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Elena Ravich, Rakita Realty's Blog

By Elena Ravich, Manhattan Expert | Broker in 10019
  • For Sellers, High End Is Hot

    Posted Under: Home Buying in New York, Home Selling in New York, Property Q&A in New York  |  February 25, 2012 10:07 AM  |  554 views  |  1 comment


    By Marc Santora; Published in New York Times Feb 10, 2012

    WHILE the economy remains stubbornly sluggish and home sales nationwide continue to sag, Manhattan’s real estate market has largely stabilized, with apartments in some neighborhoods selling for prices not seen since the headiest days of the boom.

    Homes at two recent Robert A. M. Stern designs, 15 Central Park West, far left, and Superior Ink, are among the city’s most expensive.

    But on the road to recovery, one segment of the market has outpaced the rest: ultraluxury, which analysts roughly define as properties costing $7 million and up. At these lofty heights, there was only the slightest of hiccups after the crash, and in the ensuing years, values have soared, with some apartments doubling in price.

    Normally, that news would mean rising prices in every other segment of the market, from the tiniest starter studios to family-size four-bedroom co-ops. But that is not happening, even with interest rates at record lows and prices considered reasonable by Manhattan standards.

    “There is a greater disconnect between the very top of the market and everything else than I have ever seen in my 25 years in the business,” said Jonathan J. Miller, the president of the appraisal firm Miller Samuel.

    Part of the reason for this, brokers and analysts say, is that the wealthiest buyers are immune to practical matters like stricter lending standards and shrunken Wall Street bonuses.

    In the last three years there has also been a dry spell in new construction, and for those with money to burn, the limited inventory has stoked demand. And with New York now seen as a refuge during uncertain times, international buyers are helping to drive the prices ever higher.

    “Most people would say that the top end of the market is bulletproof,” said Pamela Liebman, the president of the Corcoran Group, “and that buyers at this end don’t have the same sensitivities as the rest of the market and their confidence does not wane. There is a reason that Hermès has a waiting list for belts and bags.”

    Defining ultraluxury is not an exact science.

    “When I started,” Mr. Miller said, “ ‘luxury’ meant the building had a doorman. Now, because luxury has become generic, they have had to add the adjective ultra.”

    Generally, brokers agree that anything priced above $7 million fits the bill. Mr. Miller compared the sales at the top 5 percent of the market — apartments priced over $6 million — with those at the bottom 5 percent — apartments priced below $300,000 — over the last decade. After adjusting for inflation, he found that the value gap between the most and the least expensive properties has never been wider.

    “It seems to be part of a wider global phenomenon, where there is an ever greater concentration of wealth at the upper echelons,” he said.

    Many moderately priced properties sold last year for roughly the same price that they brought from 2006 to 2008. Mr. Miller described a one-bedroom at 360 East 72nd Street as typical. The owners paid $770,000 for it in 2006 and sold it last year for $750,000, about a 2 percent loss. Meanwhile, a four-bedroom at 151 East 58th Street, bought in 2005 for $13 million, sold five years later for $17.75 million, a 36 percent profit.

    The most expensive apartments constitute only a fraction of the market, but the impact of their rising value is greater than just the eye-popping sums they command. Along with the surge in demand for lavish prewar co-ops, the success of developments like Superior Ink in Greenwich Village, and 15 Central Park West and the Laureate on the Upper West Side, makes it all the more likely that future developers will choose luxury over affordability.

    In the 1980s, it was rental high-rises like those dotting the Upper East Side that appealed to developers. While they often offered some good-sized apartments, they were designed to accommodate as many apartments as possible. Operating under a different mindset, developers of those buildings often put fitness centers on the top floor, whereas that space now would be reserved for a penthouse getting top dollar.

    The condos that have opened in the last few years often have larger apartments and fewer units. They are aimed squarely at the rich, perhaps none more so than the new Extell development at 157th West 57th Street, called One57.

