Posts Tagged ‘new york times’
Saturday, April 20th, 2013
Posted by Leonard Steinberg on April 20th, 2013
Has a new pricing insanity set into the New York uber-luxury market with 33 official listings (with many more un-official ones!)above $ 30 million and three over $ 100 million: Is $ 100 million the new $ 50 million just within a matter of months? It appears so, and I call that hyper-luxoflation!
In this morning’s New York Times an entire article is dedicated to a developers quest to create a massive apartment on top of a rather mediocre building by buying up all the owners of the top floor units. The Times wrote a similar article a few months ago about another $ 100m listing……is this reporting or simply excessive Kardashian-style publicity-seeking? There are other examples of ’trophy’ apartments for sale on top of mediocre buildings……and they are not selling. There are too many mediocre properties priced into the stratosphere that simply do not warrant their asking prices, no matter how crazy-active this market is. Yes, there certainly are some outstanding properties asking very high prices……but those prices can be justified. Satisfying the ego of a seller is a dangerous precedent that seems to have found a place in our manic society: just how many Russian oligarch’s are there to buy these properties?
With gold’s plummeting pricing explained by lesser concerns about inflation, why exactly is the very top end of pricing in Manhattan inflating at a pace that is simply outside the realm of reality?
Saturday, March 16th, 2013
Posted by Leonard Steinberg on March 16th, 2013
The New York Times ran an article for this weekend’s REAL ESTATE section talking about the ‘Downtown Spring awakening’: 150 Charles Street, the Witkoff Group developed, CookFox-designed building in the West Village achieved over HALF A BILLION in sales in 4 weeks, certainly a record for New York real estate, and possibly globally. Unlike any other building, the buyer dedication to the West Village has been rather astounding with about 1 in 5 buyers opting to buy, where traditionally its 1 in 20-25 buyers/appointments who actually buy in new developments. Aside from the super-desirable location, separated from the West Side highway by a buffer zone of townhouses, buyers have resonated unlike any other time because of the beautiful, contextual design, the host of amenities including parking, a drive-through drop off, almost 40,000sf of pre-planted landscaping that is maintained by the building (a first), a 75ft swimming pool, 3,000sf gym, playroom, lounge, juice bar, service elevators…..and the list goes on. Add to this the fact that there are about 80 different floorplans (out of 91 units)so each apartment represents its own unique experience within the building, sensational views of charming Village street-scapes, the Hudson River and park and panoramic Southern and Northern skylines. The finishes are highly customized by Alan Wanzenberg and of a caliber never seen before in the West Village: they are elegant, classically contemporary in style and designed to transcend fashions and of-the-moment trends. A building of this caliber can never be reproduced ever again in a location of this stature, making the building a true collectors item.
Sunday, January 20th, 2013
Posted by Leonard Steinberg on January 20th, 2013
The New York Times did an interesting piece this weekend trying to answer the question: What is MIDDLE CLASS in Manhattan? The answer remains muddied.
In a city where the cost of housing overwhelms all other costs, where you live and how much you are paying for that housing truly determines what money you have left over to spend on other stuff. So I want to know where is the outrage by those paying market rates for their rent when a select few get the huge breaks through rent controlled and stabilized apartments? Often those are the people who could afford to pay above market rates. I know of a wealthy (rather famous) couple living in a very fancy Upper West Side building paying $ 2,000/month in rent while their neighbors pay up to $ 20,000/month in rent…….many have sold too in the $ 5m+ range. This couple divorced for technical reasons to hold onto their cheap rent and keep a fancy house in the Hampton’s. All of us have to pay for this abuse: It’s theft, no? Or does the changing meaning of the English language give this bad behavior a nicer sounding name? Doesn’t a large pool of rent controlled apartments reduce the volume of available properties thereby causing those available to cost even more?
I have argued for years that there should be tax breaks, just like the ones you get for having children or dependents, for cost of living based on the city you live in. If it costs double to live in Manhattan than it does in Minneapolis, surely that would be fair? Yet our tax system considers $ 250k/year as equal anywhere in the country. It’s absurd.
