Where the Deals Are Happening in 2010
Christine Toes here. Since Noah is on vacay, I thought I would give an update on what I have seen in my own business in the first half of 2010:
Jan 2010 - 201 E 28th, large one bed co-op with outdoor space/views, asking $799K on 9/1, reduced to $749K mid Oct, contract signed early January at ~6% below ask. Closed in May.
Jan 2010 - 77 Seventh Ave (14th St), renovated, converted alcove studio co-op w/ views asking $525K. Multiple offers. First open house 1/17, contract fully executed 1/27. Fastest co-op closing ever due to buyer who was really on top of everything and fast board approval. Closed in April at $520K, less than 1% below ask.
Jan 2010 - 101 W 23rd St, renovated, converted one bedroom in a landlease co-op building. In contract at asking price after being on market since 9/2009. Price drops in Oct & Nov, then with reduction from $275K to $260K on 1/4, OFAC within ten days. Since it hasn't closed, I can't give you a price yet, let's just say it was very very close to ask. Seller and buyer asked for delayed closing. Landlease building, praying for no last minute issues with financing.
Feb 2010 - 115 East 9th St, updated, one bedroom co-op w/ views. On market 2/7, first showings 2/12, 52 buyers viewed property between 2/12 and 2/15. Four offers at best and final. Cash offer accepted over asking price, 1/15. Two bidders were putting over 50% cash down. Two of the bidders had just lost bidding wars on other units, came to view the apartment during a blizzard and came in strong with offers the next day. Seller changed mind, decided not to sell (long story).
Feb 2010 - Williamsburg, Brooklyn new development condo - Under $500K One bedroom, contract out at 8% below asking price, sponsor paying transfer taxes and sponsor's attorneys fees, so total package was 10% below asking price.
Feb 2010 - Williamsburg, Brooklyn new development condo immediate occupancy, 85% sold and closed. $830K two bedroom w/ city views, buyers wanted 15% below ask, developer would only do 10% citing market pick up. No deal.
Feb 2010 - Same buyers as above. Williamsburg, Brooklyn new development condo, 60% sold and closed - $850K two bedroom w/ city views, buyers wanted 15% below ask (prices already reduced 19% since offering plan filing), developer would only do 10%. Buyers eventually increased offer but requested that alterations be done to the apartment. Sponsor agreed to do renovations but buyers had to produce a mortgage commitment letter prior to the renovations being started. Closed May 2010 at approx 5% below last ask.
Feb 2010 - Upper East Side one bedroom co-op with outdoor space, ask $560K, on market for three open houses, contracts signed at less than 5% below ask. Buyer putting 50% cash down. No closing yet due to fact that 50% of building is sponsor-owned. In February, bank said "no problem." Then lending guidelines changed and now bank said "sorry, no deal." Buyer has new lender who says "no problem." Fingers crossed.
March 2010 - Chelsea one bedroom co-op asking $650K, thought customer had it for $615K, contracts went out, higher all cash offer came in, buyer lost apartment, continuing to look.
March 2010 - Chelsea buyer finds Village apartment asking $590K. After another multiple offer situation, he signs contract on the apartment for slightly over the asking price. Closing in two weeks.
April 2010 - What's going on?! After an unbelievably busy Nov-March, nothing seems to be happening! Apartment for sale or for rent in landlease building finds a renter first. Offer of $1.4M all cash for property asking $1.6M, couldn't make a deal happen, reduced price to try to get something closer to what seller's are hoping for.
May 2010 - Offers of approx $2.5M made for two SoHo lofts. Just when we thought deal was struck, other buyers came in and out bid my customers, BOTH buyers were all cash (mine are financing 50%).