    When it opens next year, it will be the city’s tallest residential building, at 90 stories, and the most expensive, with the cheapest unit reportedly at $7 million. Fewer than 100 residences will be available.

    New York has always had its share of trophy properties, but Ms. Liebman identified the $45 million sale in 2003 of an apartment in the Time Warner Center as the one that ushered prices into the stratosphere. Whereas eight-figure deals were a rarity as recently as five years ago, hardly a week went by last year without a sale over $10 million. The gilt-edged properties were spread across the city, including penthouses in TriBeCa and Union Square, co-ops on the East Side and new condos on the West Side.

    When the banker Sanford I. Weill sold an apartment at 15 Central Park West late last year with an asking price of $88 million — more than $13,000 per square foot — real estate executives said the deal signaled another leap in the kinds of prices that are possible. Mr. Weill very likely doubled his 2007 investment of $43,687,751.

    The impact was immediate. For instance the reported asking price for the penthouse at One57, first set at $90 million, soon neared $115 million. Still, at $7,000 per square foot, a certain kind of shopper might consider it a bargain.

    “Even if you are spending $40 million, it is comforting to know that there are other people spending that kind of money as well,” said Kelly Kennedy Mack, the president of the Corcoran Sunshine Marketing Group, who has been a consultant to top-selling Manhattan developments including One57. ”

  • 2012 Home Sales: Positives on Many Fronts On January 3, 2012, in Breaking News, Economics, by Robert Freedman

    Posted Under: Market Conditions in New York, Home Buying in New York, Home Selling in New York  |  January 5, 2012 9:57 PM  |  666 views  |  No comments

    NAR [National Association of Realtors] released its latest pending home sales index figure last week and for the second month in a row the index is up. But more than that, the index has broken 100. This is significant because the only time since the housing boom collapsed that the index has broken 100 is when the home owner tax credit was in effect. The fact that the index has returned to that level a year since the credit has been in effect means the housing market is strengthening completely on its own, without any stimulus.

    NAR Chief Economist Lawrence Yun is upbeat about 2012 because in a number of areas indicators are pointing upward. Not only are home sales up but housing starts are up and home prices are stabilizing in many markets and heading up in some. In areas where they’re still down, the declines aren’t that great. More fundamentally, broader U.S. economic signs are looking positive, including the all-important jobs picture. About 100,000 job are being created a month, and that could rise to 150,000—still not a quick enough pace to get us back to where we were before the downturn but the headwinds are in the right direction.


    In the video, Yun talks about what the latest figures mean.

  • The Russians are buying up real estate in New York

    Posted Under: Home Buying in New York, Home Selling in New York  |  November 29, 2011 7:55 PM  |  608 views  |  No comments

    reprinted from http://realestateeng.blogspot.com/2011/11/russians-are-buying-up-real-estate-in.html

    The Russians are buying up real estate in New York

    The Russians are buying up real estate in New York

    The Russians and CIS citizens are increasingly buyers of real estate in New York and on Long Island. According to experts, the U.S. demand from the Russian-speaking residents in the past two years has doubled and continues to grow.

    A typical Russian buyers of real estate - is married to businessman 35-45 years, having grown-up children. His favorite place - the city of New York and parts of Long Island, particularly fashionable Hamptons. Demand and resort destinations such as Florida.

    "It's the wealthy people who are over 40, with children older than 20 years. It is logical that parents are looking for apartments with two or three bedrooms for their children. Often, the initiator of the purchase becomes a wife. The trust is to invest in real estate - one of the features of Russian mentality, "- says Victoria Logvinsky, vice president of Douglas Elliman Real Estate

    Edward Mermelsteyn, a lawyer and senior partner of Rheem Bell & Mermelstein, specializing in providing legal services in real estate, said that over 20 years of practice he has never seen such sales activity for the Russians. His firm almost half of the transactions concluded with customers from Russia and Ukraine, and has recently become more buyers from Kazakhstan.