I think its time for the Manhattan middle class to revolt against the leaches of our society (not to mention the law-makers who allow it) who are abusing the system at their expense!
Tuesday, November 27th, 2012
Posted by Leonard Steinberg on November 27th, 2012
Warren Buffet has said what we have been YELLING in a recent New York Times editorial: Income of $ 250,000/year is NOT rich. Not in New York, or Los Angeles, or Miami, or San Francisco, or a host of other larger US cities. His piece addresses brilliantly the hard facts about taxation and solutions that simply make sense to get us back on track:
- The FORBES 400, the wealthiest individuals in America, hit a new group record for wealth this year: $1.7 trillion, more than five times the $300 billion total in 1992.
- In 1992, the tax paid by the 400 highest incomes in the United States averaged 26.4 percent of adjusted gross income. In 2009, the most recent year reported, the rate was 19.9 percent.
- The group’s average income in 2009 was $202 million — thats a “wage” of $97,000 per hour, based on a 40-hour workweek.
- More than a quarter of these ultrawealthy paid less than 15% of their take in combined federal income and payroll taxes. Half of them paid less than 20%. And a few paid ZERO.
- Buffet prefers a cutoff point somewhat above $250,000 — maybe $500,000. And additionally Congress should enact a minimum tax on high incomes around 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that. A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultrarich paying rates well below those incurred by people with income just a tiny fraction of ours. Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy.
- Buffet says we need to get rid of arrangements like “carried interest” that enable income from labor to be magically converted into capital gains. He is sickened that a Cayman Islands mail drop can be central to tax maneuvering by wealthy individuals and corporations.
- More importantly we can’t let those who want to protect the ultra-privileged get away with insisting that we do nothing until we can do everything. Our government’s goal should be to bring in revenues of 18.5 percent of G.D.P. and spend about 21 percent of G.D.P. — levels that have been attained over extended periods in the past and can clearly be reached again: this ratio of revenue to spending will keep America’s debt stable in relation to the country’s economic output.
- In the last fiscal year, we were far away from this fiscal balance — bringing in 15.5 percent of G.D.P. in revenue and spending 22.4 percent. Correcting our course will require major concessions by both Republicans and Democrats.
All of America is waiting for Congress to offer a realistic and concrete plan for getting back to this fiscally sound path. Nothing less is acceptable. Entitlements need to be adjusted to more realistic expectations. Budgets need to be cut aggresively without damaging the welfare of the most needy. Billions of dollars of waste has to be fought with the same gusto that we fight other wars. We need to become energy self-sufficient. We need to incentivize companies to keep money in the USA, and return the 2+ trillion dollars that have managed to escape our US economy.
No, I am not one to fight the wealthy at all: I am a true capitalist at heart. But dirty capitalism is where a select few benefit at the expense of others, and I do not subscribe to that. I think that is un-American. Why should a salaried person earning $ 1 million pay double the taxes of another person earning the same?
Surely this prudent, smart, practical Buffet-style policy will produce a robust economy, rampant growth, and ample opportunity to lower taxes in the future?
Thursday, August 2nd, 2012
Posted by Leonard Steinberg on August 2nd, 2012
This week everyone seems to only want to talk to me about the $ 100 million listing at City Spire, the B-grade building at Columbus Circle where the penthouse is listed for an amount that as astounding as the views from its wrap terrace.
Personally, I believe this apartment to be absurdly over-priced….in fact I think its a price as believable as the Kardashian wedding…..and its getting about as much publicity. Is this the new world we live in where even the New York Times becomes party to a scenario as believable as the Hunphries-Kardashian wedding? Of course now every seller in New York is thinking the same strategy…..lets over-price for a headline! Lets price it soooooo high every Russian billionaire will think this is the prize property they MUST own. The reality is right now there is a good slew of properties that are over-priced and not selling. Nothing terribly new. Except their prices are.
Oh well. I guess we are all just one big reality TV show after all. Even in New York real estate.