May 2010 - New development in Brooklyn comes back on line at significantly reduced prices (as in apartments that were $525K are now $410K). 40 buyers got prequalified by the building's lender within 2 days of first open house. So many buyers making offers, sales office can barely coordinate. Buyer makes offer 2 days after first open house but his first choice is gone already! Makes offer for similar apartment next door slightly below ask, sponsor paying transfer taxes (TTs) and Sponsor Attorney's Fees (SAFs.) Contracts out.
May 2010 - Made offer on UES condop asking $665K for $600K. Buyer came up to $615K, seller came down to $640K. Other broker and I could not get seller and buyer closer together. Apt still on market.
May 2010 - Received offer on Village one bedroom loft for ~7% below new asking price of $650K (was $675K). Seller gives good counter, but buyers will not come up enough to meet sellers "bottom line." Apt has only been at this price for 10 days including a holiday weekend and there are a few second showings scheduled... To Be Continued...
Toes says: Inventory is down and transaction volume is up, especially in the studio and one bedroom market. Apartments that sell the fastest have something special about them - renovations, views, outdoor space, etc. The below 23rd Street and above Houston Street market is alive and well. Williamsburg is also really busy.
Toes says: April / May were slower than the first 3 months of 2010 as far as deal actually being done. Am wondering if it is just my business or if other agents experienced the same thing. I did have two buyers who were rushing to take advantage of the home buyers tax credit, which made them more motivated to purchase. Looking forward to seeing what the summer brings! My team also does rentals and we're booked solid. Summer is the busiest season for rentals. Landlord concessions are way down, many have stopped paying broker's fees and/or free rent. Am thinking renters are going to have a hard time adjusting to new rental market.
Posted by Thisson
Thu Feb 18th, 2010 05:09 PM
Thanks for the report!
My reaction: 525k for an alcove studio? Madness!
Flash back to 1999 (you know, when the DOW was also at 10k like it is now... except for the fact that a dollar in 1999 would buy you about 20% more than it does now): alcove studios in midtown were less than $130k.
This cannot end any way other than badly.
Posted by David UWS
Thu Feb 18th, 2010 05:12 PM
And after this next round of idiots is fleeced of their down payments, perhaps the recovery can begin.
Posted by anonymous
Thu Feb 18th, 2010 05:23 PM
it appears that inventory is up not down. 11% in the last month and a half according to your own website...
Posted by Noah
Thu Feb 18th, 2010 05:35 PM
talking about where deals seem to be happening at, should not be taken as a prediction of the market one way or another. Rather, simply what one agent is seeing out there in her own business and where deals seem to be happening at.
I dont use the SE powered widget anymore, I use my backend analytics, but yes, I have ACTIVE inventory UP about 12% or so in the past 7-8 weeks or so. I see lots of new listings hitting the marketplace in the past 4-8 weeks as the new year began...so basically what I am saying is I see the pace of new inventory coming to market faster than the pace units are being removed or going into contract. Hence the upswing in ACTIVE inventory.
However, I see pending sales and incoming contracts signed activity quite healthy that seems to reflect the seasonality we are used to for this time of year. In other words, the market is still active despite the increase in inventory. Im working on a post for you guys, and trying to get some colleagues to comment on what they are seeing, but they are all busy I only got 1/8 responses back so far! Ill wait until tomorrow and post it, hopefully some more brokers get back to me
as for my business, Im active too for about past 7 months or so...4.4m closed in last 4 months, 4.2m in contracts signed now, and about 7.8m in active negotiations right now, of which 3.4m or so is very close. Best I can tell you
Posted by anonymous
Thu Feb 18th, 2010 06:50 PM
All I want to say is:
Sept 11, 2008, "The Sky Is Not Falling, People!"
Sept 15, 2008, Lehman files for bankruptcy
http://www.urbandigs.com/2008/09/manhattan_real_estate_the_sky.html#comments
I'm done now.
Posted by SteveF
Thu Feb 18th, 2010 08:20 PM
Sept 11, 2008, "The Sky Is Not Falling, People!"
Sept 15, 2008, Lehman files for bankruptcy
Whoever said that was a genius as the sky didn't fall for Manhattan. It didn't even slip.
