LuxuryBlurb

FUZZY MATHEMATICS AND REAL ESTATE

April 18th, 2014

fuzzymathPosted by Leonard Steinberg on April 17th, 2014

In this morning’s POST an article addresses the concerns of activist Reverend Dennis Dillon that Mayor De Blasio’s administration is not as diverse as the City and doesn’t reflect its composition: African-Americans account for about 23% of New York City’s population, and make up 26% of the administration’s appointees to date, yet Reverend Dillon admitted to The Post that his group’s estimate that New York City was 34% African-American (a 30% difference!)was based on its own polling, not on official Census data. Is this another perfect example of selective mathematics, something we see daily in New York Real Estate? Or is this blatant distortion of the truth? How is it possible that when people distort the truth so drastically they seem to get away with it? Of all things in the world, Mayor De Blasio cannot be accused of not being diverse!

In real estate I am confronted daily with grossly inaccurate data. It is gross. It’s worse because much of the data has been PURPOSEFULLY distorted because of an agenda. I am told of figures daily that are simply inaccurate. Often times they are assumptions or hearsay. Most times they are just distortions and manipulative. I see and hear much (in writing) about achievements and sales figures that are completely false, yet those who should be addressing this illegal activity remain silent. If you don’t believe me, take a look at five different quarterly market real estate reports: they all claim their data to be based on the same criteria…..closed, recorded sales…..yet each report has very different figures. Is this accidental? Is this purposeful? Is it inefficiency? Or is it the combination of all three, thus making it corrupt?

Certain things in life are hard fact, whether we like those facts or not. Manipulating the truth these days is easy: make a statement in the press, the web, Twitter, TV or Instagram and repeat the message often enough, and it becomes ‘fact’. Does no-one seems to have the time or resources to fact-check anymore? It seems no-one speaks out when people lie……there I said it…..it’s called LYING, just in case anyone forgot the meaning of that word or has conveniently re-defined the concept. Its time for the real estate industry to bring data to the table that is driven by fact.

 

 

IS THE CO-OP BACK?

April 17th, 2014

robby-pic-finalPosted by Leonard Steinberg on April 17th, 2014

With the recent $70 million sale of the 960 Fifth Avenue Bronfman penthouse and the $ 42million Central Park West Jon Stryker sale (by Robby Browne)that just closed, we may conclude that rumors of the CO-OP’s demise have been grossly exaggerated!

The Central Park West sale is about $ 7,500/sf, certainly Condo-territory pricing on anyone’s standards. It was certainly one of the most exquisite renovations ever (Lee Mindell at his best!), and the views and location were outstanding. But these two sales are a reminder that there still are many buyers who qualify for and don’t mind buying in a co-op even though some Boards are a bit nuts. The reality is a new generation of owners have been moving into these co-op buildings and have re-visited some of the more outlandish building policies to be more competitive with condominiums which have until recently sold for a huge premium.

Wait for next week when we announce another record breaking co-op deal that will open the eyes of all…..

IS SELLER PRICING AMBITION OUT-PACING BUYER TOLERANCE?

April 16th, 2014

Posted be Leonard Steinberg on April 16th, 2014

The Wall Street Journal reports this morning that the expected SPRING RUSH has not happened quite as planned throughout the US Housing market, although the Manhattan market has been rather strong, and one reason may be that asking prices have been escalating to the point where they are experiencing buyer resistance.

Any market is a direct product of supply and demand, and with supply very low until recently, the demand has far outstripped the supply causing mammoth price escalation throughout the USA over the past 24 months, especially on the very high end where construction of A-grade product had been dormant through the Great Recession. Last years sales were fueled by a large volume of ‘distressed bargain buys’……those are largely gone today. Real estate is very local, and much of the recent slowdown has been concentrated in markets through the West and Southwest that had been leading the recovery. The Northeast is actually faring very well.

