I’ll let this soak in.
New development sales are significantly detached from the balance of the market. I selected average sales price to exaggerate the trend to make my point.
[Click to expand]
I took a look at the change in new development inventory versus re-sale inventory both by year-over-year change (quite dramatic) and number of units. Both categories bottomed out at the end of 2013.
These trends are based on Manhattan co-ops and condos which represent more than 98% of the “non-rental” market. Much of the new inventory coming online is located within the “luxury” market which is the top 10% based on price.
[click to expand]
The New York Post ran an article on Sunday “Chinese buyers snapping up NYC skyscrapers” that was chock full of Manhattan skyscraper renderings – I found myself clicking through all of them. While I already am familiar with each of these residential and commercial towers, I never get tired of looking at them.
While I’m no architectural critic and some of these designs are controversial, even cited as dangerous, I must admit I really like the genre. I was fatigued from enduring the boring, utilitarian and ultimately generic designs throughout the 1980s and 1990s. We got a sampling of this new genre in the last new development boom a decade ago, but with the shift towards the higher end of the market, there seems to be more money available for creating iconic designs.
As far as the China hyperbole cited in the piece, it is an assumption based almost exclusively on anecdote as well as 2013 research by National Association of Realtors (cited as “US National Real Estate Association” but had no luck finding it with Google so I assumed they meant NAR). And how do we rely on an NAR survey of it’s members when so few Manhattan real estate agents are members of that trade group?
I’ve inserted all the renderings below: I’m not going to bother labeling them since that’s not the point – you can get that detail in NY Post piece. These are placed here for your oogling pleasure.
I read Mike Mulligan and his Steam Shovel nearly every night to my 4 sons when they were younger (probably an unnecessary qualifier). It was also my favorite children’s book as a kid.
So, many of the squares of the capital’s super-prime real estate, from Belgravia and Chelsea to Mayfair and Notting Hill, have been reconfigured house by house. Given that London’s strict planning rules restrict building upwards, digging downwards has been the solution for owners who want to expand their property’s square-footage.
This trend reflects the appraisal concept of highest and best use for the equipment despite the inherent wastefulness. Does it make sense to leave the equipment in the basement? With all the concern in the US about below grade empty oil tanks and the environment, I wonder how this practice is allowed, cost effectiveness aside.
Given the exceptional profits of London property development, why bother with the expense and hassle of retrieving a used digger – worth only £5,000 or £6,000 – from the back of a house that would soon be sold for several million? The time and money expended on rescuing a digger were better spent moving on to the next big deal.
You really need to read the book.
There are said to be at least 105 million and maybe as many as 2 billion parking spaces in the United States. A third of them are in parking lots, those asphalt deserts that we claim to hate but that proliferate for our convenience. One study says we’ve built eight parking spots for every car in the country.
About the size of Delaware and Rhode Island combined…
The problem is that much of the vast “craters” of parking lots in urban centers are empty. NPR’s Planet Money does a good job explaining how the “free market” can be applied to parking space usage.
The price should be cheap enough that most of the metered spaces and city parking lots are always almost full.
But it shouldn’t be so cheap that spaces are entirely full, leaving drivers frustrated and adding to congestion as cars circle endlessly looking for a place to park.
[Source: NY Post, click to expand]
I’ve had this page bookmarked all week and found myself referring to it periodically for the above sort-of infographic. Lois Weiss lays it all out in her article, clearly titled: This is what a penthouse on top of the Woolworth Building could look like
At one point in time, the Woolworth Building was the tallest building in the world, so this apartment would have been the highest condo in the world (ok, ok, condos weren’t around back then).
This morning, I got to join Tom Keene, Adam Johnson and Cristina Alesci on Bloomberg TV’s Surveillance to talk housing for the 6am to 7am hour. Definitely worth getting up at 4am to make into the studio. No, really!
Covered a lot of ground this morning on the show. Here’s another clip.
I saw the documentary: ZIPPER: CONEY ISLAND’S LAST WILD RIDE (here’s the trailer) over the weekend on the land use battle in Coney Island. I like the filmmakers’ focus on the guys that ran the “Zipper” (the ride is guaranteed to make me throw up) to humanize the development battle between NYC, Coney Island residents and the developer. Plus you can’t go wrong with a good Blue Oyster Cult song in the opening.
After watching the documentary (you can purchase or rent it here), you can’t help but see how difficult it is to develop property in NYC striking a balance between community needs with economic feasibility as well as navigate political power and government.
This difficulty is a key reason why residential housing costs are so high in most urban markets.
Still, a new ride in Coney Island was just opened – The Thunderbolt Roller Coaster.
This video gives you a good sense of the excitement, if not frenzy in the residential development space in New York City. There was a long line of people waiting to enter the venue for the event when I arrived.
The Real Deal has posted the full video of the panel discussion I participated on last week with developers Steve Witkoff, Miki Naftali and Michael Stern. The Real Deal’s publisher Amir Korangy deftly kept the conversation going and candid, despite the technical challenges, sweltering heat and a heckler (i.e. just another day in NYC).