Low interest rates and high demand breathe life into the New York housing market
BY LAUREN PRICE
The housing market is showing signs of life again — and optimism is running high. Just ask Dottie Herman, president and CEO of the New York-based brokerage firm Prudential Douglas Elliman. She says those pesky predictions of New York area housing prices not yet bottoming out are yesterday’s news. “Buyers are beginning to believe that this is the best time to buy,” says Herman. “And unlike the rest of the country where housing markets died a slow death, ours was more of a ‘one-two-three’ punch. We were bruised,” she adds wryly, “but not broken.”
“We’ve seen considerably more sales activity in this winter season than we did last year,” notes Jacqueline Urgo, president of The Marketing Directors, Inc., a Manhattan-based marketing and sales/leasing company. “We made nearly 50 sales at new buildings in the area just in the month of January, which is about three times as many sales as we achieved in January 2009.”
Low interest rates, an improving economy and realistic pricing all played a part in what is looking like a real estate resurgence in the Tri-State area, says Urgo. Another important factor is the vicinity’s supply and demand: in other words, the need and desire to live here remains high.
“New York did not get hit like Florida or Los Angeles, where the housing market is still oversupplied. It will probably take them another decade to absorb surplus inventory,” says Herman. “Conversely, New York’s listing inventory actually declined by 25 percent versus last year at this time.”
Contributing to these favorable conditions in the post-bust buyer market: predictions that this year’s bonus season will rival those of boom years past.
“It will have an impact on residential sales, though we don’t know how much yet,” says Urgo. “That infusion of money will help push even more buyers off the sidelines who, depending on the size of their bonuses, will now have the necessary funds at hand for down payments, and in some cases, all-cash purchases.”
A Perfect Storm
In many respects, current market conditions represent a perfect storm. “Buyers and sellers are seeing eye to eye on pricing, interest rates are still at historic lows, and supply is decreasing significantly,” says Kelly Kennedy Mack, president of the brokerage firm Corcoran Sunshine Marketing Group in New York City. She reports that Manhattan’s new development inventory fell by 19 percent in the last quarter o1 2009 versus the previous quarter.
“Within our own portfolio, we’re doing 100 percent more deals than we were a year ago.” says Mack.
Those deals are not just with buyers from the region. According to the Chicago-based Luxury Portfolio Fine Property Collection, a global network of high-end, locally branded brokerages showcasing some 14,000 properties worldwide, international buyers are keen to exploit an advantageous market.
“Our website, LuxuryPortfolio.com, attracts over 1.2 million high-net-worth visitors annually and traffic from over 200 countries and territories every month” says Stephanie Pfeffer, Luxury Portfolio Fine Property Collection’s vice president, marketing. “And the increase in website traffic since late 2008 is significant.” When the site compared traffic from December 2008 to December 2009 in the New York Tri-State area, we saw a 66 percent increase. Additionally, 21 percent of the traffic to the Tri-State area
originates from overseas,” says Pfeffer.
Jonathan J. Miller co-founder of residential real estate appraisal firm Miller Samuel, has also observed an influx of international buyers “mostly from Europe, South Korea and South America, particularly from Argentina and Brazil,” he says. “These buyers are typically interested in new developments and are usually paying all cash, often negotiating discounts in return.”
Area real estate experts seem to agree that in today’s market some of the best values are likely to be found inside new developments. According to fourth-quarter industry reports, Manhattan’s median price paid for a residence in a new development is down 23 percent when compared to 2008’s median price. In Brooklyn, the drop was 7 percent; in Queens. 7.9 percent; and though New Jersey’s fourth quarter figures are not yet final, the drop is likely to be no less than 8 percent.
Some of the obvious allures of new developments are the pristine conditions, the prize-winning architecture and well laid out floor plans. But while better prices and low mortgage rates are pumping up the market, buildings tricked out in the latest amenities are also responsible for driving sales velocity. Take 535 West End Avenue. A new luxury condominium from the Extell Development Company, every home features bespoke kitchens designed by Britain’s Smallbone of Devizes that open into generously sized family rooms to foster casual gatherings among family and friends.