At a recent event at a super-fancy Midtown high-rise, I heard broker chatter about how their buyers simply do not see the value of paying ultra-top-dollar when from the window of their potential purchase are 7 other construction sites that will deliver well over 700 units at a similar pricing level. With $45 billion+ of construction in planning or under construction in the New York area, has the time arrived for Sellers to factor in a new phase of this market?

There are certain prime locations and buildings that will not be as affected by growing supply, but clear evidence is on our doorstep that the theory of increased inventory applying pressure on excessive pricing aspirations is indeed true.

New Townhouse Listing! 376 President Street – Carroll Gardens, Brooklyn

April 15th, 2014

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20-ft wide charming townhouse thats part of a condomium. This magnificently gut renovated historic townhouse is conveniently located on a super-charming street in Carroll Gardens.With over 1,400sf interior square feet this gem offers a private landscaped garden. There is also a deck off the master suite. This gracious home has been meticulously renovated to the highest standards:The (real)chef’s kitchen contains an extra-wide Blue Star oven, the only genuine restaurant range fitted for the home, that opens with French doors. A Sub Zero refrigerator contains 2 freezer doors. Other outstanding features are Crimson vine polished stone counters with matching backsplashes, Miele dishwasher, Wolf  Convention microwave oven, Wolf warming drawer and a Wolf 5 burner cook
top.Pre-war details abound with double height ceilings and gorgeous beams. A master bedroom suite with den and custom built walk in closets is located on the upper level. The master bath is fitted with Lefroy Brooks fixtures, heated floors, and a walk in shower with custom doors. A washer with steam dryer are on the main level. All systems throughout this home have been totally upgraded including the electric, plumbing, HVAC, security plus video intercom system.
Potential for a third bedrooom.This is a rare opportunity to live in a townhouse with direct street access while enjoying the amenities of the Mill Condominiums and just a few minutes away from the new Whole Foods, a neighborhood game-changer.

Listing: www.elliman.com/1782828

THE SOLUTION FOR AFFORDABLE HOUSING? BUILD LOTS!

April 15th, 2014

affordable-housing-crisisPosted by Leonard Steinberg on April 15th, 2014

The answer to New York’s affordable housing problem may ultimately be solved by building LOTS: If you need any evidence of this, think back to the 2007/2008 recession where masses of housing stock sat idle…..and resulted in prices dropping, often dramatically. Or look today towards China….

In big international Chinese cities like Beijing and Shanghai, prices continue to rise, but in dozens of third- and fourth-tier Chinese cities rarely visited by foreigners, overbuilding is out of control and a major property-market slowdown is now under way. This evidence implies a city like Manhattan is somewhat sheltered from over-building with its large foreign demand and very limited land, but the boroughs could be at risk.

The 200 or so Chinese cities with populations ranging from 500,000 to several million account for 70% of the country’s residential-property sales. In many of these cities, developers are slashing prices and offering freebies such as kitchen furnishings and parking spaces as they try to work through vast gluts of unsold property. Buyers are angry that their investments are losing value…..and too many of these buyers are investors.

When too many ‘junior’ investors enter the real estate market with those ‘get-rich-quick’ dreams of buying pre-construction and then flipping, you can be certain trouble is looming. In Manhattan things are somewhat different as a majority of the current ‘flipper-investors’ are rather rich and most can afford to weather downturns. Some areas of New York are definitely being over-built and it remains to be seen if the demand can keep up with the supply.

Over-supply will also put downward pressure on construction, labor and land costs, three of the driving forces behind the lack of affordable housing shortages.

NEW YORK DOORMAN COSTS AND AFFORDABLE HOUSING

April 14th, 2014

Posted by Leonard Steinberg on April 14th, 2014

New York Doormen are a hallmark of New York buildings, the first and last impression of a guest and often a wonderful welcome home at the end of a long day. They perform numerous tasks during the day and night, many more than the expected opening and closing of doors. As we approach the deadline for the re-negotiation of the doorman union contract, there are several questions I have, especially in this era of “affordable housing awareness”.

