Crains New York Business Economic Spotlight Chart – March 2006

March 20, 2006 | 12:05 am | | Charts |

For the past several years, I have provided a chart that appears once a month in the Economic Spotlight section of Crain’s New York Business magazine. Here is this month’s chart appearing in the current issue of Crain’s New York Business.

Please go here for an archive of all Crains’s New York Economic Spotlight charts that have I created for them. They are organized by year.

Source: Crain’s New York Business


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Gothamist: Larry Sicular and Jonathan Miller on the Stamford Review

March 10, 2006 | 12:46 pm | | Public |

A few weeks ago, I submitted a post about the release of Larry Sicular’s Stamford Review and the two articles I had contributed [Matrix]. The Gothamist posed a series of questions to us:

  1. New York is already Overcrowded– in this issue of the Stamford Review one of the authors writes that Flushing is more dense than San Francisco, and Staten Island is as dense as Seattle. What’s the most overcrowded part of the city?
  2. The article also says that developable land is running out. Since new building starts are accelerating, and new people are immigrating to the city every day, what happens when the land runs out?
  3. Rich people will obviously be able to afford apartments no matter how expensive they get– but where will all the poor people go? And should NYC be doing anything to protect them?
  4. What neighborhoods are going to be targets for this massive redevelopment?
  5. In many neighborhoods, like Red Hook, we’re seeing historic buildings get torn down and replaced by big box stores and ugly new residential developments. Is that an inevitable consequence of the city’s growth?
  6. What’s the deal with Governor’s Island? Should the city be using that for housing?
  7. People in their late 20s and early 30s are facing a pretty tough situation with very high housing prices– do they have a prayer of seeing things improve, or are we going to soon face a situation like Tokyo’s, where middle-class families of four live in 500 sqft or less?
  8. If you had to pick three neighborhoods that offered the best value for a new couple purchasing their first home, what would they be?
  9. What are the biggest misnomers and bad ideas about today’s housing market?

Here’s a brief overview, links and answers to these questions posed by the Gothamist.

Reconfiguring New York City [Matrix]
Download the report for free [Stamford Review]
On the Reconfiguration of New York City [Curbed]
That Toll Plaza Feeling at 109th and Broadway [Curbed]



Starchitects Get Top Billing And Top Billings

March 10, 2006 | 12:01 am | Public |

In order to diferentiate their residential projects from one another as competition increases, developers are enlisting the services of name-architects…a.k.a. Starchitects. I wrote an article [Miller Samuel] on the phenomenon in the current issue of New York Living magazine which I periodically write articles for. [shameless plug -ed]

The use of Starchitects is growing in popularity as a marketing tool nationwide as inventory increases. It is also an added soft cost, so the use of this branding vehicle is placing more pressure on the bottom line.

I suspect that the growing cost of development (land prices, construction costs, along with marketing costs) will significantly stifle new products in the planning stages in the near future.

Here’s an excerpt:

The current Manhattan real estate new development scene is all about who instead of what. Branding has reached the housing market as a necessary and effective marketing tool to differentiate development projects as they enter the market. The housing boom prompted the explosive growth in creativity with condominium design as capital became more readily available to developers. This shift has been seen as a big step in a market that historically paid more attention to the exterior, rather than the interior of a building. Marketing has now morphed into the whole package, both inside and outside, including common areas and ancillary services. This creative packaging now includes bringing in a brand-name architect or other professional to leverage their reputation as an enhancement to the development….



The Pendulum Swings Back To The Middle

March 6, 2006 | 12:05 am | Public |
Source: NYT



In Saturday’s front page story In Hoping for Best in Home Sales, 2 Sides Sit Tight [NYT] Vikas Bajaj and David Leonhardt explore the state of balance that is returning to the real estate market: As a result, the housing market is now in a deeply confusing state, with average prices still rising even though homes are taking much longer to sell and the number on the market has soared. Sometime soon — probably in the spring, the peak sales season — one side or the other will have to capitulate, many economists and industry executives predict.

(shameless plug: This article used our stats for Manhattan and NAR for the remainder of the country.)

One of my main concerns about a shift in the pendulum has been the void that occurs between buyers and sellers and how long it lasts. Will the sellers cave and be more negotiable or will the buyers simply walk away?

Right now, its been a little of both as the number of transactions have clearly declined but prices are holding, if not rising. Cendant describes it as a pregnant pause, a disconnect between sellers and buyers.

In Stephanie Rosenbloom’s front page real estate section article A Slower Market, With Wall Street Fizz [NYT] she describes the market as more sober and measured. The pace has slowed, there is more inventory and buyers are taking time to shop around.

(shameless plug: this article uses our stats as well.)