Posted by Dave
Thu Feb 18th, 2010 10:26 PM
I ran a bunch of errands during that blizzard, none of which were as important as viewing a property for purchase.
But as usuall from Toes... BUY BUY BUY!!!
Posted by Noah
Thu Feb 18th, 2010 10:46 PM
i think we should let that one go...granted the timing and headline couldnt have been worse, many out there argued that both manhattan and the economy would dodge the credit crisis bullet totally unscathed. hindsight is always 20/20
Posted by John
Thu Feb 18th, 2010 10:54 PM
Noah,
If you recall, I commented a couple of weeks ago when you were discussing the Times article about the bonus bounce....As I said then, all the renters with little money were expecting the end of the world so they can buy a townhouse on the UWS for $100K... It never happened and it will never happen....
Now, because they get frustrated of the market survival, they have started the insults...You see anonymous comments calling your colleague a moron because she posted deals happening ... they try to discredit you because your activity is not what they want to hear....How miserable those people are!
Unfortunately, they lower the standards and your site is becoming like one of the many where people do not contribute anything substantial to the discussion... I used to see in the past very intelligent, knowledgeable comments....now, it's only two words, usually to put you down....
You should be concerned that your readers may get alienated...but I guess there is nothing much you can do to prevent this....
Posted by WestSideMan
Fri Feb 19th, 2010 12:16 AM
Don't hate on Toes for reporting what she sees.
Posted by Noah
Fri Feb 19th, 2010 07:27 AM
John - thx for the comment. Yes I do remember that comment. Not sure what I can do about it. Right now, I have less time to write as my time goes to clients and new site development. I need help from contributing writers like Toes and Jeff and Mortgageman and Ana Maria now more than ever.
Fact is, Im seeing craziness out there too...not peak level pricing, but good properties that are priced right are seeing very strong demand and I experienced 4 multiple bidding situations in last 3 weeks alone, lost them all. I asked Toes to write about where her deals are happening so you guys can get an update, as she said she is seeing same thing. I guess people cant forget the past, but my response to that is hindsight is 20/20, and many people back then argued Manhattan wouldnt adjust downward..I think Toes learned from that experience in September 2008, and now she writes about what she is seeing out there, leaving macro and other predictive opinions out of her articles. Just plain old reporting.
Not sure what I can do about it. Thing is, Im bearish when there is reason to be bearish and bullish when there is reason to be bullish, and fact is sometimes Macro worries may not jive with what is happening in Manhattan real estate TODAY.
Thats the thing. People cant accept the market improved from a year ago or is active. Its either frustration or denial or they are a perma-bear that cant accept that -60% never came. Forget the future for a moment. Reporting on whats actually happening is easy for me, I see it. So do other agents. Id much rather keep these comments constructive, but not sure what I can do about it
Posted by Jay
Fri Feb 19th, 2010 09:10 AM
Back when I had a blog, I deleted comments that added nothing to the discussion (such as the ad hominem attacks here). ALL opinions were welcome on the subject (even off the subject) but not the insults. Some people felt I was infringing there First Amendment rights. These people don't understand the First Amendment. Personally, I think you'd be better served with such a policy.
As for the market, I've stopped looking completely. Prices are simply out-of-whack vs. value for me. Obviously others feel differently.
Posted by Agreed
Fri Feb 19th, 2010 10:57 AM
Noah - spot on - people cannot come to grips witht he improvement. It's what it is. The bottom happened and if you missed it you did. Lets focus on what is happening NOW. I would like to know what is happening NOW as well versus 20/20 hindsight and attempts at predicting the future. The reality is whether the permabears want to accept it or not - it is only going up from here. It is sustainable and that's the history of Manhattan. The dips happen but if you don't take advantage and you are paralyzed by FEAR when it happens, you miss the dip - it's plain and simple. So continue with what is going on now, because I for one need to know. Inventory isn't like crazy out there in my opinion, there's stuff- but, it's moving.
