Archive for July, 2012
Tuesday, July 24th, 2012
Posted by Leonard Steinberg on July 24th, 2012
Today a report to be released by Zillow indicates that home prices in the second quarter rose from the year-ago period for the first time since 2007, according to a closely watched index, the latest indication the housing market is starting to recover. In the quarter ending in June, home values were up 0.2% from the same period in 2011.
Like most other reports, this report is too a reflection of closed sales, hence a bit of a time delay on what is really happening in the markets right now. In Manhattan we are seeing a very unusually busy July, traditionally a slower Summer month. We are seeing multiple bids everywhere. Properties that once sat idle are in contract. The inventory shortage is worsened by the fact that fewer people will list a new property in the Summer. And the fear of the new construction inventory coming to market being priced around $ 2,000/sf and up is (wisely) scaring buyers into committing to a property now before an inevitable further escalation occurs…..while they can still commit to the low interest rates.
In my opinion Zillow’s data is not a great reflection for the Manhattan market because the time it takes for a property to get signed to closing is unusually long here: the best reflection of what is going on in the market in real time is a report on signed contracts: while not 100% accurate, it is much more reflective of current market conditions. That is why LUXURYLETTER is so widely read, the only monthly report on signed contracts AND closed sales.
We have been hearing of vastly improved activity in pricing in many other markets around the country for some time now. In my building alone, an apartment sold for $ 1 million less a year ago…..and indicator of price escalation over 15%. This is unusual, although the very high end of the market appears to still be experiencing LUXOFLATION, the inflation that applies to the super-luxury market and can be witnessed in art, car, and other luxury goods pricing, field by a growing international wealthy community.
I feel certain that once this new wave of inventory hots the market, priced higher than where many apartments are trading to-day, the averages will rise in Manhattan again, and a new ‘normal’ will set in.
Friday, July 20th, 2012
Here is a shot of progress at the construction site of the new Whitney Museum at the start of the Highline Park…..looking good!
Monday, July 16th, 2012
Posted by Leonard Steinberg on July 16th, 2012
It is fact now that US corporations are sitting on almost $ 5 TRILLION in cash, both domestically and internationally. This cash sits idle as corporations’ frustration grows because consumer demand is not strong enough to justify solid, meaningful business investment.
This is my argument: Consumer demand is weak because unemployment is high and consumers are nervous. If that is the case, creating working, SPENDING, functioning consumers should not just be the priority of politicians and government (something most business leaders say is not the responsibility of government!) but should be the NUMBER ONE priority of corporations too. I have much greater faith in corporations ability to do this.
So this is what I am proposing…… $ 5 trillion is enough to pre-pay for 100 million $ 50,000.00 per year jobs for one year. To be more conservative and prudent, just take one third of that amount ($ 1,66trillion) and create 16,5 million $ 50,000.00 per year jobs for 2 years. Can anyone honestly tell me that this investment would not pay off? I don’t believe it would help, I believe it would make our economy SOAR. Just imagine all those people with their $ 50k salaries buying I-pads, stoves, cars, clothing, furniture, homes, etc, etc. The money these people would re-distribute into the economy would fuel demand that would fuel more business investment. (And some of the taxes they would pay could help pay down the deficit.)
Corporations could argue that it is not their role to cure the unemployment problem in the USA….really? Are corporations too weak to invest in their future, even 12 -24 months from now? Yes, they would all take a big hit on their cash positions accounting-wise. But what if the IRS/government stepped in and said all those squirreled away trillions could remain tax exempt but only IF used to create jobs? And surely the increased consumption would re-fuel those cash coffers? Its time to re-evaluate the ridiculous short-sighted quarterly mentality of our economy anyway and this could fuel a change.
A combined effort between corporations and the government is the key to our economic woes in my very humble opinion.
Saturday, July 14th, 2012
Posted by Leonard Steinberg on July 14th, 2012
I never thought I’d see the day when something more annoying than FACEBOOK would hit the market…..has that day come? Yes, FACEBOOK is wonderful in connecting people and it certainly has helped me find out what an old school friend is eating these days. In real estate land, the excessive use of Facebook has however become somewhat tiresome. Now along comes Lady Gaga’s LITTLEMONSTERS.com.
Maybe no-one could have come up with a more appropriate name for a social networking site suitable for New York real estate brokers: LITTLE MONSTERS? Perfect!
Tuesday, July 10th, 2012
Posted b y Leonard Steinberg on July 10th, 2012
Mayor Bloomberg yesterday unveiled a “microunit” apartment that would make some hardened NewYorkers claustrophobic: The homes measure between 275 and 300 square feet, the size of some ATM vestibules in Times Square, and will be built in Kips Bay. They are part of a pilot program to find housing for people who live alone or with only a partner.
So is 275-300sf sufficient space for a human being? Absolutely. Not for everyone, but certainly for those who enjoy, small, affordable, micro-managed space. I think its possible to to design a 300sf space more effectively and efficiently than most apartments double that size. I have been proposing this for years. Some may say this size apartment is cruel and inhuman, but those same people have never realized that this is the approximate dimensions of the average hotel room. And I have been perfectly comfortable in hotel rooms this size. I do think that the common spaces associated with this type of building need to be very wonderful….a good ‘lounge’ area, gym, etc would offset the need for a place to stretch. Now of course, the average super-sized American may have a problem in this size of space, but others around the globe would consider it quite comfortable. I remember living in a super-small studio…..I could dine 4 people, seat 4 people and I had a queen sized bed….and a piano. It fit together well. It was actually quite chic. I had several of the furniture pieces custom made so that everything fit together like a jigsaw puzzle. I loved that apartment!