Buyers have more inventory to choose from and properties are staying on the market longer. She comments on how Wall Street bonus money is so important to the Manhattan market and uses this quote: “We are so dependent on the money from Wall Street,” said Mr. Lewis. “If Wall Street is a shark, the real estate industry is the thing that cleans its teeth.”

Basically, the message in the article is that the market is still doing fine but its not as frenzied as in years past. One item I thought was interesting was that buyers are waiting longer to make offers and at lower amounts yet are often surprised to find that the apartment has already been sold. If you believe all that you read, you have the impression that there are no buyers out there.


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Real Estate Blogs [Part II]: Speaking To People We Don’t Know, For Reasons We Can’t Explain

March 6, 2006 | 12:02 am | | Public |

I love the Real Deal magazine – definitely filling a needed void in real estate coverage. Brownstoner wouldn’t divulge where he gets those cool masks from (see photo). However, after reading this article, I think that the real estate blog topic is now officially passe as a news feature (unless Matrix is featured).


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Curbed: Three Cents Worth: Bracket Creeps Us Out

March 1, 2006 | 2:44 pm | | Columns |

Here is my Wednesday post for Curbed, the mother, father & sister of all real estate web logs.

Curbed: Three Cents Worth: Bracket Creeps Us Out

An archive of previous posts can be found here.


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Real Estate Blogs: Speaking To People We Don’t Know, For Reasons We Can’t Explain

February 28, 2006 | 8:56 am | | Public |

Here’s a couple of press hits that covered Matrix recently that crushed us with traffic. I appreciate everyone’s interest in checking in with Matrix, especially all the people I nag incessantly (you’re not off the hook).



Gentrification: Too Much Of A Good Thing?

February 27, 2006 | 12:01 am | Public |

[The Stamford Review] makes the well-documented conclusion that New York City may face a total build-out crisis in seven to 10 years, reported in its most recent issue, all the more alarming.

Source: 70’s Alphabet City by FilthyMess.com

This press release provides an overview of the current issue [Stamford Review]. Stamford Review editor Larry Sicular states:

The city depends on housing construction to help support its economy, but by the time a child born here today reaches the fourth grade there may not be any vacant land left for development,” said Larry Sicular, publisher/editor of The Stamford Review. “Focused on following the strengthening or weakening real estate market, few people have stopped long enough to look forward to the very difficult planning decisions facing us.

I have known Larry for more than 20 years and I jumped at the opportunity to contribute two articles to the current issue:

Here are the portions of the press release that pertain to the Gentrification article:

  • As Manhattan has gentrified, pricing differentials among neighborhoods like Tribeca and the Upper West side have dramatically slimmed down, by 35% since 1989. (Miller, Miller Samuel Inc.)

  • High land prices are forcing developers to create bigger, more profitable units, but demand has shifted to mid-sized units. A growing supply of unsold, large, pricey units is the result. (Miller)

  • New developments in emerging New York City neighborhoods now cost almost as much for homebuyers as those in established markets. (Miller)

Here are the portions of the press release that pertain to the Media article:

  • In 2005, the media were so determined to find bad news about a housing bubble that they oversimplified and drew misleading conclusions about market statistics. (Miller)

  • Now, after two consecutive quarters of quiet markets, the media has adjusted its terminology from a “bubble ready to burst” to a “soft landing” or a more “normalized” market. (Miller)


Judging A Book By Its Cover: David Lereah Changes Titles

February 23, 2006 | 12:06 am | Public |

According to Bubblemeter, David Lereah, the Chief Economist for the National Association of Realtors (NAR) is changing the title of his real estate book (as seen on Amazon) from:

Are You Missing the Real Estate Boom? to _Why the Real Estate Boom Will Not Bust._

Notice how the word BOOM is the same size and the graphics are identical? The Walk-through’s Old Fish In A New Wrapper says the content is the same – Damon Darlin’s post provided a pretty good chuckle.

I had the chance to meet David Lereah in the green room before the taping of CNBC’s Town Hall: Real Estate Boom last year. It was me, Suze Orman, Robert Shiller and David Lereah. Surreal to say the least. All very nice I might add. I only had a small appearance – these people were the main characters in this production.

Mr. Lereah has provided a tremendous amount of fodder for the blogosphere, myself included. Up until now, its been the use of language which would seem to be misleading. Now its book titles. This sort of stuff might have worked 5 years ago but not today. People have access to information almost immediately.


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Reconfiguring New York City: A Series Of Articles In The Journal The Stamford Review

February 22, 2006 | 10:25 pm | | Public |

The Stamford Review, Spring/Summer 2006 is the third issue and was just released. It can be downloaded for free on their web site after a simple registration or hard copies can be purchased for a nominal fee. The intention of the publication was to bring together a diverse group of writers who are passionate about their topics to write about issues that affect New York City real estate, land use, architecture, and urban affairs.