Five years ago, state-of-the art fitness centers with personal trainers, communal lounges with big screen TVsr fireplaces and catering kitchens were de rigueur with any new development. Later, concierge services and refrigerated lobby storage, outdoor kitchens, and private screening rooms were all the rage. Today, fully loaded amenity packages intended to attract discerning buyers bring forth the latest generation of extras, which can include world-class spas, residential libraries and yoga studios. And when it comes to in-home extras, washers and dryers, Sub-Zero refrigerators, built-in wine coolers and walk-in showers are now standard issue, as are wide-plank hardwood floors and home offices.
For the health and wellness set, Miraval Living offers 40,000 square feet of health and wellness beginning with the lobby-level half-acre garden with a yoga grove, a Quantum Leap challenge pole and a cafe for nutritious repasts. The spa has it all, including a Technogym Kinesis climbing wall, an indoor pool and a ball court. Developed by River Terrace Apartments, LLC, and marketed through Corcoran Sunshine, this high-rise selIs studios to three-bedrooms ranging from 611 to 2,214 square feet. Most units have outdoor space. There are several options for kitchen and master bathroom fixtures and finishes. From $724,000, occupancy is immediate.
Also developed by Extell and marketed by Corcoran Sunshine, Ariel East and Ariel West on the Upper West Side definitely stand out for their ”downtown coolness.” The buildings host La Palestra Wellness Center featuring a sky-lighted pool, billiards parlor, ball court and pet spa. Quite a few units offer views stretching from the Hudson River to Central Park. What’s left of the two- to four-bedroom residences range in size from 1,617 to 2,349 square feet and feature kitchens with custom glass-panel cabinetry, granite slab worktops and Viking appliances. Marble and glass-tiled master baths have walk-in showers and Kohler Tea for Two soaking tubs. From $2.275 million with a 10-year 421-a tax abatement, occupancy is immediate.
With family friendliness in mind, the twin-towered Rushmore on Riverside Boulevard from Extell not only offers apartments as large as 4,375 square feet, but also an exclusively designed Kidville NY playroom and a sky-lighted pool inside La Palestra fitness facilities. Remaining two to four-bedroom homes — marketed by Corcoran Sunshine — include kitchens stocked with Sub-Zero. Viking and Miele appliances along with a custom selection of cabinetry and worktops. Ready for moving in, prices start at $1.4 million with a 10-year 421-a tax abatement.
On the Waterfront
In the ongoing quest for a better bang for the buck, those who were once resolute Manhattanites are crossing the Hudson to the latest developments sprouting up along what’s leftof New Jersey’s Hudson River waterfront. As easy a commute from Hudson County to Midtown as it is from Wall Street, these buyers are in search of bigger living spaces at a lower cost per square foot than Manhattan.
The W Hoboken Hotel & Residences along the waterfront is now selling two- and three-bedroom condos with balconies. Located on the hotel’s top floors to maximize the million-dollar views of Manhattan, apartments range from 1,900 to over 2,300 square feet. Kitchens offer appliances from Sub-Zero, Viking, Bosch and Ther-mador and the master baths feature walk-in showers and soaking tubs. Homeowners enjoy all the hotel’s amenities, including W Hotels’ Whatever/ Wherever- concierge services, pet services from Woof-Meow-Woof, weekly in-home botanical services and Bliss Spa and Sweat Fitness. From the Marketing Directors and available for occupancy, what’s left is priced from $1.795 million.
Another “Gold Coast” development is the view-filled Crystal Point. Developed by Fisher Development Associates, Crystal Point’s remaining units range from 800-square foot one-bedrooms to 1,817-square foot three-bedrooms. Kitchens are outfitted with JennAir appliances and marbled master baths feature soaking tubs and walk-in showers.
There are plenty of communal amenities to enjoy, but one of the most pleasurable is the outdoor pool surrounded by cabanas and lounge chairs. Also from the Marketing Directors and priced from the low $500,000s, occupancy is immediate.