I would prefer these spaces to be condominium, rather than rental spaces: How great to own a micro-apartment in a major city that doesn’t require you being super-rich! It could mark the democratization of the city pied a terre……now if only the City and State don’t tax these apartments to death, like they do all other new construction. So to those grieving the rental costs of these units, look to the real estate taxation system to understand why the costs are so high: Of the $ 2,000/month rent they plan to charge, I wonder what the percentage of taxes will be?
Tuesday, July 3rd, 2012
Posted by Leonard Steinberg on July 3rd, 2012
The New York City Budget for 2013 is $68.5 billion, less than a one percent increase over last year. Yet some homeowners saw double digit rises in their properties assessed value?
Since fiscal year 2003, New York City’s budget has increased 53.5 percent from $44.6 billion, higher than the rate of inflation.
Real property tax revenue in 2013 will be $18.4 billion, less than a three percent revenue increase over 2012. But not for all. Some will have to carry a much higher burden because…..well, just because….
Since fiscal year 2003, real property tax revenue has increased 87.8 percent. Thats almost 9% per year!
The real property tax revenue is greater than the revenue from the personal income, sale and use, general corporation, and banking corporation taxes combined. In 2013, real estate related taxes (real property, commercial rent, real property transfer, mortgage recording, and hotel) accounts for 48.3 percent of the city’s tax revenue.
So, if real estate taxes are the critical income producer for New York City, isn’t it time for a MAJOR, complete re-assessment of the entire real estate portfolio of NYC to correct the many irregularities and inconsistencies in our real estate taxation system? There are simply too many glaring beneficiaries and a small group who are punished in the current system and this has to be stopped. Now. Register at : www.NYCDUPE.com to get the fight started.
Tuesday, July 3rd, 2012
Posted by Leonard Steinberg on July 3rd, 2012
The invasion of those hideous fluorescent light bulbs and cold-looking alternatives to incandescent lighting has snowballed recently and the results are simply horrendous, providing a quality of light that leaves humans looking in-human and rather hideous. Some lobbies and hallways of high end New York buildings are beginning to look like suburban medi-clinics. Now, a potential solution that combines the look of a traditional light bulb, with the energy savings we all can agree is important.
The “Lit” concept bulb designed by Elie Ahovi is an extremely elegant and innovative combination of LED and fiber optic technology, and could pave the way for incandescent replacements of the future. “Lit” proposes that light from LEDs can be piped into fiber optics which take on a look similar to the filament inside of an incandescent bulb. A traditional Edison-shaped polycarbonate housing covers the fiber optics giving the concept a familiar look to complement any style of fixture.
Again, technology leads the way for solutions to everyday problems!
Monday, July 2nd, 2012
Posted by Leonard Steinberg on July 2nd, 2012
There is rumor that the prime minister of Qatar is ready to pay nearly $100 million for the city’s most expensive penthouse — a super-slick, Thomas Juul-Hansen designed, two-story showplace atop the One57 condominium across the street from Carnegie Hall, The New York Post reports this morning (is this the same apartment they reported sold for $ 90 million earlier this year or another unit?)….almost triple the cost of the apartment he had wanted to buy where the co-op board rejected him.
Sheik Hamad bin Jassim bin Jaber al-Thani was turned down by the Fifth Avenue co-op board where he wanted to spend $31.5 million on two apartments owned by the late Huguette Clark, an eccentric American copper heiress according to reliable sources.
The massive duplex penthouse nestled above the hotel portion of the building features a “grand salon,” a large mezzanine, four fireplaces, floor-to-ceiling windows, at least five bedrooms, and motorized window shades. While negotiating to buy the 10,923-square-foot spread, Sheik Hamad also opened discussions with Extell Development about buying a cluster of four separate, full-floor condos in the 90-story One57 building, at 157 W. 57th St. That would up the total purchase to a staggering $250 million, sources said. Will the Sheik feel disillusioned when moving into the tallest residential building in Manhattan….only to look up and see Macklowe’s even taller building on Park Avenue looking down on him? So those who said One57 will be a RUSSIAN building, may turn out to be wrong after all. Qatar has an unelected, monarchic, Emirate-type government. The position of emir is hereditary, yet many refer to Qatar as a democracy: Qatar has the world’s highest per capita GDP and proven reserves of oil and natural gas. Qatar tops the list of the World’s richest countries by Forbes.
This story proves the lengths (and costs)some super-rich buyers have to go to to be able to buy a prize property in Manhattan: Does this mean that co-ops are worth half of condo’s that do not have the legal right to turn down buyers? Are co-op’s over-reacting to this profile of buyer? Granted, diplomatic immunity does come with certain risks and other owners in this building could be horrifically affected by an owner of this caliber not paying their common charges, or worse….. remember the Khassoggi’s at Olympic Tower? Is the co-op that rejected this buyer feeling wounded to-day or relieved?