See the author list below.

Shameless plug: I wrote two articles for this publication The Gentrification of Manhattan and Manhattan’s Housing Market and the Media

I hope you enjoy them.

Larry Sicular is the editor and has been a professional colleague of mine for 20 years. The journal, which is a labor of love for him, takes a monumental effort to coordinate, edit and publish and I truly appreciated the opportunity to be in it.

In the introduction of the publication, Larry describes the current issue as being:

…about the reconfiguration of New York City, a physical transformation that has been fueled by a mixture of population growth, increased affluence, and an unusually strong housing market. What is happening here is mirrored to varying degrees in successful cities elsewhere in this nation and across the globe.

Here, nine experts praise and critique city government’s efforts to guide this transformation, to meet and balance growing demands for market housing, affordable housing, open space, industrial space, and historic preservation. Even as the housing market softens, these policies will have long-term effects and will continue to be debated.

In recent years it has been easy to forget Jonathan Miller’s reminder that twenty years ago Manhattan’s housing market relied on government tax policy to stimulate demand. Julia Vitullo-Martin applauds the results of public and institutional investment in the Bronx, but she notes that destructive government policies helped depress the borough in the first place.

Much of our attention is drawn to the city’s extensive rezoning of former industrial areas on the Brooklyn waterfront and the west side of Manhattan. Frank Braconi questions whether these initiatives are sufficient to meet the needs of our growing population, while Kimberly Miller and Mark Alexander address what will be required to make the rezonings a success. Peter Beck shows us that limited public resources, directed to these areas for affordable housing, could perhaps be more effectively spent, while Lisa Kersavage shows us how rezoning need not have cost us valuable historic resources. Pamela Hannigan praises the city policy that is creating new industrial business zones in order to preserve and stimulate the valuable manufacturing resources that remain.

And then there is Governors Island. Is there a greater possibility for adding a jewel in our crown than the history and open spaces that this island offers and represents? Our third issue is dedicated to the possibilities of Governors Island.



Crains New York Business Economic Spotlight Chart – February 2006

February 21, 2006 | 10:38 am | | Charts |

Every month, I provide data and analysis for a chart that appears once a month in Crain’s New York Magazine. Here is this month’s chart appearing in this week’s issue of Crain’s New York Business for what seemed relevant in the real estate housing market at that time. I really enjoy dealing with this publication.

Please go here for an archive of all Crains’s New York Economic Spotlight charts that have I done. They are organized by year.

Source: Crain’s New York Business


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A Leaky Roof But Housing Market Remains At Watershed

February 17, 2006 | 12:01 am | | Public |

In Howard Gold’s Fighting The Tape column Is It Crunch Time for Housing? [Barron’s], he suggests that this spring determines how the residential housing market, which is one of the key contributors to the economic recovery, will behave over the next several years.

The points he makes are:

Inventory is up [WSJ]
Toll Brothers reports a 29% drop in orders

Mark Zandi of Economy.com writes: I don’t think nationwide you’ll see a bust,” says Mark Zandi, chief economist of Moody’s Economy.com. But we might in certain markets, he adds — the usual suspects like Miami, Las Vegas and Phoenix.

(and we can’t omit moi)

This is a watershed moment,” says Jonathan Miller, president and chief executive officer of Miller Samuel, a large New York real-estate appraisal firm. “If we’re going to see trouble, it’s going to be over the next 12 to 18 months.

What I mean by this is the following: Bernanke indicated today that the economy is very strong and so is housing. It has been speculated that he has at least two more rate increases in store for us until he takes a breather. That will further weaken the housing market as things continue to get more expensive for the ARM mortgage customers who largely financed the housing boom.

It’s a three- to five-year cycle on the downside,” says Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley. Rosen calls himself a real-estate bear who endorses the doom-and-gloom scenario of Yale University professor Robert Shiller.

We’ve already passed stage one, characterized by “a falloff in new sales and orders,” says Rosen, and are just entering stage two, in which unsold inventories build up.

Inventory and mortgage rates are the key concerns.

In Nicholas Yulico’s article Housing Starts Explode [TheStreet.com], January new housing starts increased 12.8% above December. Initial reactions from optomists said that this was evidence that the housing market was back. Actually, the surge was due to unusually warm weather for December which enabled builders to build. This will compound inventory problems since inventory was already rising without help from new construction.

(In the Barron’s piece, I close out with moi)

“The boom is over,” declares Jonathan Miller. That perception no doubt has begun to trickle down to prospective buyers and sellers

Its a bit dramatic but its taken about 6 months for many in the real estate market to come to terms with this.


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