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Posts Tagged ‘Lehman’

[Three Cents Worth DC #208] Keep Your Eye On The Numbers (For The Past Decade)

September 13, 2012 | 12:24 pm | | Articles |

It’s time to share my Three Cents Worth (3CW) on Curbed DC, at the intersection of neighborhood and real estate in the nation’s capitol. And I’m simply here to take measurements.

Read this week’s 3CW column on @CurbedDC:

…I thought it would be visually helpful to show the ebb of and flow of the DC Metro area’s housing market. And since I just learned how to rotate a GIF image, I’m making up for all the art classes I never took in high school (band). I trended a decade’s worth of the robust web data from the regional MLS (RBI, a division of MRIS)—monthly new pending home sales and median sales price in a two year moving window. I also inserted some commentary on the milestones during the decade (i.e. highest points for price and sales, lowest points for price and sales, Lehman/credit crunch, tax credit, etc). Hopefully it’s not too distracting…

 

[click to read column]


Curbed NY : Three Cents Worth Archive
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[Three Cents Worth NY #203] The Up in Manhattan Uptown Sales

August 29, 2012 | 4:38 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 simply here to take measurements.

Read this week’s 3CW column on @CurbedNY:

…After last week’s semi-heady four-bedroom/studio ratio thing, I thought I’d go a bit lighter as summer is nearly over and we all need a break. Admittedly it’s been bedlam in appraiserville this month (translation: we’re seeing a lot of sales activity for August—more on that soon). With all the talk about the high end market, there hasn’t been much discussion about Northern Manhattan (aka Uptown) lately so I thought I’d drill down a bit. I broke out Manhattan sales over the past four years (just before the Lehman tipping point) into the four regions: Downtown [blue line], East Side [red line], West Side [green line] and Uptown [pink line] by their year-over-year percent change…

 

[click to read column]


Curbed NY : Three Cents Worth Archive
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Curbed Miami : Three Cents Worth Archive

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Bloomberg Manhattan Luxury Housing Market Charts 2Q-2012

August 9, 2012 | 12:02 am | | Charts |

A few years ago Bloomberg set indices for the Manhattan Luxury Housing market based on our data seen by their terminal subscribers. Kind of cool.

These charts show the reset when the credit crunch began circa 2007-2009. On a ppsf basis (top chart), the luxury market seems to have begun climbing again at the same trajectory that was seen pre-Lehman bankruptcy.

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Change is Constant: 100 Years of New York Real Estate

February 7, 2012 | 11:28 am | | Articles |


[click to expand]

Last fall Prudential Douglas Elliman turned 100 years old and they asked me to write an article for their Elliman magazine. If you’ve been living in a cave, I’ve been writing their housing market report series since 1994.

What started as a simple project morphed into a fun, albeit gigantic, research project. I learned a lot about the evolution of the Manhattan housing market, largely through the amazing incredible New York Times archives. This was right about the time of my website revision and semi-necessary hiatus so I am cleaning out my desk of posts I have been itching to write so please indulge me.

The article I wrote for Douglas Elliman was beautifully presented by their marketing department and prominently inserted in their Elliman magazine (and iPad app!).

Diane Cardwell of the New York Times in her “The Appraisal” (an incredible column name BTW) penned a great piece: In an Earlier Time of Boom and Bust, Rentals Also Gained Favor that originated from my article and zeroed in on the 1920s and 1930s to draw a comparison to the current market.

I have the feeling my project is going to morph into something bigger – it’s just too interesting (to me). A few things I learned about the Manhattan market over this period:

  • Douglas Elliman published the first market study in 1927 [heh, heh] not counting other marketing materials written before WWI)
  • Real estate media coverage in the first half of the century was social scene fodder (same as today) but with extensive and excessive personal details presented on tenants, buyers and sellers yet housing prices and rents were rarely presented in public.
  • Manhattan made a rapid transition from single-family to luxury apartment rentals and eventually co-ops.
  • Housing prices and rents by mid-century weren’t that much different than at the beginning of the century.
  • Manhattan’s population peaked at 2.3M around WWI.
  • Wall Street in the 1920s was seen as the driver of the real estate market.
  • Federal and state credit fixes in the late 1930’s help bail out the housing market.



