Last to list After losing ground to aggregators, REBNY portal forced to play catch-up, sources say By Candace Taylor The Real Estate Board of New York has recently taken several steps to help give its…... Read more >

Last to list

After losing ground to aggregators, REBNY portal forced to play catch-up, sources say
By Candace Taylor

The Real Estate Board of New York has recently taken several steps to help give its members better access to data in the increasingly digitized world of residential real estate.

As of July 1, REBNY instituted a rule requiring its members to enter sale prices into the group's back-end listing system (known as the RLS) within 24 hours of a closing.

Also, as The Real Deal has reported, the trade association recently requested bids on a new technology provider to replace its existing R.O.L.E.X. data platform, which brokers complain is slow and frequently inaccurate.

A few years ago, both of these moves might have caused quite a stir in the industry and been hailed as steps towards greater transparency.

Now, however, experts say REBNY is going to have to play catch-up.

Brokers in the secretive New York real estate market once had a monopoly on listings information here -- in order to find out what was for sale, customers had no choice but to come to them. Yet over the last few years, the pendulum has swung far in the other direction. Indeed, as it struggles to enforce its rules and enact new initiatives that all members agree on, REBNY -- and by extension, the industry itself -- appears to be losing the battle for consumer eyeballs to outside aggregator websites like Street Easy.com and PropertyShark.com.

At first, these sites were shunned by brokers, but now the majority of the city's firms -- including the two largest, the Corcoran Group and Prudential Douglas Elliman -- feed their listings directly to StreetEasy several times a day. Meanwhile, REBNY's searchable public website, ResidentialNYC, still only has about 70 percent of the city's listings. And while Corcoran joined earlier this year, Elliman still has not signed on.

Ironically, by trying to hold onto its listings information, the industry has been losing the ability to control how it gets to consumers. And some say brokers -- already struggling to maintain their relevance in an increasingly digital world -- are paying the price.

"The consumer right now is impatient with brokers who don't have the information at their fingertips," said Donna Olshan, president and sole owner of Olshan Realty. "StreetEasy is doing a better job than their broker. That wouldn't be the case if we had a really efficient system."

REBNY's new initiatives have spurred the usual calls for a citywide conventional Multiple Listing Service. But that looks unlikely to happen anytime soon, opening the door for even more new players to step in.

"If the real estate community doesn't jump to the plate to really do an MLS, and really have transparency, other people will," said Klara Madlin, president of boutique brokerage Klara Madlin Real Estate, and a past president of the Manhattan Association of Realtors, which operates the Manhattan MLS.

A 'human problem'

When it comes to the back-end system for brokers, REBNY's new 24-hour rule for reporting closing prices is intended to give its members an advantage in the marketplace, said Frederick Peters, president of Warburg Realty Partnership and vice president of REBNY's residential brokerage division.

Closed sales prices are public record, but they often don't appear in the city's ACRIS system for days or weeks after a closing.

"Rather than waiting for the ACRIS price to come out, we'll have on-the-ground information within 24 hours," Peters said. "All of that data is a matter of public record -- we're just accelerating the speed at which our people have it accessible."

But few brokers appear to be adhering to the new rule.

"It's not happening," Olshan said. "Some firms do [it], but most of them don't."

Steve Spinola, REBNY's president, said it may take a few months for the new regulations to catch on. "We will do friendly reminders," he said. "If we find that people are not adhering to it, we will not be as friendly in terms of reminding people."

But it may take more than reminders to get brokers to change their habits. In conventional MLS systems, certain infractions automatically trigger fines or suspensions, industry insiders said. (Only around 25 of the city's firms are members of MANAR's Manhattan MLS.) But REBNY has few mechanisms for tracking compliance and requires firms to try to work problems out amongst themselves before fines are imposed.

"Most of the companies rely on their agents to do the right thing," explained Diane Ramirez, the president of Halstead Property and a member of REBNY's board of directors. She said when infractions at her firm come to her attention they are taken seriously, and agents are frequently reminded to abide by the guidelines. "Our agents know how serious we are with following the rules."

