Trump Presidency Unlikely to Thwart Foreign Investment in U.S. Real Estate

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1) “U.S. residential properties, as an asset class, have been favored among the world’s richest, thanks to the country’s relatively healthy economic fundamentals and business environment. The outcome of the presidential election will “hardly at all” have an impact on the luxury real estate market”, said Liam Baily, head of residential research at Knight Frank, a London-based global real estate consultancy.

2) “The shock of the result will be replaced by a more nuanced appraisal of the strengths of the U.S. markets-there is so much demand for the U.S. luxury market domestically and internationally, mainly due to the significant outperformance of the U.S. economy compared to just about every other developed world economy,” Mr. Baily told Mansion Global.

3) International homebuyers acquired 214,885 properties-worth $102.6 billion-in the U.S. from April, 2015-March 2016, according to the National Association of Realtors. In terms of dollars spent, China was the main source of foreign activity for the second year in a row, followed by Canada, India, the U.K. and Mexico.

4) The main factors that influence foreign investment particularly in NYC are the strength of the stock market, the supply and demand dynamic and safety. If New York is seen as a safe and stable place to hold real estate assets, the city will remain attractive to foreign investment.

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Manhattan Home Prices Fall as Sellers Surrender to Slowdown

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1) The median price of previously owned condominiums and co-ops fell 6.3% in the 4Q2016 from a year earlier to $900,000. It was the first annual decline since the beginning of 2015 and the biggest since 3Q2012, when resale prices dropped 8.1% (Source: Miller Samuel and Douglas Elliman).

2) Buyers agreed to pay more than the asking price in just 13% of all sales that closed in the quarter, down from 29% a year earlier (Source: Miller Samuel and Douglas Elliman).

3) Previously owned properties that sold in the period spent an average of 80 days on the market, up from 71 days a year earlier. In the 4Q2016, the average discount off the last asking price was 4.7%, compared to 3.1% a year earlier (Source: Miller Samuel and Douglas Elliman).

4) Sellers are becoming more pragmatic and willing to negotiate, they are adapting to changing market conditions and realize that they have to price correctly if they want to sell and close a deal.

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New York Luxury Apartment Market Loses Some Luster in 2016

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1) In 2016, the number of sales contracts signed for more than $4 million declined by 22% (Source: Olshan Realty).

2) More than 2,300 apartment deals closed in new developments in 2016, the most in six years. The median price was $2.55 million, up 42% from new building/development closings in 2015.

3) Of the top 10 sales of 2016, five were at 432 Park Avenue and eight of 10 were in new developments.

4) Brokers and analysts attribute the slowdown in 2016 to uncertainty over the presidential election, buyer resistance to high asking prices, dips in the stock market earlier in the year and global economic uncertainty.

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6 Things You Need to Know About 2016’s Manhattan Residential Market

1) Average condo prices hit a record of $3.1 million or $1,886/sf, but this reflects closings of a disproportionate number of new development super luxury apartments that went into contract in 2014 and 2013 (pre-construction) at the height of the latest 5-year real estate cycle.

2) Average condo prices are likely to decline in 2017; the target offering price of new condominiums approved for sale in NYC is down 34.4% year-over-year. Developers are now focusing on smaller units (one to three bedrooms) and lower price points ($1 million-$4 million).

3) 2016’s average apartment price (condos and co-ops) of $2.2 million is a 91% increase from 2006. The median price of $1.2 million is 62% higher than it was 10 years ago.

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Manhattan Luxury Co-ops Fall out of Favor

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1) Contracts for luxury co-ops priced at $4 million and up fell 25% in 2016 vs. the prior year.

2) Pre-war Fifth Avenue and Park Avenue co-ops are facing stiff competition from the arrival of luxury new development condo buildings with the latest in design and technology along with extensive amenities, many located in emerging Downtown neighborhoods. Prospective buyers view co-ops as too restrictive and don’t want to deal with intrusive boards for approval.

3) Among all apartment contracts signed this year for $4 million or more in Manhattan, 76% or 751 deals were for condos (Source: Olshan Realty).

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Brooklyn Home Sales Soar as Buyers Flee Manhattan Price Hype

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1) The affordability issue continues to drive buyers to both Brooklyn and Queens from the Manhattan market.

2) Purchases in Brooklyn rose 22% from 2015 to 2,582 while the median sales price climbed 15% to a record $750,000. The number of homes for sale at the end of December dropped 31% to 2,232, the fewest since 2008 (Source: Miller Samuel and Douglas Elliman).

3) The market dynamic in Brooklyn is moving in the opposite direction of Manhattan with a reduction in supply and rising prices.

4) In Brooklyn, prices climbed across all property types. The median price for condos, including new developments, jumped 23% to $895,000, while co-ops sold for a median of $385,000, up 6.9%. The median price of one-to-three family homes increased 9.3% to $830,000 (Source: Miller Samuel and Douglas Elliman).

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Luxury-Condo Market is Starting to Rebound in Downtown Manhattan

1) Sales during the 4Q2016 at high profile new development luxury buildings, including 30 Park Place, 56 Leonard St., Greenwich Lane, and 70 Vestry St., demonstrate the growing popularity and demand for luxury residential condos in Lower Manhattan. With prices ranging on average at about $3,500-$4,500/sf, these developments are a value play compared to similar luxury product along Billionaire’s Row in Midtown, where asking prices average about $5,500-6,000/sf.

2) During this past November, Silverstein Properties, Inc., the developer for 30 Park Place, signed contracts for five new condos priced between $20 million and $26 million. In all of 2016, 11 other condos closed for more than $20 million below 34th Street in Manhattan.

3) Lower Manhattan has evolved into a 24/7 neighborhood with the arrival of new celebrity chef restaurants as well as premium luxury retail at both Westfield World Trade Center and Brookfield Place. Convenient transportation options via most major subway lines at the Fulton Center allow for easy access to all areas of Manhattan.

4) The latest wave of buying activity also reflects a strong local economy and view that Manhattan remains a safe haven for long term real estate investment given ongoing global turmoil.

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Tribeca Jumps the $4M Mark, Still Reigns Over the Priciest NYC Neighborhoods

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1) With a median sales price well over the $4 million mark, Tribeca keeps its title as New York’s most expensive place to live-recording a 19% year-over-year increase in prices with a total of 436 transactions.

2) Other neighborhoods with the highest median sales price in 2016 in the top 10 include Soho, Little Italy, Hudson Square, DUMBO, Flatiron, Greenwich Village, Garment District, Theater District-Times Square and Forest Hills Gardens.

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Uber Boosts Property Sales in NYC’s Far-Flung, Subway-Less Spots

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1) Whether purchasing or renting an apartment, many New Yorkers are now taking up residence in neighborhoods distant from a nearby subway due to the convenience and low cost of rider apps such as Uber, Via, and Lyft.

2) The lower cost/value alternative associated with apartments in less central neighborhoods is becoming more appealing because of the prevalence and use of rider apps; brokers and developers have taken notice.

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The Soul Cycle Effect: Proximity to Fitness is the New Necessity

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1) In our fitness obsessed culture, buyers and renters are placing greater emphasis on access to their favorite boutique fitness class/gym when making a decision on an apartment.

2) In designing a building gym, a developer needs to be aware of fitness amenities in the immediate neighborhood.

3) Related Properties is known for their affiliation with both Equinox and Soul Cycle. The Easton, a new luxury rental property on the Upper East Side in Yorkville, houses a state of the art 50,000 square foot Equinox Gym at the base of the building, offering easy access to residents.

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