• Change Is The Constant In A Century of New York City Real Estate – pdf [Miller Samuel]
• My Theory of Negative Milestones [Matrix]

Read More

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[Bigger Than A Phone Book] Manhattan Decade 2002-2011 Report (Co-ops+Condos)

February 7, 2012 | 11:19 am | | Reports |

We released our report on the Manhattan co-op/condo market for 2002-2011 this morning. This report is 60 pages of data bliss as far as I’m concerned. More than 100,000 sales collected, cleaned, sliced, whipped chopped and pureed.

Absolutely love the cover photo the graphics people selected.

I’ve been authoring this market report series for Douglas Elliman since 1994.

Co-ops and condos consistently account for roughly 98% of Manhattan residential sales. Manhattan is primarily a rental market and single family sales are a very specific high end niche market.

Here’s an excerpt from the report:

The number of sales remained above the 10,000 sale threshold for the second consecutive year and for the fourth time in the decade. There were 10,161 sales in 2011, the third highest total of the decade. The total was 1% above the prior year total of 10,060, but 24.3% below the 2007 housing boom peak of 13,430. The weakest period of sales activity for the decade was in 2009, the year after the “Lehman tipping point” in late 2008, when the credit crunch and low consumer confidence stifled sales activity. The second weakest period surprisingly occurred in 2005, after affordability fell sharply with the highest pace of price appreciation in the decade. The last two years of the decade saw the most sales of 3-bedroom and 4-bedroom apartments as the market benefited from unstable global economic conditions. Foreign buyers and the wealthy continued to seek financial refuge in the high-end Manhattan housing market.

The custom data tables are updated and ready for you to play with. The chart section on the new site remains a work in progress.



The Elliman Report: Manhattan Decade 2002-2011 (Co-ops+Condos) [Prudential Douglas Elliman]

The Elliman Report: Manhattan Decade 2002-2011 (Co-ops+Condos [Miller Samuel]

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[Eye on Real Estate] WOR NewsTalk Radio 710 June 12, 2010

June 14, 2010 | 10:40 am | | Public |

For each week’s Eye on Real Estate Show on WOR NewsTalk Radio 710, we include a segment called “The BlogCast” where I discuss several housing related (sometimes a stretch) posts from some of my favorite blogs. They cover topics that are current, funny or simply a “must read”.

Saturday’s BlogCast covered the following blog posts:

[City Room/NYT] Life Costs More Here, Unless You’re Hiring In both Boston and the San Francisco Bay area, the average worker receives more in wages and benefits than does the typical worker in the New York metropolitan area, according to figures released this week by the federal Bureau of Labor Statistics. Boston and San Francisco are also the only big American cities where the cost of providing health care, year-end bonuses and other benefits is higher than it is in New York, the numbers show…

[Naked Capitalism] RealtyTrac: Most foreclosures have positive equity Of all of the foreclosures in the RealtyTrac online database, less than 50% have mortgages worth less than what is owed, said Rick Sharga, senior vice president at RealtyTrac, during a session at REO Expo, which concludes in Dallas Wednesday…

[Sienna Research Institute] 4.7% of New Yorkers Want To Buy, Most Since Lehman Tipping Point Ok, so this isn’t really a blog, but it pertains to the listening area and I covered it here on Matrix. 4.7% of consumers in the state plan to buy a home this year, compared with just 3.4% in April and 3% in May 2009. As good as it is, the latest reading is still far shy of the three-year high set in June 2007, when 5.6% of New Yorkers said they wanted to buy. Conversely, in January 2009, at the lowest ebb in the last three years, a mere 2.2% said they would buy a home.


If you missed this past Saturday’s show or any prior show, you can listen to the podcast at any time or subscribe to it for free via iTunes to always get the latest show delivered automatically to your computer or handheld device. My Blogcast is usually in the first hour of the show.