Still, brokers "traditionally have kept this information close to the vest," said Eric Gordon, creator of the listing platform RealPlus, which is used by roughly 300 firms, most of them small, independent
brokerages.

"If there's no penalty, if there's no motivating factor to make agents want to give this information, a lot of them aren't going to be inclined to do it," he said.

Lack of enforcement is also behind many of the perceived problems with R.O.L.E.X. -- the back-end software system that transmits listings among all of the databases used by REBNY member firms -- agents say.

In other parts of the country, MLS systems often double as listing platforms for all of the system's member firms. But New York City has a number of separate internal listing platforms used by local real estate companies, including RealPlus and its competitor Online Residential, Corcoran's "Taxi" and Elliman's "Limo."

In July, REBNY started accepting bids from different vendors for potential new technology to replace R.O.L.E.X., which was developed by Gordon. But instead of embracing the possible change, many agents have reacted angrily, saying that money shouldn't be spent on new technology when many of the problems with the current system are caused by lack of oversight.

"You've got to start with the problem of scrubbing the data and getting it pristine, and making sure everybody plays by the rules," Olshan said. "This is not a technology problem, it's a human problem."

Not only is it expensive for individual city firms to maintain their own internal listing platforms, she said, but she often finds that fellow brokers don't put all of the required information into their listings -- leaving out taxes or the townhouse width, for example.

"It's extremely inefficient," she said. "To have to sit there and research is extremely time-consuming. It lengthens the time on market for the seller and it is not efficient for the buyer. So where have the buyers gone? They've gone to StreetEasy."

Getting consensus

In the mid-2000s, websites like StreetEasy and PropertyShark began offering consumers Manhattan sales and rental information that had never before been available, including days on market and price changes.

At first, StreetEasy was mostly popular with consumers. "The brokers have their internal systems, and that's what they were trained to use," said Dawn Doherty, the vice president of strategic development at StreetEasy.

But now, it does frequent training sessions with agents to help them use the site. And while StreetEasy started by "scraping" firms' websites for data, they now receive direct feeds from all of the major firms several times a day, and many small firms enter their listings manually, Doherty said. (PropertyShark also receives feeds directly from brokerages.)

Sometimes listings pop up on StreetEasy before they make their way through the RLS to other firms' listing systems, Gordon said.

Of course, brokers say StreetEasy has its faults. Some have complained that there are inaccuracies on the site, and since it gets much of its information from feeds, it is plagued by the same problems that impact brokers' internal systems.

"StreetEasy is not immune to a broker who leaves an active listing on the market and doesn't update it," said Noah Rosenblatt, founder of Manhattan brokerage and analytics firm UrbanDigs.

Still, real estate junkies have voted with their mouse clicks. StreetEasy now gets around 12 million page views per month, according to the data tracking website Quantcast.com, while Corcoran.com, for example, only gets 2.4 million -- roughly the amount of traffic StreetEasy got four years ago, Doherty noted. Contrast that growth with REBNY's public site, ResidentialNYC.com, which debuted in 2007, the year after StreetEasy launched. REBNY initially mandated that all firms join the new portal, but members revolted because they wanted customers to search for listings on their own sites, sources explained.

Finally, REBNY relented and made participation optional.

The rest is history: When the site was launched, the city's two biggest firms, Corcoran and Elliman, famously refused to join, and the site never caught on with the public. Corcoran eventually joined in early 2010, bringing the site's total listings up to roughly 10,000 properties (StreetEasy has around 24,000). Corcoran and Elliman both declined to comment for this story.

Spinola remains committed to ResidentialNYC.com. "I haven't given up on my lifetime goal of getting it up to 100 percent," he said.

Sources suggested that changes to the R.O.L.E.X. platform could make it easier for REBNY to require all of the city's firms to feed their listings to ResidentialNYC.com.

But no matter what its intentions, REBNY's efforts are somewhat hobbled by its very identity: As a trade organization, it must get consent from its members before acting.

