- including almost all of the ones who make NYC interesting -- are renters. More overbuilding, please.

High taxes: a reflection of the robust infrastructure we're lucky to be sitting on. More a fairness issue than a lifestyle one. Hopefully the fiscal crisis will empower the next few admins to strike out the byzantine abatements and subclassifications that let other 'hoods pay far less than their share.

Zoomification of jobs: might make commercial landlords lose their shirt, but it's not gonna tear down our incredible building stock nor reroute the dozen trains that pass through the Fulton complex. If anything it should accelerate the transformation of monolithic office blocks into mixed-use development.

This was already afoot in a bigger way pre-covid than most realize: just as things shut down, they were literally building a food court in the (recently vacated) Chase Plaza and a row of nightclubs along Exchange Pl. Broad St is well on its way toward a Euro-style piazza, and can continue to expand that zone southward without the backlash that advocates have faced on Broadway (e.g. hoping to connect Times -> Herald and beyond).

RB, what are your favorite rooftop bars in the area?

RB, I would be buying at the prices you got too but that deal is rare.

Just to add, I find narrow streets combined with tall buildings very bleak and I do not care about direct sun on me. But there is a discount for everything.

The Bay Room at Manhatta is tops, no question. Just don't tell anyone. Pre pandemic, you could walk right up to the bar most nights, and I liked it that way.

Ampia, the Conrad hotel, and 1WTC are best reserved for tourist/family visits. (actually, the Conrad makes a perfectly fine weeknight if you skip that Instagram-gimmick popsicle drink) The Crown is a very reasonable walk, weather permitting.

Since we're on the coastline, I'd also count the contingent of drinking venues with great views @ sea level: Blacktail, Le District, Pier 17, etc. Many are closed, but someone equally cool is sure to take over that real estate.

Truth be told, when not chafing at a supposed Manhattanite's fear of tall buildings, stiff booze and interior character are more important. I mean, we got married in a windowless room at the Dead Rabbit Grog.

Thanks, RB! I knew about Manhatta (and to turn the wrong way upon exiting the elevators when available) and 1WTC (cheap drinks as far as I’m concerned; I’ll admit to paying for the elevator ride effectively just to get to the bar). But not the rest, hope to make the rounds soon — my new place isn’t too far from yours, so looking forward to exploring the vicinity as a local again for the first time in many, many years.

"The average discount from initial ask to final for the 41 contracts dropped to 8 percent, down from 11 percent the week before. The median price was $5.94 million and the homes spent an average of 598 days on the market. "

I would assume the rather small 8% discount is coming off of an already more realistic seller?

I guess they didn't take a pause in counting regarding the 598 days average on market? Can anyone confirm? It would be interesting to break out the individual time each one of these sales spent on the market.

https://therealdeal.com/2021/03/29/manhattans-luxury-market-streak-continues-for-8th-week/

Some good information if you take your time to read through the entire article.

All the strength Keith has been seeing in the field is finally showing up in the numbers. Resales market pulse at 60. Officially hit the low end of buyer’s market!

https://m.youtube.com/watch?v=1NWROvG2lwg&feature=youtu.be

To quote Mr Rosenblatt: "this Market is on fire".

A large segment of the Brooklyn Market especially private homes, I would tend to agree with that statement. We just signed a deal at 214 Quincy Street, a 2200 square foot 4 bedroom at 135 EP and a two bedroom two bath at 524 Manhattan avenue. For a large segment of The brownstone market it certainly feels like a seller's market. It's becoming increasingly difficult for us to get deals done in Brooklyn. On a very selfish level, we do much better in a falling market, as a company.

If you don't already have an account to Urbandigs, I would strongly suggest logging in and getting one, especially if you're a buyer or a seller. Cut through the broker BS and go straight to the numbers.

For the most part, just as I tell our clients, take what brokers say with a grain of salt. If anyone actually knew what was going to happen, they probably wouldn't be wasting their time on a web forum, they'd be counting all the money they're making.