Listen to the most recent Eye on Real Estate podcast.

Subscribe to the free weekly Eye on Real Estate podcast.

Become a fan on Facebook.

Or visit the Eye on Real Estate Website.


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[Sienna Research] 4.7% of New Yorkers Want To Buy, Most Since Lehman Tipping Point

June 11, 2010 | 3:15 pm | |


[click to open survey]

The Sienna Research Institute conducts a monthly New Yorker Consumer Poll every month. This month showed that more New Yorkers planned to purchase homes than immediately following the credit crunch in the fall of 2008:

4.7% of consumers in the state plan to buy a home this year, compared with just 3.4% in April and 3% in May 2009. As good as it is, the latest reading is still far shy of the three-year high set in June 2007, when 5.6% of New Yorkers said they wanted to buy. Conversely, in January 2009, at the lowest ebb in the last three years, a mere 2.2% said they would buy a home.

In fact the improvement in consumer attitudes toward housing are far more optimistic than overall confidence compared to 3 years ago.

New York consumer buying plans for homes are down 0.6% from the same period in 2007 while the New York Consumer Confidence Index is down 15.1% over the same period.

Apparently New Yorkers are more confident about their housing future than their overall lives.


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[NYT] Developers Need Blind Optimism

May 26, 2010 | 10:28 am | |

[click to expand]

I don’t think I am cut out to be a developer.

While I get the hard work and analysis part, I’m missing the blind optimism part.

And no, I’m not blindly pessimistic either – during the boom years blog commenters periodically accused me of being a shill for the real estate industrial complex (I liked the phrase so much I bought the domain).

Blind optimism is what makes developers successful because everyone tells them they can’t do it. But it is also their downfall because builders build until they can’t build anymore.

Today’s New York Times article by Charles Bagli “Building a Tower of Luxury Apartments in Midtown as Brokers Cross Their Fingers” which announces Barnett’s 1,005 foot condo with a hotel at the base. The site is due south of the Essex House between West 57th Street, a retail corridor and West 58th Street, a service road for Central Park South (West 59th). I’ve got a “let’s consider reality” quote and graphic in the piece.

The project is the first major construction start in New York since the fall of Lehman Brothers in September 2008, and it is an ambitious, even risky undertaking. Unemployment still hovers at 10 percent in the city, which has only just begun to gain back some of the 150,000 jobs lost during the recession. Not so long ago, the real estate industry was right behind Wall Street and the nation’s automakers in crying for a federal bailout.

Access to financing determines when and how something gets built – in this case it was Abu Dhabi since US banks are not interested new luxury condo development given the excess inventory that needs to be absorbed first.

Barnett said “We think it’ll be the nicest project ever built in New York.” Given the proximity and the success of nearby 15 Central Park West – my vote for the best Manhattan condo ever built, I’m guessing that’s the comparison being made. Although recent sales there have topped $6,000 per square foot, the building fronts Central Park and straddles Midtown and the Upper West Side, I’m not so sure its a reasonable comparison to make but I do wish them well.

Remember I’m not cut out to be a developer.

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[Three Cents Worth #148] Manhattan Absorption Tall Tales

May 14, 2010 | 10:11 pm | | Charts |

It’s time to share my Three Cents Worth on Curbed, at the intersection of neighborhood and real estate.

Three Cents Worth: Manhattan Absorption Tall Tales

This week I looked at absorption of Manhattan apartments, considering all possible units as available to be sold (i.e., including shadow inventory). I looked at the period 4Q 08 to 1Q 2010 because I wanted to show conditions in the post-Lehman Manhattan housing market. I defined absorption as the number of months it would take to sell existing supply (including shadow inventory for new development) at the current pace of sales….


[Click to expand and read full post on Curbed]

Check out previous Three Cents Worth posts.