Posted by LB
Fri Feb 19th, 2010 12:09 PM
There's a marked difference in tone between Toes' article yesterday and the 9/11/08 one SteveF cites. I think what irks people about the latter is that she sounds like a bit of a snake oil salesman, particularly in the final paragraph. It's not just that her predictions were wrong (as Noah says, lots of people's were), it's the unctuous manner in which they were made.
That said, her article from yesterday is completely different in tone: it's just a list of where she has recently seen properties trade and not an infomercial-like sales pitch. As Noah said, it's just "plain old reporting" on her part.
I don't see how that can be a bad thing, unless she were systematically excluding sales that happened at distressed prices. But I, for one, thought it was fascinating (if a bit disturbing) to see a Gramercy 1BR co-op trade for as high as ~750K, a 7th ave south alcove studio for 525K, etc. Whether you're bearish or bullish on nyc in the short, medium and long term, this is useful info to have.
Cliffnotes: Getting real-time, in the field data can only be a good thing. And I think what people chafed on w/ Toes' prior posts wasn't just that her predictions were wrong but the rah-rah, buy-buy-buy tone that she once had (but now seems to be gone). Intelligent, considerate consumers (ie, most UD readers) won't let their decisions be influenced by a cheesy sales pitch.
Posted by Noah
Fri Feb 19th, 2010 12:20 PM
LB - thank you for the spot on comment! I have often had conversations with Christine on what I personally would love to see her write about here on UD: that is, simple reporting on where her deals are coming in at, compared to say peak levels in 2007 so we have a frame of reference.
She has been doing that. Some asshats out there dont see the improvement in her tone and her style...I guess thats fine, but for most of us, I assume you want other agents opinions on the market and not just mine. Christine is certainly active out there, and its useful to hear about simple reports on where her deals are happening.
Nobody is perfect. I was way way wrong with the reflation rally and on the sustainability of the Manhattan pickup from say May/June 2009. I didnt think it would last and I called it a countertrend surge in activity embedded in a longer correction process. I was wrong. I admitted it, and tried to keep my market reports real time and accurate without bias. Nothing wrong with not being right all the time. Lets just keep it real and keep this site as the place to come to for unbiased reporting in the front lines of Manhattan real estate
thx
Posted by anonymous
Fri Feb 19th, 2010 12:23 PM
Noah,
I gotta tell ya Christine's reporting is exactly what is needed. I do appreciate your economic reporting and they are relevant to manhattan real estate. However, front line reporting about activity is paramount. I can read all about the economic data but I can't see or read about what is happening with activity. As you know Manhattan buyers move in hordes and can turn on a dime so it's importnat to get maybe, twice weekly activity reports. I do like the macro economic analysis too and I'll sure listen if you call another impending recession on the horizon.
SteveF
Posted by SteveF
Fri Feb 19th, 2010 12:24 PM
Noah,
I gotta tell ya Christine's reporting is exactly what is needed. I do appreciate your economic reporting and they are relevant to manhattan real estate. However, front line reporting about activity is paramount. I can read all about the economic data but I can't see or read about what is happening with activity. As you know Manhattan buyers move in hordes and can turn on a dime so it's importnat to get maybe, twice weekly activity reports. I do like the macro economic analysis too and I'll sure listen if you call another impending recession on the horizon.
SteveF
Posted by Noah
Fri Feb 19th, 2010 12:33 PM
SteveF - hey I hear ya! But I dont think Toes is willing to provide reports that often. I wish she was and she knows I would love it! I think I need to revisit the idea of expanding some more brokers to write here, but the challenge is getting someone I know and trust who will maintain the integrity and credibility of UrbanDigs the brand that I fought so hard to build up over the past 4 years
maybe when I relaunch Ill set my next efforts to adding a few more agent writes..I have a few in mind, but they are too busy to do it. I would LOVE if Ana Maria would blog more!