Anyway watch the video, as usual some very interesting insight along with numbers and charts to assist in making sense with what's going on.

Keith Burkhardt
TBG

>> If anyone actually knew what was going to happen, they probably wouldn't be wasting their time on a web forum, they'd be counting all the money they're making.

Counting money gets boring after a while.

Just an expression NADA, don't take it too literally... ( :

People buying homes have more data at their disposal that any other time in a organized format. While one could have easily calculated market pulse from Streeteasy data and they could have published it in a more obvious manner, it is very helpful to have a measure neatly organized by Urbandigs.

Word from the streets;

"Hi Norman,

Thank you for your patience. I just got back from some appointments.

The other buyers were very aggressive and placed an offer above the asking price which the sellers have just accepted. They are also stronger financially. I apologize it didn't work out. Your buyers are lovely and I wish you and them the best of luck.

Sincerely,
Xxxx"

For a fairly average apartment on 4th avenue in Brooklyn... If you're a buyer in Brooklyn, I'm sure you're seeing a lot of this. Would love to hear from anyone actively looking in Brooklyn.

@mcr here's an update from the mean Streets of Sutton Place;

We had an accepted offer on a two-bedroom, has been on the market 200 plus days, we were a few days into a contract negotiation. We had an accepted bid below ask. Someone else jumped in and bid 25k above ask... Oh well. Happy ending for us and our clients they quickly bid ask on something two blocks away. Say a prayer for us ; )

Keith
TBG

Ouch

https://nypost.com/2021/04/06/quality-of-life-plummets-taxes-rocket-and-new-york-city-faces-doom-goodwin/

Based on some of Mr Goodwin's other recent articles, he has a consistent narrative.

Here is some data to consider;

https://pfnyc.org/research/signs-of-progress/

@keith - That is good news indeed. Thank you for the update. Consistent with my love for the neighborhood regardless of property values, I don't even care what the price points are. I am just happy when anyone values the neighborhood. My hope is that the price points will come down enough and the boards will all modernize such that the entire demographic of the neighborhood changes. It is interesting that when I first moved in I think there was something subconsciously comforting about so many clones of my parents walking around; the last 10 years have changed everything.

Interesting, Keith. I'm surprised that the unemployment rate worsened in the first two months of the year, especially since the study says that the "tourist trades" - restaurants, hotels, arts, retail - improved during that period. This suggests that unemployment is continuing to go up in areas not directly "pandemic-affected". The study doesn't go into much useful depth, but the sectors that are continuing to hurt are most likely a combination of higher paying professions and government jobs - i.e. more permanent positions. That is highly concerning.

Sure, no argument from me. My point is I just rather look at a source that's trying to provide actual data rather than a New York Post opinion article for clarity on what direction we're heading in. Whether that direction is good something in the middle or bad.

Since the title of this thread has UD in it....
https://www.wsj.com/articles/manhattan-residential-sales-in-march-soared-to-highest-level-in-14-years-11617361200?j=753982&sfmc_sub=97798232&l=122_HTML&u=16334858&mid=100004597&jb=1003

Is Urbandigs broken with resales market pulse at 63? Getting to be seller's market if it continues for a couple of months.

@MCR I love the neighborhood, but ridiculous board requirements are keeping me out. I could never imagine someone in my income bracket and with significant assets be "borderline" or "not qualified" for an entry level apartment. Crazy!!!

@Krolik - I would throw in an offer and give any building you like a try. Look at the number of buildings that lowered max financing to 25% from 50% (and many started as "no financing allowed period" buildings). These buildings are getting desperate.

For example, our building just rented out one of its most heavily-shared apartments to a member of one of the richest families in the world that is quite controversial for a host of reasons. I was not involved in the due diligence on the tenants (and I would have voted "No" on approving the rental), but something does not add up - why are these people renting? And, why are they renting in our building?

