NEW YORK — The real estate market in Manhattan, as well as in Brooklyn, is now firing on all cylinders and nearing pre-recession levels, according to a couple of recent reports.
“It’s really remarkable because January and February was just really crazy,” Streeteasy Vice President of Research Sofia Song told New York Magazine’s S. Jhoanna Robledo. ”That’s insane. This is the highest number of contracts in the first quarter and the second highest of any quarter since the meltdown of 2008.”
Properties that went into contract in the first quarter of 2013 jumped by 15 percent compared to the same period last year, according to Streeteasy.
Song called 2013 the “Year of the Frustrated Buyer.”
Anyone who has attended an open house in Manhattan, Brooklyn and parts of Queens would likely agree.
Also gone are the days of the low-ball offer.
One real estate agent told The Real Deal that bidding also had gotten “absolutely insane,” with three buyers making offers within the same open house.
A fellow agent at my firm, Bill Bone of BOND New York, was also quoted saying that his buyer lost out on a Williamsburg condo. “We had to compete with 45 other offers.”
(That’s why it pays, more than ever, for buyers to use an experienced real estate agent.)
Meanwhile, the median price of a Manhattan apartment rose 5.9 percent from the first quarter of 2012 to $820,555. The average price rose to $1.354 million, according to real estate appraisal firm Miller Samuel.
- New York Magazine: Manhattan Real-Estate Market in 2013 Is ‘Insane’
- DNAinfo: Year of the Frustrated Buyer Awaits Manhattan Real Estate Market
- NYC Apartment Agent: Benefits of an Experienced Real Estate Agent
- TheStreet: You Will Kick Yourself If You Don’t Buy a Home Now: Ivy Zelman
- NYC Apartment Agent: Hot NYC Area Condos: Gone In One Hour
NEW YORK — Scarce inventory, low interest rates and improved consumer confidence are making the current real estate market one of the strongest in at least a generation, one industry expert said Thursday.
“I think we’re in nirvana for housing,” said Ivy Zelman, chief executive officer of Zelman & Associates, told CNBC.
Zelman, who has 22 years of experience, accurately called the 2005 high in the real estate market, as well as the 2012 low.
“I think that I have to tell you, I’m probably the most bullish I’ve ever been fundamentally, and I’m dating myself, been around for over 20 years, so I’ve seen a lot of ups and downs,” she said.
Zelman also honed in on a curious practice increasingly common in the New York real estate market.
“I’ll tell you, there are Realtors blanketing neighborhoods, asking people to sell their homes,” she said.
Housing prices are poised to continue rising for the next four to six years, she added.
“Where the inventories in the United States are right now is a significant constraint. We have 30-year low inventories,” Zelman said. “Mortgage financing is by far the best it’s ever been in the history of our country. Rent inflation is making people reconsider going out and considering buying.”
NEW YORK — Good news for the Manhattan real estate market: Apartment prices rose last year across the board, with the highest gains coming in larger, luxury homes.
A CNBC story by real estate reporter Diana Olick cites uncertainty about economic policy out of Washington for blockbuster sales in the fourth quarter, which reached their highest level in 25 years.
Olick writes, “Total sales of both co-ops and condominiums jumped 40 percent in the fourth quarter of 2012 year from the same period in 2011, according to a new report from Brown Harris Stevens. The average co-op price of $1,285,426 was 12 percent higher than a year ago, while three-bedroom and larger co-ops saw a 34 percent price leap.”
Scarce inventory — at its lowest point in 12 years — will keep upward pressure on prices.
A look at the upper segment of the market showed even greater strength.
“Sales of properties priced over $10 million rose 44 percent from a year ago, and this does not include several major transactions in the last days of the year,” Olick wrote. “One record $54 million east side co-op sale helped push average prices higher in that area by 20 percent.”
In October, real estate mogul Billy Procida that New York real estate couldn’t get cheaper, especially factoring in historically low mortgage rates — this week, 3.45 percent on a 30-year loan — and demand that had just started to pick up.
NEW YORK — It’s so thrilling to hear an expert back up what you’ve been saying all along. In this case, it’s real estate mogul and reality TV star Barbara Corcoran weighing it on why it’s a great time to buy.
Appreciation in property values, she said Wednesday on CNBC, would be stronger than the numbers are suggesting.
“It’s going to go much higher than people anticipate,” she said.
Sure enough, the Case-Shiller home-price index has shown consistent growth over the past several months and an increase of 3 percent from last year — and that’s in a soft economy.
The Case-Shiller index is backward-looking, data-heavy and conservative gauge of what home prices have already done, so it’s not subject prone to wild speculation.
With mortgage rates this week around 3.4 percent for a 30-year loan and 2.84 percent for a 15-year, Corcoran is the latest expert to suggest buying real estate, joining the likes of billionaire investor Warren Buffett and Billy Procida, Donald Trump’s original apprentice.
In her interview, Corcoran was asked whether prospective buyers who are able to borrow should borrow as much as they can. She agreed.
