Matrix Blog

Rentals, Investing

Brooklyn Rentals: Coolness doesn’t come free

April 11, 2014 | 10:07 am | Public |

4-2014qzmanhattan-brooklyn-rentspread [Source: Quartz]

Rob Ferdman over at Quartz writes a great breakdown of the narrowing rental spread between Manhattan and Brooklyn using the data I crunch for The Elliman Report: Manhattan & Brooklyn Rentals. Here’s my version of the chart.

After I designated last week’s Bloomberg story headline “Brooklyn’s Hipster Economy Challenges Manhattan Supremacy” as my favorite new phrase, specifically:

Brooklyn’s Hipster Economy

Quartz has given me a new favorite phrase (see under original chart):

Coolness doesn’t come free

.

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[Infographic] Looking at the Manhattan and Brooklyn Rental Markets 3-2014

April 10, 2014 | 12:00 pm | | Infographics |

Entering the world of infographics, here are some highlights from our just released Elliman Report: Manhattan & Brooklyn Rentals 3-2014

ManhattanBrooklyn3-14INFOGRAPHIC


New Record of Foreign-owned Assets in the United States

March 27, 2014 | 4:06 pm | |

3-14commerceForeignInvestors

According to the WSJ Real Time Economics Blog there are the record investment gains. This is good news/bad news…and:

has worried some economists, because it makes the U.S. more vulnerable to major shifts in the global economy. But it also could show strengthening confidence in the American economy.

These gains are largely due to the rising US stock prices rather than more investment. However in the housing sector, I do think rising property values are attracting even more new capital for investment – whether for new development or unit purchases. We can see this in markets like New York City and Miami. Foreign investors seem to be chasing safety and a long term equity play.

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The Manhattan & Brooklyn Rentals Side-by-Side Trend Comparison

March 20, 2014 | 12:50 pm |

Given the discussion about the narrowing gap between the Manhattan and Brooklyn Rental markets, I thought I’d place the rental price trends side by side to get a sense of how the two markets match up.

Manhattan
While the year-over-year Manhattan rental numbers have fallen short of the prior year, rents have remained fairly stable over the past 6 months:

2014-2Manhattan-medianYoY
[Click to expand]

Brooklyn
Brooklyn rental prices have been trending sharply higher to the point where the rental price spread between the two markets is at it’s lowest level every recorded (since 1/2008):

2014-2Brooklyn-medianYoY
[Click to expand]

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[Leverage] Calculating Your Home Investment Return Realistically

March 16, 2014 | 9:00 am | Infographics |

leverageinfographic
[click to expand]

I think many, if not most people calculate the return on their home as an investment as this CNN/Money calculator does. After seeing this, I whipped up a theoretical infographic illustrating how the use of leverage in a home purchase factors in to your return. It’s super simplistic, not factoring in opportunity cost, use and enjoyment, tax deductions, improvements and other factors because I wanted to show the power of leverage.

Forget about price indices like Case Shiller or similar. I can’t tell you how many times I have seen a home price index paired up against a stock price index as a way to determine which investment is better. Apples and oranges.

Measure your ROI using what you invested (down payment) and what your home equity expanded (or contracted) to.

The CNN/Money rate of return calculator is really only a measurement of home price appreciation compared to the same period for stocks and bonds as an opportunity cost – comparing different asset types side by side – yet that’s not how the majority of homebuyers interact with their home as an investment.

It’s most often about leverage.

UPDATE
An appraisal colleague and friend of mine pointed out that in my original version, I incorrectly used the word “profit” within the infographic rather than what I was actually talking about: “equity” ie return on investment (ROI) – how much the original down payment gained over time. The numbers all remained unchanged.

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[Chart] The Manhattan-Brooklyn Median Rental Price Smackdown

March 15, 2014 | 1:57 pm | | Charts |

2014-2MBmedianspread

The rental price spread between Brooklyn and Manhattan is narrowing. At $210, the month of February saw the lowest differential between the median rental price of Manhattan and Brooklyn’s North and Northwest regions.

While Manhattan rents have leveled off, Brooklyn rents have continued to rise sharply – a combination of rising demand as well as a shift in the mix towards luxury rentals.

A decade ago, who would have thought we’d be talking about Brooklyn this way?

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Safety First: Explaining Flood of Asian Investors Into Western Real Estate

March 15, 2014 | 12:50 pm | |

This is a good interview with Alistair Elliott, senior partner and chairman at Knight Frank by Josh Noble of FT about the buying binge of Asian investors in many major global cities like London, Vancouver, Sydney and New York City…”mature financial cities.”

Institutional investors come first, then developers and then private investors. The phenomenon is at it’s very early stages.

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Talking Rental Markets on Bloomberg TV’s ‘Street Smart’

March 14, 2014 | 5:54 pm | | TV, Videos |

Had a great conversation with Trish Regan on her Bloomberg TV show “Street Smart” about the Manhattan and Brooklyn rental markets and rent versus buy. This was in connection with the February Elliman rental report we published earlier that day.