A member of one of the richest families in the world renting in our building recalls to me the Maurice scandal at Duke in the late 1980's, which involved a 35-year-old Mexican national's con of Duke University administrators (I mention "Mexican" to highlight aburdity that the guy was not even French! and spoke with a Spanish accent). The con artists (Carlos Salinas I believe was his name), told Duke administrators that he was "Maurice de Rothschild" and that he thought Duke was the finest insitution in the world, but that his family would not pay for any U.S. school other than Harvard. He promised that when he came into this trust fund, he'd give Duke a huge endowment if they'd pay his expenses.

Duke ate it up, and was most embarrassed when it found out not only that it had been conned, but that Duke was the con artists's third (?) choice. Apparently he had tried the move with Harvard and Berkeley, who had turned him away.

Duke administrators were angry and said "why didn't those schools warn everyone?"

Apparently, those schools responded "It was so obvious, it never occurred to us anyone would actually fall for that nonsense!"

Very embarrassing. I am a Duke alum; I was there at the time, and I recall the fraternities fighting over "Maurice." Thank goodness for Duke there was no Internet at the time; we would still be the laughing stock, and the online recounting of all the Maurice stories would have been comic gold.

I think one can break down the factions in our building by their reaction to the new tenants. Some are horrified, while others are bragging to their "friends."

MCR, please send me an email naming names. That’s just too juicy a gossip to leave me hanging...

Done.

A large segment of the Manhattan market continues to show strength, but nothing like Brooklyn! Right now it feels like every property under $2 million dollars we're bidding on, has multiple bids. Even seeing this in Kensington!!

I look forward to the market slowing down...

"This market is gangbusters"

John Walkup

There's also some charts trying to explain what's going on in the rental market.

https://youtu.be/gV1hTeeX1lo

@MCR - where can I find a list of buildings in the area relaxing requirements below something like "max 50% financing and value of the apartment in liquid assets post-close"?
Even some 30% down buildings seem to have the dreaded multiples of value in liquid assets requirement.

By the way, some listing brokers implied that not having a specific financial requirements rule is board's way or weeding out candidates with unwanted personal characteristics (some of which are supposed to be protected from discrimination under law).

@krolik - I am not aware of any list but rather have noticed in listings here and there, plus I know discussions in my own building. We are not yet down to 25% though we should be, and we certainly do not have post-closing liquidity requirement of apt price. Just pick a building and check it out. Sutton Place probably has more hold outs than Beekman Place.

Brooklyn Market metrics now live on Urbandigs.. guess I wasn't too far off when I said Brooklyn was booming 7 months ago. That just happened to be what we were experiencing, wasn't a prediction.

https://www.urbandigs.com/dashboard/

Just tap the little gear and select Brooklyn. Apologies, I thought it would stay set to Brooklyn.

Sure, every offer isn't this crazy, but for those just sitting behind a keyboard I thought you'd find it interesting to see what we're dealing with IRL. This is for a property in Park slope.

Something else interesting to note as we've worked with this agent before, she does her best and highest in an open bidding format. When she establishes a set amount of people that are actively bidding, she creates an email chain and discloses all the current bids. You then have the opportunity to bid again or drop out. We participated in one of these a few years ago and our client was successful, initially I didn't like the process, but the client was pleased with the transparency.

Hi Jeff and Anna -

I just received this:

'Thank you for the offer! We have 14 viable offers on the table. The highest and best offer at the moment is $720,000 with 39% down. Please let me know if your buyers would like to raise their offer.'

Not sure what you want to do here. Let me know.

Thanks,
Norman

Transparency seems good, Keith. Sadly, the RE industry seems littered with too many sketchy bad apples.

How do you think clients should bid in such situations, BTW?

In this case the clients best and highest truly was their best and highest, so we bowed out after the first call for highest and best.

The apartment was priced fairly close to market in our opinion, and the premium they were willing to pay to get the deal done made sense to us and to them (especially factoring in the commission rebate). They've been looking for a while and the space and neighborhood really worked for them.

Unfortunately it would appear there are other people that either absolutely fell in love, and you know how one behaves when they're in love. Or they're just very aggressive buyers fed up with getting beaten up in these highest and best situations. This is not a market that we enjoy, and it's certainly not one our clients enjoy.