StreetEasy and other outsiders, on the other hand, don't -- a crucial advantage.

"Our position has always been to stay out of the politics and just work to continually evolve what we've created," Doherty said. "We don't have any rules that we're following in terms of, 'We're paying you, so you can't do this.'"

That's one reason, she said, why the site doesn't currently have plans to offer the type of broker-to-broker information, like commission amounts, that a traditional MLS would have.

But experts say instituting a full-blown MLS is unlikely anytime soon, in part because firms have invested so much in creating their own systems and websites.

"We do not have, and probably will never have, a [conventional] MLS because most MLSes work off a central database," Ramirez said. "We don't all have the same technology and software. We all have spent lots of money on our own systems."

Peters said he favors a citywide MLS but, he noted, "everybody has to want to do it."

And that leaves the door open for even more newcomers. "The industry will be forced to make changes because interlopers will come in, like StreetEasy," Olshan said.

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Townhouse Price Cut Hits Ritzy Neighborhood By CRAIG KARMIN July 20, 2010 The sale of a sharply marked-down townhouse on one of Manhattan's most exclusive blocks could deflate sale prices for townhouses…... Read more >

Townhouse Price Cut Hits Ritzy Neighborhood
By CRAIG KARMIN
July 20, 2010

The sale of a sharply marked-down townhouse on one of Manhattan's most exclusive blocks could deflate sale prices for townhouses throughout an elite neighborhood.

Brokers were in disbelief when Shelley and Donald Rubin, founder of a giant health-care network and proprietor of a Himalayan art museum in Chelsea, slashed the asking price of their East 70th Street townhouse by 25% to $14.9 million in May after it had sat on the market for about a year.

The $14.9 million sale of an East 70th Street house, above, may curb bids for homes such as that next door, below.

That was one of the steepest one-time markdowns for a high-end residential property in recent memory, but it did the trick: the Rubins accepted an offer this month and the deal is in the contract stage, according to a person familiar with the matter.

Listing broker Kathy Sloane of Brown Harris Stevens declined to comment.

Some say this deal, in effect, re-prices the market for East Side townhouses because buyers and brokers will now use the Rubins' pricing as a benchmark for similar properties.

"That sale is going to color any buyer's impressions on the Upper East Side," says Wolf Jakubowski, a Brown Harris Stevens agent who specializes in Manhattan townhouses. "Owners are going to need to pay attention. If they are not already planning markdowns, they should at least expect to see lower offers."

Two properties that brokers say are in superior condition to the Rubins' home but are still expected to feel the pinch: a neighboring townhouse on East 70th Street with an asking price of $27 million; and a mansion on East 71st Street that is asking $28.8 million.

The Rubins purchased their townhouse in 1995 for $5.05 million, according to Streeteasy. Mr. Rubin is the founder of MultiPlan, a managed heath-care network, and known for his philanthropy and large collection of Tibetan art.

He bought the former Barneys building on Seventh Avenue for $22 million during a 1998 bankruptcy sale and transformed the one-time fashion emporium into the Rubin Museum, which features Asian art.

Through a representative, Mr. Rubin said it wasn't appropriate to comment because there was not a final sale.

Within the brokerage community, there's some debate about whether the Rubins' markdown reflects a new reality or if the couple sold on the cheaper side. Mr. Jakubowski says he and other brokers who toured the townhouse last year—viewing its roof deck, garden, hot tub and wood-paneled library—offered appraisals between $16 million and $18 million. Those assessments suggest that the property eventually might have attracted a richer offer.

Others say the market tends to find the right level. Most anyone asking more than $20 million for a property is expecting more than the market will bear, says Frederick Peters, president of Warburg Realty Partners. "There's no justifying those prices in light of this sale," he says.

Moreover, the block of East 70th Street between Park and Lexington avenues where the Rubin house is located is widely considered one of the most desirable blocks to live, with brokers praising the well-maintained buildings and attractive limestone facades.

That suggests similar townhouses on nearby streets might not be able to command the same price.

