Matrix Blog

Records, Thresholds and Outliers

Bloomberg View Column: How Long Before a Home Lists for $1 Billion?

June 25, 2015 | 10:49 pm | BloombergViewlogoGray | Charts |

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Read my latest Bloomberg View column How Long Before a Home Lists for $1 Billion?. This post went #1 on the Bloomberg Terminal and on the public facing BloombergView.com site for about a day and a half. Crazy.

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Here’s an excerpt…

When a Los Angeles hilltop home that’s under construction was recently priced at a record half-billion dollars, it looked like a one-off in excess. The same thought occurred to me late last year when real estate investor Jeff Greene, who won big betting against the housing market before the financial crisis, priced his renovated Beverly Hills, California, home at $195 million…

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Palace: When A $500 Million Asset Is Not A Home

May 26, 2015 | 3:15 pm | bloomberg_news_logo |

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When I was called by Bloomberg News about a new Bel Air (LA) listing that was asking $500m and another one down the block by the same architect but different developer at around $400 million, my initial reaction was laughter. I wasn’t doubting that there could be a buyer somewhere out there somewhere…but rather at the absurdity of it. It also seems like a strike against it to have a nearby home done by the same architect, no?

As I told a bank executive/client this morning that it’s clearly a strange world when someone builds spec housing for a handful of buyers worldwide and no houses in the local market have ever sold close to half the proposed asking price (including Jeff Greene’s $195 million listing that has been on the market since December.)

At a combined $100k square feet (main house + 3 smaller houses), it will be bigger than “Versailles” a 90k square foot house outside of Orlando, Florida that was the subject of the documentary “Queen of Versailles.”

According to NAR, the U.S. median home sales price is currently $219,400.

If the Bel Air home is sold, it is doubtful this would end up as someone’s primary residence. Perhaps we should label this type of asset as something else besides a “home?”

How about a Palace?

That’s what the architect suggested:

“It’s very similar to a palace,” he said. “The house is about public functions rather than domestic living.”

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[Three Cents Worth #285 Ski] Aspen Real Estate Has Had Many Peaks, But It’s Not Peaking

May 22, 2015 | 8:00 pm | curbed | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed Ski, whether I’m on the trail or in the base lodge of a ski mountain near you…or I’m in the lift line taking notes with my gloves off.

Check out my 3CW column on @Curbedski:

For my first Three Cents Worth column on Curbed Ski, I felt compelled to provide a look at one of the priciest ski towns around: Aspen, Colorado. As a real estate analyst and appraiser for nearly 30 years (and a skier, of course!) I have relied on information culled during the research for the quarterly housing market report for Douglas Elliman. In Aspen, the first quarter of 2015 reflected a thorough shift towards larger home sales resulting in large aggregate housing prices gains…

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My latest Three Cents Worth column: Three Cents Worth: Aspen Real Estate Has Had Many Peaks, But It’s Not Peaking [Curbed]

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[Three Cents Worth #276 NY] Proving New York’s Blockbuster $100M Sale Is An Outlier

January 22, 2015 | 1:08 pm | curbed | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out my 3CW column on @CurbedNY:

Finally, after nearly two years of referring to the $88 million sale at 15 Central Park West as the “highest Manhattan residential sale on record,” we get a change of scenery. A new record was set with the $100.47 million sale of the penthouse at One57 recorded late last week. Timing is everything, although, in this case timing really wasn’t. I believe this sale went to contract in 2012, which would be shortly after the $88 million sale went to contract in December 2011 and closed in early 2012. While these super luxury sales are more of a circus sideshow and have little, if anything, to do with the vast majority of the Manhattan housing market, I find them surreal to consider…



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My latest Three Cents Worth column on Curbed: Three Cents Worth: Proving New York’s Blockbuster $100M Sale Is An Outlier [Curbed]

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Bloomberg View Column: Living the High Life

January 22, 2015 | 11:24 am | BloombergViewlogoGray | Charts |

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Read my latest Bloomberg View column Living the High Life.

Please join the conversation over at Bloomberg View. Here’s an excerpt…

Never have so many residential buildings had such lofty aspirations. Based on the number of stories in buildings worldwide that are more than 650 feet (200 meters) high, we’re in the midst of an edifice eruption. An even bigger surge is forecast for next year. The interest in what might be called pinnaclenomics has been driven by capital seeking higher returns in hard assets like luxury real estate in the world’s financial centers — especially in developing nations….