But to get more specifically to your question, first we try to determine what the property is worth based on similar recently sold comps, that's our baseline. And it's really up to our client to weigh in with the emotional components, what kind of premium they're willing to pay versus the current market value determined by a comparable analysis. Not to beat a dead horse, but this is certainly where the commission rebate can assist a buyer with getting to a number they're comfortable with that edges out the competition.

Every buyer is different though, as you can imagine.

Keith
TBG

Ok I'm willing to call it. The market is heating up a lot in the under 2 million apts. In South Harlem units appear to be selling quickly.

Brooklyn market pulse at 94! I'm glad we have some data to reference and support what I've been talking about and experiencing in the Brooklyn market for many months.

347 signed contracts this week for Manhattan. To paraphrase Noah, anything at 350 and above is gangbusters, certainly the current numbers are very strong.

https://youtu.be/Ajmrv9FRGVY

Enjoy your weekend everyone!

Keith
TBG

Thanks, Keith. If you’ve never heard about it, you might find learning about the Winner’s Curse interesting. Not that RE auction participants should necessarily adhere to it, but basic conclusion is that the more bidders there are, the less you should bid relative to what you think is the fair value. “Winning” an auction isn’t necessarily a good outcome, and the more bidders the more likely the winner over-estimates fair value. Hence, you should shade your bid from fair value more as the number of bidders increases, in case you have the misfortune of “winning”.

Keith, You were the first one to inform people of how hot the BK market is. In the meantime, is Manhattan going to do what BK is doing in under $4mm resales? Resales Market pulse at 68 now.

Haven't posted on here in probably more than 10 years, and it's amazing to see (a few) familiar screen names, still going at it. I'm back on the market myself, probably none the wiser!

Hi bjw!

It's been great during COVID to have the boards as a virtual watercooler, since it's been so tough to have access to a real one.

From Noah and John's Friday podcast. Also don't forget you can click the gear icon and go over to the Brooklyn market snapshot.

We're continuing to see a very active market, to paraphrase John walk up Brooklyn is definitely 'gangbusters', and Manhattan has seen activity pick up significantly after what seemed to be about a three to four month lag behind Brooklyn.

We were getting ready to submit an offer on an upper west side four bedroom / four bath, asking 5.695, we were going to offer $5.4... in my discussion with the client my belief was it was worth the current ask, however there was, one comp more in line with where the client wanted to bid. It was difficult to explain, other than to say that particular buyer did very well a few months ago.
We were informed there were three offers, two at ask and one above.

On the under $2 million front, both our Gramercy Park listings received multiple bids after the first open house and we now have contracts out with backups on both. Our Brooklyn listing received over 11 offers, and after a few hiccups we should have a contract signed this week.

As it stands, our clients who purchased early in 2020, did exceptionally well relative to where the market is today. Although Brooklyn didn't slow down to the extent that Manhattan did. However, Brooklyn was also much more buyer friendly in early 2020.

I send these reports religiously to all of our clients. The Friday vlogs are one of the best places to get a quick and easy snapshot into what's happening week to week.

https://youtu.be/0OBGgA1a2Kc

Keith Burkhardt
TBG

Another strong week for the $4 million and over Market.

56 contracts signed, up from 47 last week. Condos outsold co-ops 44 to 9, typically it's 3 to 1 according to the report. 154 contracts signed over the last 3 weeks totaling $1,282,700,982.

https://olshan.com/marketreport.php

And digs resales market pulse is solidly staying 65+.

Digs resales market pulse also staying at 65+. So clearly Manhattan market has normalized likely with low participation of foreign buyers due to international travel restrictions. As the vaccination picks up speed globally, we may even have foreign buyers return.

Serious dip in contracts signed this week in Manhattan. Will be interesting to see how Noah and John break it down in their vlog today...

https://www.urbandigs.com/dashboard

Looks like there was a correction to the contracts signed. That seemed like a drastic drop, and we're certainly not experiencing that in the current market. Quite honestly I'd love to see things cool off a little bit...