The recently re-negotiated Union Doorman contract will raise the average wage for a New York City doorman from $44,389 to $49,402 by the contract’s end.  Additional cash (un-taxed) tips are on top of this. Buildings then have to pay an additional $20,000 per year for  benefits, hence a cost to the building of around $70,000.00 per year per doorman. A 24 hour doorman service requires at least 4 doormen on staff, hence an annual cost to the building owners of roughly $280,000.00 per year. An amount like this is manageable when shared by a larger number of unit owners, but for small buildings its a disaster. Is it realistic for a doorman to be paid the same as a teacher who has to study for years for a bachelor’s degree to learn certain skills? Is it fair that a doorman who sits at the desk of a small building surfing the web all day out of sheer boredom should be paid more than double that of someone working physically non-stop at a fast food restaurant?

I wonder if doormen’s pay should be directly relative to the number of units and owners they are servicing: Is it fair for a doorman that is servicing 200 unit owners to get paid the same as one who services 25?

Is it fair that the costs for doormen are the same in co-ops as they are in condominiums when most co-ops are taxed significantly less than condo’s thereby allowing their total monthly costs to be lower to absorb the services costs more easily?

How do small buildings keep up with the costs of a doorman when large building are paying the same divided amongst many more unit owners?

I think the answer is for each building to do what works best for them and then let the free markets do their thing. For some buildings a virtual doorman is the answer. The concept is somewhat similar to those self-check-outs at Home Depot. They work, but they are much less personal, and they kill jobs. Security Guard services are a good option too.

Doormen are entitled to fair pay. But what is fair? Doormen are entitled to health care benefits. But belonging to a Union is not the only way to get fair wages and health insurance. Many non-union buildings do indeed pay fair wages and provide health insurance, but cannot justify the additional expenses a union doorman set-up costs.

I love my doormen: they are truly great. I do feel badly for them as often they spend so much of the day doing absolutely nothing as I live in  a very small building. The costs for a doorman are a growing problem for smaller buildings. Large buildings can absorb this cost more easily. I wonder if it would be better to have six 4-hour shifts instead of three 8-hour shifts so that being a doorman could be a part-time job, one that supplements income or provides jobs for the young while they learn skills that can lead to bigger paying careers? Maybe a high-tech automated doorman system that is significantly improved from the current virtual doorman system is the answer? Maybe small buildings on a block could group together to create a shared package room?

Monthly carrying costs cannot continue to spiral upwards. Novelty solutions are needed, especially for smaller buildings.

MAYOR DE BLASIO’S NEXT 100 DAYS

April 13th, 2014

DE BLASIOPosted by Leonard Steinberg on April 13th, 2014

Many have asked my opinion of Mayor De Blasio’s first 100 days in office: I was lambasted by many for vocalizing my support of him……surely someone in real estate could not support this obviously liberal mayor for New York City? Well, I did. And I did so with good reason. I felt working WITH the inevitable mayor would be much better for all New Yorkers than working against him. So here is an assessment of his first 100 days with some thoughts for his next 100 days.

Here is the good news: first and foremost, his focus on crime and safety is admirable and his choice in Police Commissioner (Bill Bratton) was outstanding. Comparing the first quarter of this year to the first quarter of last year, murders are down 9.5%, shootings are down 3.4%, robberies are down 7.2%. That is a great start, and he deserves credit for this. Of all the issues De Blasio opponents had, their biggest fear of soaring crime has been squashed. Keep up the great work in this department Mr. Mayor!

The Mayor has emphasized traffic safety, clamping down hard on out-of-control cab drivers (remember cab drivers always used to whine that Mayor Bloomberg was being too tough on them?) Traffic deaths are down 26% in the first quarter of this year. That’s a great start. His focus on jay-walkers is impressive too and needs to be expanded, but now he should clamp down equally hard on out-of-control cyclists who appear immune to the law. He should also obey the law personally, so running red lights, jay-walking and speeding just because you are the Mayor won’t cut it. Especially when he is notoriously late. Set an example.