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Some other related content on the tall building phenomenon:


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Bloomberg View Column: The $10 Million Home, Never Hotter

November 30, 2014 | 1:00 pm | BloombergViewlogoGray |

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Read my latest Bloomberg View column The $10 Million Home, Never Hotter. Please join the conversation over at Bloomberg View. Here’s an excerpt…

As the U.S. housing market cools from last year’s overheated state, sales of homes at the top haven’t been following the same script. Prices and sales at the upper reaches are soaring…

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[Three Cents Worth #271 NY] How New York’s Average Sales Price Broke the $1 Million Mark

November 4, 2014 | 4:00 pm | curbed | Columns |

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out my 3CW column on @CurbedNY:

Although it has been a little more than a month since the third quarter ended, I thought I’d show that the average sales price of the five boroughs in aggregate broke the $1 million threshold for the first time, to a record $1,040,516…

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My latest Three Cents Worth column on Curbed: How New York’s Average Sales Price Broke the $1 Million Mark [Curbed]

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Bloomberg Surveillance TV – Guest Host 9-25-14 : Housing and bendable iPhones

September 25, 2014 | 1:40 pm | bloomberg_news_logo | TV, Videos |

Was asked to guest host this morning for the 7-8am hour on Bloomberg TV’s Surveillance. Tom Keene, Scarlet Fu and Adam Johnson team up for a must-watch show every morning.

In the first clip we talk Manhattan Luxury market problems and records. In the second clip we banter about the bendable iPhone Plus and housing as an investment. These two articles likely prompted my invite:

NYC Luxury-Condo Buyers Await New Towers as Sales Slow [Bloomberg News]
NYC’s Most Expensive Condo to Be Listed at $130 Million [Bloomberg News]

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[Three Cents Worth #267 NY] NYC Sets New Record Average Sales Price

August 5, 2014 | 3:17 pm | curbed | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out my 3CW column on @CurbedNY:

Although our NYC market reports only cover Manhattan, Brooklyn, and Queens, I also track Staten Island and The Bronx for fun. For the second quarter 2014 NYC analysis, I observed two new records:

1. The average sales price for NYC residential real estate (co-ops, condos and 1-3 family sales) reached a record $975,441 (pink line).

2. The average sales price for NYC residential real estate excluding Manhattan reached a record $542,216 (orange line).



2q14NYC-ASPspread [click to expand charts]


My latest Three Cents Worth column on Curbed: NYC Sets New Record Average Sales Price [Curbed]

Three Cents Worth Archive Curbed NY
Three Cents Worth Archive Curbed DC
Three Cents Worth Archive Curbed Miami
Three Cents Worth Archive Curbed Hamptons

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Cluttering Luxury Housing Markets with Listings Made for TV – Manhattan Edition

June 28, 2014 | 4:55 pm | wsjlogo |

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[Source: WSJ]

A little over a week ago the WSJ’s Candace Taylor broke the story about 3 contiguous listings to be marketed together at the top of a 15-year old ground lease condo in Battery Park City for $118,500,000.  At 15,434 square feet, that works out to $7,678 per square foot.  CNBC’s Robert Frank provides more details in a video tour that was broadcast shortly after the story broke.

Normally I don’t bother to do the math on this sort of thing but after the Cityspire listing a while back, I thought I’d tweak my thinking a bit as the luxury market gets more than its fair share of confusing “milestones.”

Doing the Math
Here’s my listing price logic using content in the near viral news coverage of the record Battery Park City listing – I break down the 3 units:

$56,500,000 ($7,406/sqft) listing - 7,628 sqft 5-bed listed last year for 5 days and removed.

$11,700,000 ($3,330/sqft) purchase - 3,513 3-bed in April 2014.

$19,000,000 ($4,425/sqft) listing – 4,293 sqft 4-bed $23M January listing dropped to $19M, then removed.

$87,200,000 is the aggregate total for the 3 units that total 15,434 square feet ($5,640/sqft). The current list price of $118,500,000 represents a $31,300,000 premium for the combination of all 3 units before we might assume the millions in renovations to combine if you believe that the $87,200,000 total is what aggregate of the individual properties are worth.

Given the $3,330 ppsf recent sales price of the 3-bed and the unable to be sold for $4,293 ppsf after 6 months on market 4-bed and the not-market tested 5 day listing period 5-bed at $7,406, I can’t figure out how the listing agent gets to $7,678 ppsf as an asking price for all 3 together before the cost of renovation to combine? Perhaps the seller set the price.

The listing broker tells us that the pricing “is justified by the square footage“, as well as the views and building’s amenities.”

Got it.

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Manhattan Penthouse Co-op Sold For 2nd Highest PPSF in History

June 9, 2014 | 2:57 pm | Milestones |

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Real estate reporter Katherine Clark at the New York Daily News got the scoop on the $70,000,000 penthouse sale at 960 Fifth Avenue, the highest price ever paid for a Manhattan co-op apartment. Curbed New York lays out all the (pretty?) pictures.

