This might shock you, but from the MIT research paper I have read about commercial land values in Manhattan over the last 100 years, there hasn't been any substantial inflation-adjusted gain on it. In fact, it has apparently LOST VALUE in inflation adjusted terms over the years. This actually makes sense if you think about it.
Take a look for yourself: http://web.mit.edu/CRE/research/papers/WP90wheatonbaranski.pdf
Lets look at simple supply and demand dynamics. An area's land is a fixed asset/commodity (technically), and that means that it's inherent value is directly correlated with the amount of demand placed on it by the population that occupies the land. This means that the value of land is directly connected to the increase of population, and thus is subject to localized inflation!
But this doesn't tell us the whole story. There is another aspect of this value: Technology! Skyscrapers and trains are actually fighting the rate of local inflation in the price of land!
As the population of the city increases, naturally, so will the land value within a certain radius of that city, but as technology increases the efficiency of a certain area of land, the land value itself starts to depreciate in nominal terms as you need less of it to create the same outcome!
Now, don't let this dissuade your future commercial development plans. Even thought the undeveloped land itself, as well as the structure you build on top of that parcel will depreciate over time. The return you would incur from developing and then properly utilizing that land would be more than enough to make your effort worth while! Let us not forget the multiplying powers of leveraging in this situation as well!... more
Well with Harlem you get a higher return than the rest of Manhattan. Usually that means that it must be a riskier place to invest in.
The risk is tied to the possibility that it will depreciate instead of appreciate.
If you think the economy will get better, than go right into harlem and start buying. It will technically appreciate faster as the economy gets better since that's where all the money will be going to feed on ROI. Developers and swarms of wanna-be trumps will buy up everything in sight to get some of that ROI.
If you think we are going to be flat to negative for a while... then I would invest in something less affected by economic issues. Places near the park most likely.... more
Chelsea is one of New Yorks more expensive downtown neighborhoods and has beaten the market for quite a long time. The changes inthe neighborhood with new parks like the Chelsea Cove on 23rd & the Hudson and the High Line as well as a general upscaling of the retail environment and the move of the Art Gallery Scene from Soho to West Chelsea have contributed to the areas 'innoculation' against the declines seen in other areas. Sales below $1M have been stronger city-wide for the past year as financing is more readily available and affordable in that range.
But the $1M+ Market is definitely moving as well. A slight overabundance of new development inventory has kept those prices a bit lower but that seems to be rapidly being absorbed now. When you hit $2.5-3M things are still a bit slower, but moving as well.
I picked Chelsea as my target neighborhood 19 years ago when I began in Real Estate so I take full credit for the development and increase in value in the area (cough cough)--but seriously I saw what the area was, saw the early trends and don't see any reason for them to change, only get better.... more
THe rental market changes week to week, it is below last year but better than last quarter and seems to be gaining more strength. But this varies by neighborhood, and even by building.
Location, Quality and Services sell.
I am seeing No Fees less, excpet for new buildings that need to fill up fast. Free Months going away--they really are only a ploy to get you to pay a higher rate, get used to that rate and then renew even higher.
IE you are paying $2400 with a free month, you see it as $2200 but your renewal will be based on $2400 and in a better market. Of course if you only need 1 year...... more