Only a handful of residential properties have sold for more than $25 million this year, Mr. Peters says, and sellers shouldn't expect that to change anytime soon.

"Not only are most people less rich than in 2007," he says, "it's not that cool to be seen to be throwing money around."

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Frederick Peters: Manhattan RE Mid-Year Report Posted by Noah Rosenblatt on July 16, 2010 at 8.28 AM A: Here is an excellent summation on the first half of 2010 by Frederick Peters, President of Warburg…... Read more >

Frederick Peters: Manhattan RE Mid-Year Report

Posted by Noah Rosenblatt on July 16, 2010 at 8.28 AM

A: Here is an excellent summation on the first half of 2010 by Frederick Peters, President of Warburg Realty. Fred really combines his experience and wisdom with his 'in the field' observations, anectdotal reports from his agents, and whatever data he has access to for this report. From where I am standing, the observations are spot on. The entire article is worth a read, with some highlighted points to focus on. After you read this, go back and check the Real-time Contracts Signed  (direct from broker updates signaling the pace of listings entering contract from a previously ACTIVE state) chart I posted last week and you can see the confirmations in the data.

From Frederick Peters, "Warburg Realty Mid Year 2010 Market Review"

The second quarter of 2010 behaved like March in the old adage: it came in like a lion and went out like a lamb. April was the acme of a sales avalanche which began gaining force in the fall of 2009. Throughout Manhattan and western Brooklyn residential properties of every category were snapped up, often with competitive bidding, at prices averaging only 10-15% below the 2006/2007 peak. Numerous all time price records were set, especially in mid-sized and larger apartments, during March and April. Confidence and the stock market surged higher.

Buyers began emerging and becoming active during the fall of 2009, as gradually rising prices made them apprehensive lest they miss the opportunity to purchase while the market was still depressed. The wave of purchasing gained traction during the winter, and by March inventory had dropped from a 19 month supply to an 11 month supply, essentially normalizing the marketplace. Larger properties saw particularly robust gains during this period. While the absolute top of the market (properties asking $20 million and above) remained sluggish, demand for properties of six to twelve rooms was intense. It was precisely these properties for which demand had declined so precipitously during the period between September of 2008 and September of 2009. There was little available in this category, especially on the Upper East and Upper West sides, and only those buyers who acted quickly and aggressively succeeded in making a purchase. The early months of 2010 were replete with cognitive dissonance: buyers simply could not believe that they had missed “the bottom” and that failure to act decisively once again left them empty handed just as it had three years earlier!

The smaller apartment market, which had suffered less during the recession, rebounded less dramatically. The one- and two-bedroom markets did see significant absorption, but with lesser price increases and little competitive bidding, as supply for the most part continued to outweigh demand. The inconvenience surrounding construction of the Second Avenue subway depressed prices along that corridor and helped moderate demand for the postwar inventory which makes up the bulk of the housing stock north of 59th Street and east of Third Avenue. In the Village, in which the housing stock remains primarily rental, scarcity drove the market as it had before the recession, with many buyers competing for the few available offerings, especially in the larger two- and three-bedroom categories. In both Tribeca and the Financial District an overhang of unsold inventory from the condo construction boom helped keep prices moderate, while at the same time demand remained strong for the “old” Tribeca lofts, with their high ceilings and enormous windows, in the prewar industrial buildings for which the neighborhood was originally known. In Williamsburg, developers responded early and dramatically to the recession, slashing prices at their buildings and guaranteeing a level of activity which was the envy of most other emerging and more recently gentrified neighborhoods.

As April moved into May and May into June, first economic and then seasonal factors came to bear on the marketplace. Debt crises in Greece and Spain and a falling euro sidelined many Eurozone investors whose interest in New York real estate had buoyed the condo market for years. In our new global economy those European debt concerns began to weigh heavily on OUR equity markets as well. Consumer confidence here at home was further shaken by the program trading driven rout in stocks on Thursday May 6, which temporarily reduced many issues to near zero values. Although the market rebounded, the confidence did not. The jobless nature of our recovery, our mounting national debt burden, and government gridlock, both in Washington and Albany, further depressed the Dow, which lost value during much of June. And then, of course, summer arrived.