    Lodging in Manhattan costs an average of $ 3 million, most in demand luxury apartments in the most prestigious New York City buildings. "Very rarely Russians buy property cheaper than 800-900 thousand dollars", - says Mermelsteyn. Most important for our fellow citizens - a prestigious district. The lawyer, apartment in a good location is 30-40% more expensive than the same for the less popular streets.

    "Russian customers often buy property in the best buildings and prime locations, they focus on Park Avenue, the streets of West Central Park South and Central Park, 5th Avenue and 57th Street. They often ask where are the best buildings and apartments, "- says Logvinsky.

    Besides the "Big Apple", the Russian-speaking diaspora develops spaces Hamptons region, which traditionally inhabits the New York elite, including former Mayor Rudolph Giuliani, current Mayor Michael Bloomberg, Bill and Hillary Clinton and others.

    Logvinsky notes that this year began to show more interest in the Hamptons those Russians who are usually rented during the holidays at home in the south of France. Businessman Igor Sosnin rented a house in the summer for a record $ 850 thousand dollars. Igor Sharp, who already has an apartment in New York's Hotel Plaza, finished building a house in the Hamptons.

    Not all Russian buyers are seeking "green card" after the acquisition of housing. According to Anna Gerson, a lawyer specializing in real estate transactions, many customers who already have an apartment in New York, satisfied tourist visas, which allow to remain in the country for six months. Russians often come here for the holidays.

    In the U.S., buying real estate does not give the right to automatically receive residence permit, but in buying a home in the amount of 500 thousand dollars you can qualify for a three-year visa.

    According to Logvinsky, it became more of our countrymen, who come from the British capital. "I also worked with several Russians who are tired of London, and wanted to move to New York with their families and move the business here" - she said.

    Many deal with our fellow citizens, are registered in the company's one-day. According to Anna Gerson, she often had to deal with registration of the company only to have to bargain sale.

    Experts believe that now is the time to buy luxury homes. "Obviously, the cost per square meter will rise. Today we are at the level of 2004-2005 ", - says Mermelsteyn. In 2008-2009, it was possible to get a discount of 20-25%. Currently, prices have stabilized, however, according to Logvinsky, it is still possible to slow down the cost by 10%.
  • RENTAL MARKET REPORTS -Sorry, Renters, The Good Days Appear to be Over in Manhattan Thursday, October 13, 2011, by Sara Polsky

    Posted Under: Market Conditions in New York, In My Neighborhood in New York, Rentals in New York  |  October 30, 2011 11:10 PM  |  717 views  |  No comments

    [Charts via Prudential Douglas Elliman. Click to expand!]

    Not only is it not Friday yet, but it's also rental market report day—and for renters, the news is still not looking good. Brace, folks: rents are up, inventory is down, and concessions are way down.

    The median rental price was $2,995/month, about the same as last year but up a bit from the second quarter. (Citi Habitats, also with a quarterly report out today, places that number higher, at $3,346/month.) And that's without factoring in concessions like free rent. Once that's included, the median net effective rent is actually $2,970, up 4.9 percent from the third quarter of 2010. And a far smaller percentage of listings came with concessions this time around: only 8.6 percent of new leases (Citi Habitats has the number at 5 percent) included concessions, compared to 45 percent of leases a year ago. This could change as the rental market assumes its more glacial winter pace, though.

    The vacancy rate is actually lower than it was in the third quarter of of 2010—0.93 percent compared to 0.99 percent, according to Citi Habitats. But the rate is up significantly from the 0.72 percent of this year's second quarter.

    Of course, the numbers vary by apartment size. Both Elliman and Citi Habitats saw substantial rent increases for studios and three-bedrooms. At the same time, new lease signings in both categories dropped significantly. For studios, the decline came from first-time buyers choosing to purchase instead while mortgage rates are low; for three-bedrooms, supply simply became more limited. Check it out in chart form:


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