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[Vortex] DUMBO: A Tale of Two Views

April 23, 2010 | 10:46 am | |

Guest Columnist:
Anonymous DUMBO Resident

Periodically I receive insight from people that have spent a lot of time analyzing specific market trends or attributes. In this case, here’s a fascinating analysis about the views in DUMBO by one of its residents. – Jonathan Miller


A Tale of Two Views
April 2010
Anonymous

Introduction
DUMBO. Down Under The Manhattan Bridge Overpass – arguably one of the most hyped neighborhoods of the aughts. I thought I would take a stab at analyzing some of the real estate in the area. It’s always interesting when market reports and news stories quote a price per square foot or median price for an entire neighborhood. I believe that these numbers are not very useful because even within a neighborhood as small as DUMBO, there are still micro markets that exist based on apartment features. Though DUMBO is a cultural and business center, is safe, family friendly, and has access to shops/restaurants/parks/transportation, the main attraction to real estate in the area is for the world class views. There are really two markets cohabitating in the DUBMO market – one for apartments with “wow factor” views, and one for apartments that do not contain them. The existence of two separate markets will be empirically proved and explored in this paper.

The goals for this analysis are 4 fold:
1) Visually display the existence of the two separate markets in DUMBO
2) Quantify $/PSF value for apartments with “wow factor” views vs those that don’t
3) Assess the effectiveness of an actual DUMBO appraisal
4) Discuss the pricing of apartments currently on the market

Data and Definitions
The area is actually incredibly small with only a few buildings and I chose to look at the two flagships – 1 Main Street (The Clocktower) and 30 Main Street (The Sweeney Building). Both buildings are well established door men condos with views. Other buildings in the area do have views – but I chose not to look at others such as 100 Jay and 85 Adams are new construction, and 70 Washington runs the risk of views being obstructed by the Dock Street development. From 2003-present there were 195 sales in these 2 buildings representing approximately 240 million dollars in value, a large enough sample size for this analysis. The penthouse sale at 1 Main, Cabanas at 30 Main, and one outlier at 30 Main (apt 7G on 9/14/9) were excluded from the analysis

The views I define as “wow factor” contain large windows that have full unobstructed views of the East River + Manhattan Bridge or East River + Brooklyn Bridge + Downtown Manhattan. More specifically these are: 1 Main – Any B, C, D line apartment or an A, J, K, L apartment above floor 4. 30 Main – G, H, A, B apartments above floor 5

All sale price information was taken from ACRIS and square footage sizes were taken from the condo offering plans. It’s important to note that the sale dates represent CLOSING dates – meaning that there can be some noise in the data depending on how long each apartment was in contract. 40 of the sales contain contract date data available from StreetEasy, where the average days between contract and close at 73 days.

Visual Display
The blue line in the graph below represents the average value price per square foot paid quarter by quarter for apartments that have spectacular views. The red line represents the PSF sale price those that do not. Along the X axis is time and the Y axis is dollars paid per square foot ($/PSF).

You can see that over time there is a clear gap between the blue line and the red line (Aside from Q3 2004). This gap represents the higher value of apartments with spectacular views. Furthermore, since 2005 the red line remains fairly constant with a band around 700-800 $/PSF, while the blue line spikes and dips with the market.
It’s important to highlight again that the closing price data comes from ACRIS, which means that the dates are closing dates – NOT the dates each contract was signed.

More recent data – zoom on the chart from 2005-Present

Quantification
Here is the same data in table format. You can clearly see the # of sales, total dollar value of sales per quarter, and weighted $/PSF for each quarter. It’s also interesting to note that though there were 42 more sales of non spectacular view apartments the total $ value is only 6mm more. The final takeaway from the chart is that that the average weighted $PSF difference for the entire timeline is ~$268 PSF.

To extrapolate the $268 PSF into more real terms – we are saying that having two apartments of the same size, one with a view would cost $1,000,000 while one without would cost $732,000. The calculation methodology for PSF calculations were weighted by total square foot. For example, if a 3000 sq ft apartment sold for 1000 psf and a 1000 sq ft apartment sold for 2000 a foot, the avg for that quarter would be 1250. 4000 total sq ft sold – 3000/4000 = .75, 1000/4000 = .25, (.75 * 1000) + (.25 * 2000) = 1250.