I hear market is cooling off in the rest of the country. Many offers on each house still, but some buyers are dropping out, often after their offer is accepted, either because they were bidding on multiple properties, or had buyer remorse.
Wondering how this will translate to NYC.

300_mercer, we already have tons of Indian buyers fled in recently, they can easily pay $10,000 for a ticket

Volume increases are encouraging, but I think one of the major issues for all buyers is this constant increase in crime in NYC.
Politicians have to quit whistling past the graveyard and push for safer streets

Let's have a look at the numbers and you can also adjust some of these parameters to zero in on a market segment you're interested in.

Based on these earlier threads, from say 10 months ago. I don't think anybody expected to see New York City turn around this quickly and strongly, at least in regards to real estate, pricing and volume.

www.urbandigs.com/dashboard

The data from the UD video looks like early stages of what went on in much of the country over the past 7-9 months. Supply not able to keep up with demand, partially driven by loose monetary policy/equity performance and partially driven by changing preferences. Contract activity seems to be outpacing supply right now which led to last week’s 0.72 market pulse. With preferences potentially shifting back to be more favorable towards NYC/Manhattan, I’d bet on the demand trend continuing while supply stagnates.

What's interesting is there was an abundance of supply in many of the New York City suburbs. Towns like Nutley, New Jersey, Nyack in New York had downright stagnant real estate markets. I happened to be following some homes in Nyack, pre-pandemic it was a pure buyers market, that turned on a dime. Previously, many homes were sitting on the market for one year plus. I wonder what percent of the buying activity in the suburbs was purely relocation versus suburban renters wanting to make the move to ownership in the midst of all the uncertainty?

I have a tough time seeing Manhattan real estate behaving like rest of the country. My reasons
1) The boom was more pronounced in cheaper locations around the country. However, Manhattan market is already overpriced. Average HH income in Manhattan is ~140k, or double national average of ~70k. At the same time, average home in Manhattan is ~1.05m, or about 3 times national average of ~350k. And the mix of homes in Manhattan probably includes lot's of 1brs, vs. larger homes in rest of the country. Conversion of believer renters to homeowners is happening (myself included) driven by cheap mortgages, but there is a real limit to price levels at which this conversion makes any financial sense, so there is a ceiling on possible price growth.
2) NYC was hit more than other locations in terms of job losses and will take some time to recover. Increases in taxes and rise in remote working make returning to Manhattan less attractive. With fewer people, and some supply of new construction units, rents are bound to stay below pre-pandemic levels for some time, and renting will remain a more attractive option.

Of course, there are foreign "investors" in the mix and rich kids that are "bad with money" per MCR, so this market is not only driven by local factors such as wages and ratio of rent to purchase price. This is probably more of a factor for condos vs. coops. Anyway, the current opportunity has been attractive given mortgage interest level and price softening, combined with the belief that NYC will be back at some point. However, given reduced prospects for the city, tough to see how prices could rise above inflation-adjusted pre-pandemic levels, especially if interest rates rise.

I am curious, how much have prices grown in Nyack, or are the homes moving quicker but at a similar pre-pandemic price? Also, wondering how many buyers plan to commute to Manhattan (not great transportation options as far as i understand), vs. buying second homes?

I think people are still underestimating the WFH effect.
Even one of the more cut-throat funds has announced a 3-days in-office policy once the 18 months of COVID WFH is over.
https://www.bloomberg.com/news/articles/2021-05-17/hedge-fund-millennium-to-try-three-office-days-a-week-this-fall

Was running the math in my head and its interesting, on a 365 day/year calendar basis..
Pre COVID you had to be in-office (ex-holidays/weekends/vacation) 62% of the year.
Post COVID..
If 80% in-office: 49%
If 70% in-office: 43%
If 60% in-office: 37%

So some office workers are looking at their commute vs non-commute % days inverting..
A lot of people are probably going to prioritize their local community over their commute time in this environment.