Saturday, April 14th, 2012
Posted by Leonard Steinberg on April 14th, 2012
After we reported for several months on the extremely busy New York real estate market, this morning the New York Times featured this story…..on the front cover! You know it serious if its on the front cover….
They talked about the lines of people outside 422 West 20th Street…..about 4 weeks after we reported it here (with a photo!). They talked about the return of many multiple bids on strong properties, about 6 weeks after we reported this in LUXURYLETTER, our monthly market report. I could continue to badger The Times for not being as on top of the market as it should be, but I think they have redeemed themselves by placing the story on the front cover. That certainly indicates a level of certainty that should erase any doubts in the minds of all that we are now in a very, very active, strong market.
For the first time in years we are selling un-built condo units off floorplans (WITHOUT A SALES OFFICE) with only a raw concrete shell of a building (482 Greenwich Street, THE ARMAN), and several contracts are out with 3 units already spoken for. Having a reputable developer and builder (and broker!) helps.
Again the subject of how long this will last arose, and the answer is definite: just like really bad markets, really good markets never last forever. We are in a lower inventory period, with super-low interest rates, few new buildings that are deliverable soon, and lots of new global cash seeking a refuge from uncertainty as well as fears of inflation. These factors combined always fuel robust activity.
Any smart buyer to-day would know that buying now with interest rates as low as they are would cover a dip in pricing, although that seems highly unlikely. In fact, the opposite is ture: we see price escalation. I spoke about this a few weeks ago……read it in the Times soon!
Monday, March 26th, 2012
Posted by Leonard Steinberg on March 26th, 2012
This morning Ben Bernanke spoke on the subject of the economy: his conclusion was that the improving employment and growth figures were a product of CATCH-UP. We can see the same thing clearly happening in the luxury Manhattan real estate market.
The above picture shows a line of prospective buyers (no this photo was not taken in 2007!) waiting to get in to an open house at 422 West 22nd Street over the weekend. The new building is one of very few new buildings offering ‘affordable’ price points for buyers eager to be in a top location and a brand new building. These price-points have been largely ignored in the past few years and even more so going forward as developers are mostly focused on the very high end of the market. More importantly this showcases how many buyers waiting for the ‘bottom’ of the market now feel they may have missed that. I spoke to some buyers over the weekend who regret not buying a unit I was selling at 245 Tenth Avenue…..it went to contract at the end of December 2011, and a very similar unit just went to contract…..3 months later……for about 12% more.
So the real estate market’s energy is probably just like the overall economy…. playing catch-up. Its always easiest to see the best time to buy or sell in the rear view mirror. So what does the future hold? Several thousand new apartments are currently in the development stages, and already the sleeping giant that was new construction has awoken. Around the city fences are being erected around construction sites, and the roar of concrete trucks is being heard throughout the city….this is just the beginning. I think the result will be a surge in construction-related employment. Imagine just the downtown market alone where I am personally familiar with about 2,000 units that will be built over the next 2-3 years: thats lots of concrete, wood, windows, steel, bath fixtures, appliances, plumbing, electrical, cabinetry, security, engineers, architects, etc, etc. And once they are completed, all these properties will require furniture, electronics, movers, transfer taxes….what I am really trying to say is that when a sleeping giant awakens, the earth moves and we will see an unprecedented hive of economic activity in New York very soon.
One area that Bernanke addressed was those un-employed who could not find work because they did not possess the new skills the market is looking for. If you compare this factor to real estate, many home owners are disturbed how their apartments are not selling at the record prices they read about in the N ew York Times and Post….or worse, not selling at all. Often these apartments exist in buildings that are out of touch with what the consumer of today wants and expects. I own an investment apartment in a building that had the most hideous lobby and entrance: it looked like a border crossing. The lobby renovation is almost completed, and all of a sudden the pricing in the building just bounced upwards: its a lesson that just like those in need of learning new skills to function in todays new economy, apartmentss and buildings have to upgrade and evolve to compete.