It was windy and 18 degrees outside so I think I look a bit disheveled. But always fun to connect with everyone at Bloomberg whenever I visit (and maintain my Foursquare mayorship of the “green room”).

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February 2014 Manhattan and Brooklyn Rental Report Released

March 14, 2014 | 12:44 pm | | Reports |

Rental_0214

Douglas Elliman published the Manhattan/Brooklyn rental report that I author. This monthly report is part of an evolving market report series I’ve been writing for Douglas Elliman since 1994. We discontinued the quarterly rental report series but still present the information in our aggregate database.

MANHATTAN

  • Prices fell from year ago levels for the 6th consecutive month.
  • Rental prices have essentially remained flat since last summer.
  • Median rental price spread between Manhattan and Brooklyn (N. NW regions) was $210, narrowest tracked (since January 2008).
  • The use of concessions by landlords nearly doubled and vacancy rate edged higher.

BROOKLYN
[North, Northwest Regions]

  • Rental price indicators continued to push higher.
  • New rental activity jumped as tenants scrambled for improved affordability at time of lease renewal.
  • Price gains in studio and 1-bedrooms as 2-bedroom and 3-bedrooms weakened.
  • Marketing times remained largely unchanged but negotiability between tenants and landlords tightened.

Here’s an excerpt from the report:

MANHATTAN For the sixth consecutive month, the year-over-year median rental price fell below the prior year level. Median rental price declined 2.8% to $3,100 from the same month last year. As a result, rental prices have generally remained flat on a monthly basis since last summer. The other price indicators also showed similar declines. Average rental price slipped 0.6% to $3,932 and average rental price per square foot fell 3.7% to $49.70 respectively from the same period last year…

BROOKLYN All rental price indicators continued to post year-over-year gains. Median rental price rose 11.6% to $2,890 from the same period a year ago, marking the ninth consecutive monthly gain. These results outpaced the luxury market, whose median rental price increased 4.5% over the same period. Average rental price expanded 2.6% to $3,178 and average rental price per square foot increased 3% to $38.12 over the same period…




The Elliman Report: 2-2014 Manhattan/Brooklyn Rentals [Miller Samuel]
The Elliman Report: 2-2014 Manhattan/Brooklyn Rentals [Douglas Elliman]
Miller Samuel Aggregate Database [Miller Samuel]
Chart Gallery (Brooklyn Monthly) [Miller Samuel]
Chart Gallery (Manhattan Monthly) [Miller Samuel]
Chart Gallery (Manhattan Quarterly) [Miller Samuel]


2014 Knight Frank Wealth Report Goes Interstellar

March 6, 2014 | 1:00 am | |

PIRI2014
Source: Knight Frank

Knight Frank just released their 2014 Wealth Report which takes a look at the investment trends for ultra high net worth individuals (aka UHNWI’s defined as $30M+). It’s chock full of investment insights, including real estate. We provided some data/insight to the report (translation: a very tiny portion). Yesterday I mentioned their crazy new Asteroid Index yesterday.

Here are a few topics covered in the report:

kfglobalwealthdistribution
Source: Knight Frank [click to expand]

kfcityrank
Source: Knight Frank

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Knight Frank’s Asteroid Index

March 4, 2014 | 10:22 am | |

kfasteroidndex
[click to expand]

Knight Frank, my friends across the pond, go interstellar in this incredibly detailed info graphic excerpted from their new Wealth Report To Infinity and Beyond for Property They also include a link to their interview with Richard Branson on the post.

The Wealth Report 2014 highlights the rising trend for private wealth investment in space research — from asteroid mining to sub-orbital space travel. Knight Frank has identified more than 70 wealthy individuals, with a combined wealth of over US$200 billion, who are targeting this growth sector. The investment promises to transform terrestrial property markets.

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[Three Cents Worth #260 NY] Looking At Manhattan’s Mortgage History

February 25, 2014 | 3:23 pm | | 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:

In this week’s column, I thought I’d look at something near and dear to our economic hearts: tracking rental versus mortgage payments in Manhattan. Above, you’ll find Manhattan’s median sales price for co-ops and condos, as well as median rental prices, plotted against a theoretical monthly mortgage payment. At first I was using this to present the rent-or-buy decision, but the visual became a little more than that.

For the mortgage payment estimation, I used generic defaults of 20 percent down and 30-year fixed Freddie Mac mortgage rates using median sales prices as the anchor—understanding that a 20 percent down payment has not been a constant over the past 20 years. Although I’m only tracking principal and interest on the payment, I’m not factoring in the tax deduction either, so the offset is somewhat reasonable in this simple visual. Here’s what I found:…

3cwNY2-25-14
[click to expand chart]

 


My latest Three Cents Worth column on Curbed: Looking At Manhattan’s Mortgage History [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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