Also in Hudson County is Henley on Hudson, an elegant waterfront development currently under development by Lennar Urban and the Roseland Property Company and sold through the Marketing Directors. The Residences at Henley on Hudson is the latest phase. Offering a mix of one- to three-bedroom condos ranging from 881 to 3,100 square feet, prices are from $500,000 and occupancy is set for this summer. Ready-to-move-in townhouses are priced from $1.475 million with jaw-dropping views of Manhattan, fireplaces, elevators, outdoor space and two-car garages. Another breath of fresh air: a large, formal English-style garden.
Henley is but one of the many developments that have tapped into a consumer yen: bucolic space not limited to the indoor environment. A welcome addition to outdoor spaces like balconies and terraces, people want to feel a bit of earth underneath their feet. Thus, the rising trend in the creation of outdoor sanctuaries: gardens and grounds that make home — even one that is 20 stories high — a grassy escape from the concrete jungle.
One example is Palmer Hill in Stamford, Conn., set on 20 acres of park like grounds and protected conservation areas. This gated community is a joint venture between Buckingham Partners, Sun Homes and O’Connor Capital Partners, and is marketed by the Marketing Directors. The development is filled with apartments ranging from 1,200 to 1,800 square feet and townhomes ranging from 2,334 to 4,000 square feet. In-home hallmarks are working fireplaces and outdoor spaces. Kitchens are outfitted with Wolf and GE Monogram appliances and bathrooms are decked out in marble. On the list of top-tier residential amenities, the business center is a standout. Priced from $500,000, some homes are ready for occupancy — while others can be custom built.
Right in town, Manhattan House on East 66th Street is home to one of the city’s largest private residential gardens. A full acre, the garden’s modernistic sculptures, flowering trees and plants, and winding walking paths designed by award-winning landscape architect Sasaki Associates make it a peaceful retreat for the crowd-weary. For ideal indoor relaxation, there’s also the exclusive-to-residents Exhale Mind Body Spa. Marketed by Corcoran Sunshine, remaining one-to five-bedroom homes, some with outdoor space and wood-burning fireplaces, range from 560 to over 3,500 square feet. Fine finishes include wide-plank oak floors and kitchens with Viking Professional Series appliances. Developed by O’Connor Capital Partners and priced from $995,000, occupancy is immediate.
Georgica’s rooftop deck on East 85th Street was designed by award-winning landscape designer H.M. White. This unique outdoor entertainment and play space also features an outdoor flat screen TV, a summer kitchen and bar, a paneled maze and climbing surfaces. Developed by Ascend Group LLC and the Carlyle Group, the building offers a mix of one-bedrooms plus library, two-bedrooms, two-bedrooms plus library and three- and four-bedrooms, with square footage ranging from 1,298 to 2,712.
A select group of units offer working fireplaces and outdoor spaces, and all feature kitchens with Miele appliances and Marvel wine coolers. Marketed by Corcoran Sunshine and priced from $1,695 million with a 10-year 421-a tax abatement, occupancy is immediate.
While it’s impossible to time the real estate market with exactitude, many experts are saying the best time to make a move is upon us.
“Despite the tight lending climate, now is the time to buy,” advises Herman, “Prices are 15 to 20 percent lower than they were at the top of the market.” Herman points out an added incentive: Congress extended and expanded the home-buyer tax credit this past November.
Qualifying buyers now have until April 30, 2010 to take advantage of a tax credit of up to $8,000. First-time buyers are defined as not owning a primary residence in the U.S. in the three years prior to this purchase. If you’re a current homeowner, you are still eligible for a tax credit of up to $6,500 if you’ve lived in your primary residence for five consecutive years over the past eight years. Modified adjusted gross income limits have been raised to $225,000 if married and filing jointly and $125,000 for individual filers.
If recent numbers are any indication, both buyers and sellers can hope for an increasingly active and acquisitive market. The National Association of Realtors, a trade group, recently reported its index of people with contracts to buy homes (based on signed contracts for existing single-family homes, condos and co-ops) rose one percent in December, marking the ninth increase in the past 10 months, driven in part by the homebuyer tax credit.