The previous record was held by David Geffen, who paid $54,000,000 in 2012 for the Penthouse at 785 Fifth Avenue. Although the Geffen penthouse was renovated, it was 12,000 square feet, more than twice as large as the 5,500 square feet within the penthouse at 960 Fifth Avenue – that just sold for a record price of $70M.

To further illustrate how much more expensive this new record price actually is, take a look at the two highest Manhattan co-op sales prices achieved, but on a price per square foot basis:

David Geffen paid $4,500 psf for the penthouse at 785 Fifth Avenue for the then record price of $54,000,000.

Nassef Sawiris paid $12,727 psf for the penthouse at 960 Fifth Avenue for the new record price of $70,000,000. On a sales price basis, the new record is 29.6% higher than the old record of 2 years ago.

On a price per square foot basis, the record sale was 182.8% above the previous record sale price set two years ago.

With all the attention focused on the newish or new development residential condo market, the all-time price per square foot apartment record was set 2 years ago, around the time of the Geffen purchase.  A Russian oligarch paid $88,000,000 for Sandy Weill’s penthouse condo that works out to $13,049 per square foot. That record breaking sale was largely viewed as a market outlier, that the buyer overpaid as part of a larger divorce strategy – since it was 31% higher than the previous record in the year prior within the same building.

Some other oddities about this new record co-op sale at 960 Fifth Avenue:

  • The 960 Fifth Avenue co-op board is old world and I’ve heard it is fairly tough. As a general statement, it is not that common to see a foreign buyer at the high end of the market approved by a co-op board.
  • The news coverage suggested the buyer was slow to pay his taxes and negotiated a reduced amount with the government. This would be a concern for most co-op boards in terms of collecting maintenance charges in arrears from a foreign national if they stopped paying.

Since these conditions would probably make any high end co-op board nervous, perhaps this is a sign that shareholders (board members are also shareholders) are concerned about damaging potential property values by limiting the universe of people that would be able to afford these types of prices in this new market condition.

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The $100M+ US Home Sale Trifecta – Without NYC – 2014 Edition

May 6, 2014 | 5:23 pm | Milestones |

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With the $147M sale in East Hampton, NY, it has been a busy couple of weeks for the .0000000000000000001% of the home buying public in the US. With the 3rd US home sale to close above $100M in 2014, it has left many thinking – why isn’t NYC in the fray?

After all, NYC arguably legitimized the US “trophy sale” frenzy a few years ago when Sandy Weill sold his penthouse at 15 Central Park West to a Russian oligarch for double what he paid for it. I’ve argued that this $88M sale was the launchpad for the new trophy market in NYC even though the transaction appears to be a divorce strategy. After that sale closed, the subsequent trifecta of trophy sales back then seems relatively affordable now.

As journalists tell me…three data points make a trend.

2014 US Sales over $100M
$147,000,000 Further Lane, East Hampton, NY
$120,000,000 Copper Beech Farm, Greenwich, CT
$102,000,000 The Fleur de Lys, Los Angles, CA

So is the era of US $100M+ sales a trend?

Yes, although it is probably more accurate to call it a “phenomenon” than a trend.

In NYC? Eventually.

To a few real estate brokers I engaged with on this topic, the idea that NYC would see the $100m threshold broken in 2014 seemed inevitable, only because of this 2014 US trifecta. It is the belief that we are experiencing a momentum swing over the $100m threshold because 3 sales by May, compared to a sale a year means a shift.

Meh. I view this phenomenon as “product-specific” and not “location-specific.” There is a randomness to the locations where these sales occur. However I do believe the probability is high that NYC will see such a sale in the not too distant future.

Then again, does it really matter? Do these $100M+ sales have anything to do with the remainder of the US housing market? No they don’t. But it’s fun to talk about.

The Manhattan $1M Average Sales Price Threshold broken in 2007
I remember when the Manhattan $1M average sales price threshold was broken in 2007, foreign media went gaga, struggling to find a deeper meaning to housing. There wasn’t. I always viewed it as simply a number on the spectrum.

Affordable Irony
Definitive proof that I have “hipster” tendencies – my never ending search for irony.

Yesterday’s announcement of the 3rd US $100m+ sale was one of record breaking irony: the announcement of NYC mayor’s 10-year plan to create 200k affordable housing units. The need for affordable housing – low and middle income – has always challenged NYC. The mayor’s affordable housing plan “moon shot” as the New York Times has described it came out on the same day as the $147M East Hampton sale story broke. Irony.

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