Sunday, January 15th, 2012
Posted by Leonard Steinberg on January 15th, 2012
To-day’s New York Times examines ‘the one percent’ a bit closer than it has in the past. Just like the Times is guilty of espousing averages when it comes to real estate statistics (All media is guilty of that!) it has been guilty in the past of not looking deeper into the subject to fully understand the extraordinary diversity within ‘the group’. Today that changed.
The reality is that the “one percent” is a very, very diverse group and averaging them is completely misleading. Yes, the group does have a few things vaguely in common, but just like all averages, there really is no such thing as an ‘average’ one percenter. Here are some facts to ponder:
1) Within the 1%, only the top 10% of the group earn above $ 6, 5 million annually. Thats about 120,000 households. The average ‘one percenter’ household earns $ 1,5 million. In Manhattan to qualify as a One Percenter, your household has to earn $ 790,000.00 or more…..
2) To qualify, you have to earn at least $ 380,000.00 per year. We all know this makes you very middle class in Manhattan, yet you could be perceived as rich in a small town elsewhere. Its all relative. Many poor people in the USA are perceived as quite wealthy when compared to the poor in other parts of the world too.
3) The jobs of the 1% are not limited to finance, in fact the group has jobs as diverse as is imaginable: Many are managers, ce0′s, physicians, dentists, but there are also book-keepers, writers (yes, there are over 10,000 writers in the 1%!)….59,000 teachers live in households of the 1%…..
4) What do they have in common: not that much, although a good chunk have solid college educations, work extraordinary hours, many are self employed.
5) I asked my brother, the Swiss banker living the goodlife, if there was any one thing he thought was common to the top 10% of the 1%…..he paused briefly and said in his experience most were extremely smart. Smart in their ability to make money. Seriously smart. He then added that there is a growing international group of super-wealthy that combine seriously smart with seriously corrupt…..
6) Inheritance is a big chunk of the “1%” but not nearly as big as you’d imagine. Yes many have inherited some money (40%), but not all have inherited the great fortunes you read about. That is a smaller segment.
7) 22% of the 1%’s income comes from capital gains as opposed to the 99% where its only 2%.
8) Men earn 75% of the money in a 1% household.
9) Sales at the Americana Manhasset, the upscale Long Island shopping center, have already exceeded their prerecession high. Even in down times, the 1 percent has incredible staying power, being far more likely than any other group to stay where they are rather than slip to lower rungs of the economic ladder.
10) 27% of 1% couples BOTH have advanced college degrees.
11) MANY of the very wealthy are super-talented: Didn’t Warren Buffet recently say its unwise to assume everyone should get a college degree when many simply do not possess the IQ to do so? Yes this is an unfair fact of life, just like it’s unfair that someone has the physical ability to throw a ball very well. Or sing beautifully. Or imagine the next tech device. Or win the lottery.
12) Manhattan’s ONE PERCENT carry the New York luxury real estate market on their backs, indirectly creating countless construction jobs, service industry jobs, spurring massive retail purchasing that employs thousands……not to mention the massive real estate taxes paid every year and the transactional taxes (City and State transfer taxes, mansion taxes, mortgage recording taxes…..).
So what is fair in the ONE PERCENT argument? This it a quandary the world faces to-day. I truly believe life is not fair, but for a whole host of reasons. I don’t think its fair that a doctor studies for almost 14 years, making a huge sacrifice and investment, only then to be ridiculed because they earn lots of money. I don’t think its fair that someone blessed with an uncanny ability to play with a ball earns ten times what this doctor earns. And I don’t think its fair that some porno-looking-broad has a reality show that affords her an income tripe that. I don’t think its fair that Lions eat Zebra’s. And I don’t think its fair that Zebra’s make chic rugs. I don’t think its fair when clients take up hours of my time without paying me a penny. I don’t think its fair that wealth is distributed so extremely un-evenly in some arenas. I think its unfair that many have absolutely nothing.
But at the end of the day, what does fair really matter? Health is really all that matters: unfortunately, good health costs a fortune too…..now that’s really unfair.