The Mayor’s ‘TALE OF TWO CITIES’ election theme continued throughout his first 100 days: Now he should apply this theme to ALL areas, not just a select few. His personal real estate tax bill is a quarter of many equally valued New York properties: he should publicly acknowledge this gross disparity and vow to fix the corrupted real estate tax system, of which he is a huge beneficiary. His silence on this subject is deafening. He is not to blame for this problem: the Bloomberg administration kept this mess growing throughout its 12 years. But now its time for him to fix this once and for all…..if he is indeed the Mayor of Fairness.

De Blasio’s plan to charge rent to charter schools was scuttled when Governor Cuomo squashed it (as expected), and his demand for power to increase the minimum wage in New York City went nowhere either. I would propose he encourages any school system that produces strong results before trying to appease the Teacher’s Union whose priorities and motivations seem skewered at best.

The Mayor’s skills at managing huge snowstorms was put to the test, and he did not fare too well. Manhattan needs to be cleaned up as a priority as it is the economic driving force of all of New York. A sleepy lane in Park Slope should never be the priority of snow ploughs. I agree equal and fair treatment is needed, but his priorities need adjustment on this subject. Those who voted against you should not be punished with poor service. Especially those who pay a huge proportion of the tax bills. Making statements such as “our sanitation workers and all the city agencies involved did a remarkable job of keeping this city clear” should be avoided when they simply are not true. There were snow days where many parts of our City were a thorough disgrace.

De Blasio got the $300 million funding for Pre-K schooling: Bravo. And an equal thanks to Governor Cuomo for not raising taxes to achieve this. When seeking funding for programs, it may be a good idea for our mayor to address waste first: I see thousands of City lights on at times where its bright outside. This is probably just the tip of the iceberg and I know if he were to really sink his teeth into the inefficiencies of government, hundreds of millions could be saved.

De Blasio also expanded paid sick leave, the first bill he signed into law. Now he should monitor whether this law is being abused or not.

De Blasio’s focus on AFFORDABLE HOUSING is admirable: I think he learned the hard way that making something affordable in New York is a lot tougher when land, union labor and materials are so incredibly UN-affordable. This will continue to be a huge challenge. In the next 100 days he should do a City-wide audit of all those receiving affordable housing benefits: I would bet there are many, many abusers of the system that could create IMMEDIATE affordable housing for those that truly need it. The system whereby a ‘select chosen few’ are the beneficiaries of affordable housing is neither fair nor equal. And affordable housing should not be anyone’s ‘right for life’. Those most deserving should be the priority.

Mayor De Blasio’s public disdain for luxury real estate has waned a bit: I believe he has seen the light that real estate truly is the ATM of New York tax dollars and economic activity. Imagine if we stopped all the luxury housing construction today how many jobs would be lost, how much tax revenue would be lost, how much economic activity would be lost? It appears Mayor De Blasio is more aware of this now than 100 days ago……he should continue to encourage luxury construction AND affordable housing construction, all the while remembering we are a capitalist society.

Garbage collection in the City is antiquated at best: it is the cause for unsanitary conditions, unsightly streets and a huge contributor to congestion. Our Mayor needs to address this and bring garbage collection to the 21st Century.

De Blasio is learning that his role as Mayor is mostly that of effective manager…..this should be his focus. Political activism is great for obtaining votes, but then reality sets in. Mr. de Blasio served eight years in the City Council and four years as public advocate, but he entered City Hall with little management experience. Efficiency should trump all. Fairness can only be achieved through discipline. An un-disciplined New York is a chaotic New York.

 

 

THE BENEFICIARIES OF FEDERAL TAXES: NO, NOT NEW YORK!

April 13th, 2014

capitolPosted by Leonard Steinberg on April 13th, 2014

For every tax dollar New Yorkers give the Federal Government each year, they only get back 79 cents in Federal funding. You might conclude that the Federal Government is wasting our money somewhere, but oh no: just like most corrupt tax systems, this one has its beneficiaries. Mississippi  receives $ 3.07 for every dollar paid in….yes, triple!  Florida gets…..brace yourself…..$ 4.57!  Just like the disgraceful New York real estate tax system where we all receive about the same services from the government, yet some have to pay substantially more property taxes for their homes with identical market value……so that others can pay a lot less……just because!