Posted by Ana Maria
Fri Feb 19th, 2010 04:09 PM
I see that, Noah :) Thanks. Yes, will write more and apologize for my absence of late.
As for adding to on-the-ground reporting, I must say I have personally been shocked by how many listings are in contract or have signed contracts. Of 25 possible listings I pull for my clients that match their criteria, I now need to assume at least half are not available any more. That has surprised me. Frankly, I'm lucky to have 25 possible listings to begin with for some of my buyers, which seems just crazy to me.
Further, on the rental side, it's a joke! For as much as I believe there's tons of inventory out there, and that this time of year nothing moves, let me tell you, things are moving.
I can't quite explain either of these phenomenon other than to say that since inventory dipped so much towards the end of the year, the limited demand that IS out there is actually taking property off the market.
I have a natural bearish tendency (my partner's more of a natural bull) and I am surprised.
Do I think this scarcity feeling will last? Probably not - but BOY would I love to be wrong!
Posted by Noah
Fri Feb 19th, 2010 04:57 PM
no need to apologize! figured to take my motivational speeches to this forum for a change!
cant wait to see your next discussions!
Posted by flipside
Sat Feb 20th, 2010 06:08 PM
In fairness, would be good to show examples of what's not trading so we can understand the other side. For example, I looked at Corcoran - 424 E. 52nd has a 2 bed 2 bath started at 949k and it down to 890k - apt. in nice condition and nothing is happening - it's been a long time that that has been on the market. There are plenty of examples like this. I am not a perma-bear by any means but I still think in this market the majority of properties in prime manhattan still take a long time to sell and they are going at steep discounts unless maybe you're in a niche downtown seems like.
Posted by Fred
Sun Feb 21st, 2010 12:01 AM
The overhang above $1.2mm is huge and growing and there is a lot of increasingly desperate equity that sees no exit on the horizon. What happens to a pre-war 2 bed that asks $1.2mm when the new spanky new Related 2 beds get whacked into the $1.4mm range?
Posted by flipside
Sun Feb 21st, 2010 10:24 AM
Related's properties while new they tend to be much smaller than many older 2bed 2baths listing at 1.2mm. I think there might be more damage to a new condo 2b2ba slashed to 1.4 than a larger spaced co-op for example at 1.2mm. Why would I pay condo closing fees on a smaller space vs a larger co-op space and less closing fees even if there's a flip tax on a co-op for example. The maintenance on the Related property would have to be miniscule but even then - those condos are so small. But either way, 1.2mm in a non-Related Group building is usually far more space and a better value imo and so I think the newer property would have the problem versus the older one. These days the difference between 1.2 and 1.4 is significant. Therefore, if the top of my budget is 1.2 - I wouldn't even look at anything for 1.4. I think it's apples and oranges. Still - today value is king and therefore, I'd ignore the 1.4 when I can get way more at 1.2.
Posted by Thisson
Mon Feb 22nd, 2010 12:24 PM
As Noah says, deals happen at all prices.
I don't like these prices, but you can't fight the tape. And you can't make decisions if you can't see the tape, so keep the facts coming (ugly or not!)!
@Flipside: I think that in 2004, those apartments at 424 E. 52nd Street would have been priced somewhere between $1.2 and $1.5 million. In 2004 I was looking for decent 2 bedrooms in that neighborhood and I could not find anything inhabitable below 7 figures. And that's a great block, by the way!!!
Posted by halcyon33
Sat Feb 27th, 2010 09:05 PM
Inventory doesn't really look way down to me. Anyone else?
Posted by coach handbags
Thu Aug 12th, 2010 09:54 PM
May 2010 - Offers of approx $2.5M made for two SoHo lofts. Just when we thought deal was struck, other buyers came in and out bid my customers, BOTH buyers were all cash (mine are financing 50%).