Even WeWork the company that sells office space as a service, now has 20% WFH going forward they've announced...

WeWork is still around? Where did they get the new money to burn?

@Anton - exactly, lol. I think they got another $1B from Softbank last summer and everyone threw Neumann under the bus / reneged on agreements to pay him out / etc.
They managed to lose $3B in last year.. they seem to be trying to go the SPAC route, which is like 6 months too late I think, oh well.

Re: WeWork WFH policy
https://markets.businessinsider.com/news/stocks/wework-hybrid-model-staff-work-hq-office-location-home-2021-5-1030432948

Just finished reading "Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork " this week actually. Quite a tale, and the book was quite something even for someone who has followed the saga for the last 4 years pretty closely.

Heard WeWork was considering going public... again... hahaha

@steve123 this is exactly the math I am doing in my head. My work announced 2 days in office and 3 days from home going forward, so the commute is indeed inverting. That said, I still would want to be in Manhattan on the weekends, for the most part. I'd love to go fishing or apple picking on an occasional weekend, but for the most part I am a big believer in all that Manhattan has to offer - proximity to friends, bars and restaurants, yoga studios, dance studios, theater, shopping, museums, parks, etc.

Good point Krolik. I didn't originally move to Manhattan because I wanted to work there, I moved there because I wanted to live there. And I'd say that goes for all my friends that wound up moving in and except for a very small percentage, still live there.

No doubt as the city homogenized into a pretty suburban like place to live, more and more people decided to put down roots, raise families etc.. and not have to deal with the hell of a commute.

I've probably said this here before, in the '80s/90's young people moved in after starting their first job. Rented an apartment with some friends or on their own, and once they were ready to settle down and start a family they headed to the suburbs. This is definitely an anecdotal observation, however it's what I remember most clients doing and some acquaintances. You put your six to eight years in and then left.

Not sure exactly when it happened, at some point I noticed clients calling looking for larger homes as they were getting married and getting ready to start a family. And the great migration began.

The old school New Yorkers that I knew as a teenager in the late seventies and early '80s were a very diverse crowd of folks. You just didn't need a lot of money to live here comfortably then. My first apartment at 188 Norfolk Street was like 250 a month and I had two roommates!! I was playing music, and silk screening punk rock/Bob Marley t-shirts in a spare room and selling them to record stores and in Washington Square Park. And I could live comfortably, lol.

steve123, I just remember WeWork flipped the Lord and Taylor building right before the pandemic last year, they made about $1bn profit or so, should be enough to burn for the next couple of years

While the office market will take a while to recover and repurpose in my opinion, some one is buying in Manhattan with Resales Market Pulse >70 for more than a couple of weeks now. Besides reopening, is narrowing of spread between burbs (up 10%+ without many choices) and Manhattan (down 5%+ from the peak) a factor. I think so.

Yes, pricing down, mortgages low. I am buying!
I just don't think there is so much room for prices to go up by 15-20% like they did in markets that were cheaper to start with.

If I were in the market, I would want to wait until the next Mayor is selected...in June. The range of outcomes is pretty dramatic.

BTW, I hear positives for NYC real estate and quality of life in what Eric Adams and Yang are saying.

It’s not just who will be mayor, but of course this matters.
But the progressive left now is in control of the State senate.

Just read attached article from Crains about the fact that the city is going forward to build affordable housing in prime Soho. https://www.crainsnewyork.com/real-estate/city-pushes-ahead-soho-rezoning-face-lawsuit

That plus the fact that crime is positioned to go up in the summer.

I don't have a Crain's account, but I've followed the Soho zoning issue. Seems like there's very little affordable housing in the plan despite all of the allegedly deeply held convictions of those who support the scheme.

https://www.villagepreservation.org/campaign-update/report-shows-citys-soho-rezoning-plan-unlikely-to-produce-any-affordable-housing/

What are the volumes YTD vs 2020 , vs 2019 , vs 2018 ?

What's pricing YTD vs 2020, vs 2019 , vs 2018 ?