“You have 30 percent reduction in sale price. You have cheap money around,” she said, adding that in nine out of 10 real estate markets, buyers are likely to be outbid on a housing purchase at least once.
Corcoran, who built a $5 billion New York real estate business with $1,000 and now stars in ABC’s “Shark Tank,” also said that homeowners looking to upgrade should take notice.
“Right now, if you’re upgrading to a bigger house, even if you’re selling at 10 percent off, you buy your new house at a 10 percent off,” she said.
Addressing the popularity of multi-family housing, Corcoran said buyers would do well to look at another segment of the market.
“I would first go out and buy a beachfront property,” she said. “Go out and buy a second home. It’s the last piece of the real estate market that has yet to hit bottom.”
NEW YORK — If you’re looking to buy in the metropolitan New York region, don’t wait for prices to fall any longer, as the real estate market’s bottom might have already passed.
“Both Brooklyn and Queens saw the number of available apartments plummet (16.2 percent in Brooklyn and 12.2 percent in Queens), leaving buyers to scramble for what remains and driving prices upward,” wrote New York magazine’s S. Jhoanna Robledo.
(Robledo previously featured me in an affordable-housing feature for Williamsburg, Brooklyn.)
On the other side of the equation, home prices are on the rise again, even more so in Brooklyn and Queens, where they’re back to pre-recession levels.
The median price for a house or condo in Brooklyn is $510,000, a solid 4 percent higher than last year, according to NPR’s Margot Adler. Properties in Queens, the median price is nearly $400,000, up 2 percent.
Overall, sales are up 6 percent in the city (including Manhattan), according to the Real Estate Board of New York.
Buyers waiting for prices to soften might find that they’ve missed the boat.
NPR quotes Corcoran CEO Pamela Liebman likening the market to a nearly sold-out holiday sale.
“When you walk in a store on December 24th, you buy what’s ever left on the shelf,” she said.
NEW YORK — Buying a home within 100 miles of the metropolitan New York area stands to be a strong investment that “can’t get cheaper,” a former apprentice of Donald Trump and real estate mogul Billy Procida said this week on CNBC.
“At the end of the day, all of the country’s wealth was made through homeownership. Now, of course, we have fallen as far as you can fall. It can’t get cheaper because we’re way below replacement costs,” he said in a televised interview. (Watch: Billy Procida Says Owning a Home Regains Appeal.)
Founder of Procida Advisors and Procida Funding, Procida has been called Trump’s “original apprentice” due to his 10-year letter-writing campaign for a job with the famous developer and reality-television star. He worked his way from an unpaid position to vice president with the Trump organization.
Procida had advice for those thinking about buying real estate.
“If I’m talking to a consumer, a first-time homebuyer, a couple looking to move, I say if you have 5 percent or 10 percent of the value of the home you’re looking to buy, you should be buying because you’re going to look back 10 years from now and go, ‘Thank god I did.’ When liquidity returns to the market you will see things shoot up, and that will happen in two or three years,” he said.
The developer and mogul also urged staying within one’s means when buying.
“Would I be trying to reach today? No,” he said. “Would I be going out to middle of nowhere to buy? No. If you are buying a house because it is near where you work and you are going to stay there for a while, there is nothing like homeownership to build wealth. That’s a fact.”
For those who don’t have a down payment, Procida advised renting something cheap to build up savings. “Too many young people, I see, graduating from college go for their lungs and get no savings and they will never be able to buy anything. If you can get the deposit, interest rates are at all-time lows.”
This week, the average rate for a 30-year mortgage rate was 3.59 percent, just slightly above its all-time low.
Based in the New York metropolitan area, Procida also said he had a new investment vehicle: “Our new fund is called the 100-Mile Fund because I want to be investing 100 miles from right here because there’s no more land. Everything’s built out.”
For the big picture, Procida struck an optimistic note.
“The good news about America and our banks is sooner or later they will flood the market with liquidity and things will go crazy again, and you will go, ‘You know what? I’m not going to refinance this time and take everything out of my house and go on vacation.’ That’s where everybody got in trouble. It wasn’t that the house is not a wealth creator. It is,” he said. “They have nowhere to go in my opinion but up from here.”
Although mortgage rates remain at historic lows, home prices are beginning to rise.
In a heated market such as we currently find ourselves in, the slightest error can mean the difference between gold and going home. Using an experienced sales agent is more important than ever, and having all your paperwork in order may help catapult you to the top of the buyer’s line when putting in an offer.
There is no instant replay, do-over, or second chances when it comes to negotiating for that perfect home. Be smart and make sure you have the best representation there is.
A true Olympian never stops training for the gold and seasoned real estate professionals never stop perfecting their negotiating skills. The link below will give you a list of negotiating errors that buyers and their inexperienced brokers make.
Don’t let this happen to you.
When you are ready to buy or sell a property in the New York area, reach out to me and we can win gold together.