A recent study found these disturbing facts establishing state-by-state federal funding as a percent of state revenue and the number of federal employees per capita and how many dollars in federal funding state taxpayers receive for every one dollar in federal income taxes they pay. Even more interestingly, the more dependent a state is on the federal government, the less likely it is to charge high tax rates: why charge high state taxes (or charge state taxes at all)if you can get your funding from others in America less worthy?

I feel certain some will argue good reasons for this disgusting abuse and disparity: I will call it what it is:  THEFT!

Just listed! 1 Bedroom/2 Bath with great proportions and the perfect terrace for al fresco dining!

April 11th, 2014

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Located in the heart of West Chelsea Arts District, Downtown’s most vibrant neighborhood that provides a unique mix of the world’s leading art galleries, restaurants and retail, and anchored by the remarkable Highline Park (that connects West Chelsea to the Meatpacking District and the Hudson Yards) and the Hudson River Park (with Chelsea Piers), this elegant quiet home located in a full service 24 hour doorman condominium is especially appealing as it boasts a private, west-facing terrace the full width of the apartment. A gracious foyer leads to the generously scaled living and entertaining space. Gorgeous, brand new wide-plank oak floors feature throughout this home. A sleek kitchen with A-grade appliances is perfect for creating that perfect meal. A large bedroom
suite features a sizeable bathroom with deep soaking tub, 2 sinks and an enormous shower stall. There is a full second bathroom and a washer/dryer. There is an abundance of closet space including a large walk in closet in the bedroom. The 22 unit VESTA 24 is a very elegant, immaculately maintained boutique-sized building close to all conveniences.

Listing: www.elliman.com/1784365

THE PAST AND THE FUTURE COLLIDE IN NEW YORK

April 11th, 2014

Urgent Care New York NY - CityMD icon_fullPosted by Leonard Steinberg on April 11th, 2014

The other day I witnessed the past and the future within a few blocks of one another in New York:  The first visit was to the US Post office where I had to buy one postage stamp (I know, ridiculous!). Entering the office felt like a step back into the 60′s.  A very friendly lady behind the counter offered help and I purchased the one postage stamp (to mail payment for a parking fine, which of course had to be mailed and could not be done on line via a credit card!) I was handed the stamp and a receipt the size of a lengthy grocery receipt……really? For one stamp?  I asked the lovely lady why so much receipt for such a small item?  Her response: “Thats the Post Office!” There should be zero wonder why both Republicans and Democrats met this week to discuss different ways of preventing the Post Office from extinction: of course their focus was based on cutting services, not improving efficiencies. Saturday delivery appears doomed.

A few blocks away on West 23rd Stree just of Madison Square Park, I rushed to CITY MD with a bad finger cut. I had thought of going to a hospital emergency room, but that thought faded fast as I recalled the antiquated third world spectacle that is the scene at most emergency rooms. I walked into CITY MD and discovered the future: a clean, open waiting area, with friendly attentive front desk staff. An informed, smart nurse took down all the insanely lengthy details, and soon a doctor was there to examine the damage. The finger was swiftly and expertly sewn back together and I departed with a signature and written details on how to nurse my finger back to good health. The following day I received a call to see how things were progressing. Really?

The reality is that ‘the old way’ of doing things is in great danger. There are elements of good old fashioned business that should never be lost or forgotten. In fact, many aspects of old fashioned business such as honesty (especially in real estate brokerage where ‘blatant lying’ is the ‘new honest’….and endorsed by those who remain silent)and personal attention need to be re-discovered as they too are at risk of extinction. Yet adapting and evolving to the ever changing needs of our society are as important. The Post Office should stroll down the street to CITY MD to learn a thing or two about the future.