Sunday, November 13th, 2011
Posted by Leonard Steinberg on November 13th, 2011
In today’s real estate section of the New York Times, the cover article addresses the subject of expiring tax abatements that result in monthly taxes on new buildings that are super-high. In my opinion, this article does not get the story right and misses some very important points:
- Real estate tax abatements, specifically the most popular 421-A, allows reducing real estate taxes by fazing in the full rate incrementally every 2 years over a 10 year period. Monthly taxes start out extremely low. The abatement (that has ended) was designed to stimulate building and encourage buying. At the end of this 10 year period people are ‘discovering’ that the taxes for new buildings are rather high. The article identifies this fact showing how at the time of purchase, buyers should have noted the taxes at the beginning and at the end of the abatement, but fails to mention that most of these taxes have been increased (often dramatically) well beyond their original estimations as assessed values have been raised across the city.
- The article does not address the gross inequality between assessed values: a weak government official attributes it to the fact that assessed values are based on potential rental valuations: this is an antiquated method that should be abolished immediately. Just because 740 Park Avenue does not allow sub-leasing, thereby eliminating any data for rental valuations for the building, should not entitle the bulding to lower taxes than neighboring buildings: should another condo close by be penalized because it does allow rentals? The system is thoroughly unfair, ridiculous and corrupted.
- The article does not address the most important issue of all: Most buildings that have increased assessments are compelled to hire an attorney to file a tax grievance on behalf of the building…..most times these grievances are successful in reducing the assessed value of the building and these attorneys subsequently bill 10% of the reduced taxes. This happens every year. Its a system designed to keep lawyers in business doing something that should not happen in the first place. Who writes the laws? Is this a racket?
The real estate tax assessment situation in Manhattan is a disgrace. It is also un-constitutional if we assume we are all to be treated equally. Yet the Times made this a sensationalist story about the shock of expiring abatements rather than the ridiculous valuations some buildings are assessed at when compared with similar neighboring buildings. This is a huge dis-service to the Times’ readership and the article should be corrected immediately. It’s also time for a major class action suit against the City as (unfortunately) government only wakes up when its voters use the legal system to make the point. Manhattan and New York need to be re-assessed across the board. This is long overdue.
Monday, July 4th, 2011
Posted by Leonard Steinberg on July 4th, 2011
Bank of America Corp and JPMorgan Chase & Co have started modifying tens of thousands of mortgages where the banks deem the loans especially risky, even if the borrowers have not asked, the New York Times reported yesterday.
In some cases, the banks are slashing the amount borrowers owe, citing one case in Florida where a woman’s principal balance was cut in half. The paper said the banks are targeting holders of pay option adjustable-rate mortgages, a type of loan where borrowers have the option of skipping some principal and interest payments and having the amount added back onto the loan.
Such “option ARM” loans were seen as especially high risk in the wake of the financial crisis; the two banks collectively still have tens of billions of dollars of such loans in their portfolios. One law professor quoted by the Times said the banks were behaving in contradictory ways, modifying some loans that should not be and not modifying some loans that should be.
Would it not be smarter for banks to evaluate each mortgage on a case-by-case basis, and make adjustments to that mortgage in the hopes of the borrower being in a better position to continue paying down that mortgage without defaulting? Surely much more time and cost is incurred when a foreclosure takes place, and surely those foreclosures further de-value surrounding properties thereby making the owners of those properties more at risk to default?
Maybe I am over-simplifying this, but a few years ago I provided a 2nd mortgage to a friend. He only needed the ‘loan’ for a few months. The loan was at a high rate of 12%. Then the financial storm hit and he could not pay down the loan. I recently halved the interest to 6%, thereby allowing my friend to have the additional money he would have paid to me to do repairs to the property. Now apply this same philosophy to banks and it becomes clearly evident that money forced into the hands of banks and corporations does not necessarily fuel the economy (It certainly has not fueled job growth!). Putting the cash into the hands of the (responsible) consumer fuels spending, the ultimate driving force of this economy.