Assuming a 20% down payment and 5.5% 30 year fixed mortgage the payments would also work out as follows:

View: $200,000 down, $800,000 mortgage, monthly payment of $4,542 No View: $146,400 down, $585,600 mortgage, monthly payment of $3,325

So we have a difference in monthly payment of $1,217 per million dollars of apartment value, and an annual amount of $14,604 per year.

So when you see a graphic like below that suggests the median price in DUMBO is $1.24 million, you know that value per square foot within that median price is drastically different depending on if the apartment has a spectacular view vs. not.


(Source: The Real Deal)

Appraisal
I got my hands on an actual appraisal for a unit that has a “wow factor” view – and looked at the comps. The first thought is to look at the comps themselves. Understandably, it is very difficult to find true comps considering real estate is such an illiquid asset, but I have highlighted in red the major issue as to why each particular comp loses validity – lets work from the bottom up. If you are buying at 1 Main or 30 Main, you are most likely not considering 360 Furman Street (1 Brooklyn Bridge Park). This is like comparing the Upper West Side and Hells Kitchen – though close in distance, they are just totally different neighborhoods that appeal to different clientele. The Next 3 – 30 Main/7C, 1 Main/5E, and 1 Main/2K – don’t have spectacular views. As we showed in the above chart, there is a significant difference in value when the view is not present and should not be compared. Lastly, though 1 Main/12K could be considered a comparable – I don’t see how it makes sense to compare a sale in 2010 to one that was signed before the Lehman collapse.

Appraisers take these differences into account and thus make adjustments to true up the values of the apartments. In this case, adjustments were made for date of sale, maintenance costs, floor, view, age of building, bathroom count, size in square feet, outdoor space, common roof deck, and garage. Here is a snippet of those adjustments:

If you refer back to my chart above you can see the total appraised PSF of each apartment as well ad the contribution to Total PSF for each adjustment. I’ve left the sign (+/-) off the view/floor and time adjustments, but you can assume that they are positive for the apartments that do not have “wow factor” views. You can see that the View/Floor and Time adjustments are no where near where they need to be compared to the empirical finding

In summary, this appraisal does not take into accounts the severity of difference in price that comes from the nuances of view or timing accurately. More proof that appraisers need in depth local knowledge of the properties they are assessing in order to be able to compare apples to apples.

Current Listings
There are currently 11 units for sale between 1 Main and 30 Main, more important than location, there are 4 with spectacular views and 7 without. The chart below shows those listings and is sorted by price per square foot – looks like the sellers are aware of the bifurcated market as well.

Below is the post Lehman/Financial collapse price per square foot for the area.

You can see that the average for the last 5 quarters comes out to approximately 1118 $/PSF for apartments with views and 766 $/PSF for apartments that lack. We also see that the there is a significant upward trend in the spectacular view apartments where 3 units sold in Q1 of 2010 at a size weighted average of 1224 $/PSF.

Per our earlier analysis with the appraisal – there are nuances to the way these apartments are priced. 1 Main/5D is priced at 1695 $/PSF due to extensive renovations. 1 Main/6GH is commanding a premium due to its size (3bed) as well as renovations.

View Apartments: Considering the current listings are either below 1118 $/PSF or very close to the latest quarter’s $/PSF (1224), the data suggests that all apartments with views aside from 5D are accurately priced.

Non View: We also see that all apartments that lack spectacular views aside from 30 Main/4F are overpriced as they are over the 766 $/PSF recent average and the data does not suggest any upward trend at the moment.

Conclusion
It’s important to disclose that this analysis is measuring the value of space within the DUMBO area, and assumes that buyers are solely looking at apartments within this area. It highlights how even within two buildings there are many nuances and generalizing apartments across neighborhoods is a very difficult and complex task.

Through analyzing historic closing sale information it is clearly visible that there are two separate markets in existence in DUMBO. Refining the data suggests that the price differential between the two markets is ~268 $/PSF. Even within the same building there are significant factors that create a drastic difference in value, and breaking down into monthly mortgage payments the price differential for apartments with views vs those that don’t works about to ~$14,600 annually for a $1 million apartment.

This analysis has also shown that appraising a property is an extremely difficult task that requires an immense amount of local knowledge and building/apartment features.

Lastly, the current listings in the markets for apartments with views are priced in line with historic $/PSF as well as recent trends. 30 Main/9A happens to be the writer’s personal favorite and the one I would bet sells next. The data suggests that apartments that do not have spectacular views appear to be overpriced.

DUMBO: A Tale of Two Views [Anonymous via Miller Samuel]


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[More of the Same] 1Q 2010 Manhattan Market Overview Available For Download

April 2, 2010 | 2:16 pm | | Reports |

The 1Q 2010 Manhattan Market Overview , part of a report series that we have authored for Prudential Douglas Elliman since 1994, was released today. We had problems with our web site host all morning and couldnt get the reports loaded until early afternoon.

Other reports we prepare can be found here.

The 1Q 2010 data(coming later today) and a series of charts (acoming later today).

Press coverage can be found here once we get around to uploading it. In the meantime….

An excerpt

……There were approximately twice the number of sales in the first quarter of 2010 as the same period a year ago, however, this is the first quarter-over-quarter decline in the past year. The number of sales jumped 99.5% to 2,384 sales in the first quarter from 1,195 sales in the same period a year ago, but declined 3.6% from 2,473 sales in the prior quarter. The number of sales over the last three quarters has been consistent with the 2,301 quarterly average number of sales over the last decade. The first quarter of 2009 saw the lowest level of sales activity over the prior 15 years and was reflective of the nearly “frozen” market conditions after the Lehman Brothers bankruptcy in the autumn of 2008 and the onset of the credit crunch. The rise in the number of sales over the past year reflected a release of “pent-up” demand resulting in a decline in the number of apartments available for sale. Low mortgage rates, a surging stock market, tax credits, and a new affordability from a sharp decline in property values stimulated demand. There were 8,027 listings at the end of the first quarter, 23.1% below the 10,445 listings in the same period last year, but 17.2% higher than the prior quarter total of 6,851. This excludes, however, an estimated 6,500 units of new development “shadow inventory”. Although inventory is at its second highest level of the past decade, total inventory remains slightly above the ten year average of 7,117 listings…

Download 1Q 2010 Manhattan Market Overview

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[Sideways] 4Q 2009 Manhattan Market Overview Available For Download

January 5, 2010 | 11:51 am | | Reports |

The 4Q 2009 Manhattan Market Overview , part of a report series that we have authored for Prudential Douglas Elliman since 1994, was released today.

Other reports we prepare can be found here.

The 4Q 2009 data(coming later today) and a series of charts (available now).

Press coverage can be found here once we get around to uploading it. In the meantime….

An excerpt

……There were 2,473 sales in the current quarter, up 8.4% from the 2,282 sales in the prior year quarter and up 10.9% from the prior quarter. This level of activity was more than twice the 1,195 sales seen in the first quarter of 2009, which had been lowest level of sales in nearly 15 years. The return to more normal historical levels of sales activity was also reflected in the decline in inventory levels. There were 6,851 active listings at the end of the quarter, a 24.6% decline from 9,081 listings in the same period a year ago, but down 18.3% from 8,389 listings in the prior quarter….The second half of the 2009 Manhattan housing market reflected a new era, marked by the milestone Lehman Brothers Bankruptcy tipping point of September 15, 2008. Buyers, sellers and real estate professionals have slowly adopted to changes including stringent, if not irrational mortgage underwriting, elevated unemployment and layoffs, lower compensation, a sharp price correction, shadow inventory, first time home buyers tax credit, rising foreclosures, declining appraisal quality, expanding marketing times and a host of other challenges. While the increased level of sales in the second half of 2009 was encouraging, a true housing recovery will be marked by a meaningful decline in unemployment and greater consumer access to credit…….

Download 4Q 2009 Manhattan Market Overview

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