Real estate purchasers react in different ways to times like these. While recent developments have certainly taken the sizzle out of our market, deal flow remains healthy as buyers see a home purchase as an alternative to stocks and bonds, with significant collateral benefits. The latter half of June, July, and August are always slower in the residential sales, as both buyers and sellers spend more time out of the city. But with the market a little slower, real opportunities exist for buyers. Some sellers will still be holding out for pie in the sky, but for now that mad moment seems to be over.

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Some Condos Avoid Shoals By CRAIG KARMIN, June 25, 2010   In the upper stratosphere of the Manhattan real-estate market there are a few buildings that seem impervious to the downward drag of the…... Read more >

Some Condos Avoid Shoals

By CRAIG KARMIN, June 25, 2010
 
In the upper stratosphere of the Manhattan real-estate market there are a few buildings that seem impervious to the downward drag of the economy. Fifteen Central Park West is one of these, if a recent deal involving a three-bedroom apartment there is any guide.

An unidentified buyer this week signed a contract to buy the unit for about $19 million, according to a person familiar with the matter. If it's completed, the deal would mark one of the most expensive New York City sales ever on a square-foot basis.

The condo owner, a Senegalese telecommunications mogul, bought the condo for $10.3 million after signing a contract in 2006. While much residential real estate is up slightly since then, his unit will have appreciated by more than 80% if the deal closes.

Considered in absolute dollar terms, the sale isn't especially notable for Manhattan, where apartments have gone for more than twice that amount. But it is among the highest ever in New York when measured by square footage, the industry metric typically used to compare prices on apartments of different sizes.

The sale of the 2,761-square-foot apartment amounts to a price per square foot of about $6,882. That would be higher than all but four other Manhattan apartments that have sold for $10 million or more, according to appraisers Miller Samuel.

The apartment fetched that lofty price the same week that the federal government reported May new-home sales plunged to a record low. In New York, fear remains that a nascent recovery remains vulnerable to the possibility of stock market correction or economic setbacks.

While apartments in most price ranges have enjoyed a rebound since the depths of the downturn, values for most are still far off what they were at the market's peak.

In the ultra-luxury end of the market, condos have been outperforming co-operative apartments as evidenced in deals like the one at 15 Central Park West.

The most expensive condo ever sold by this measure is also at 15 Central Park West: apartment 38A, which went for $27 million in 2008 at $9,486 per square foot, according to Miller Samuel. Three other apartments also sold with prices of more than $7,000 per square foot, including ones at 515 Park Ave. and the Mandarin Oriental residences at Columbus Circle, across the street from 15 Central Park West.
The 15 Central Park West apartment now in contract was listed for $21 million. The six-room condo boasts 11-foot ceilings and panoramic views of Central Park and the river, according to the website of listing broker Corcoran. Corcoran's agent declined to discuss the apartment while the deal is "in contract" or to identify the buyer.

The sale took some veteran brokers by surprise. "I see this as an outlier sale," says Frederick Peters, president of Warburg Realty Partners. "It's not a question of comps. Sometimes a buyer just wants a particular apartment."

Others say that 15 Central Park West has a certain cache shared by only a handful of condo buildings that can command premiums.

"This building has been operating somewhat independent of the luxury market," says Jonathan Miller, president and chief executive at Miller Samuel. "It's one of the best built luxury condos of its era and it has seen tremendous appreciation."

Developed by William and Arthur Zeckendorf, the building between 61st and 62nd streets and the park and Broadway is home to numerous hedge fund managers and Wall Street executives, including Lloyd Blankfein, chairman and CEO of Goldman Sachs Group Inc., and Sanford Weill, former head of Citigroup.

Unlike the city's many recent sleek glass-tower developments, architect Robert A.M. Stern designed 15 Central Park West in the more conservative style of Manhattan's grand limestone buildings of the early 20th century on Park and Fifth avenues.

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Brokerage, We Hardly Knew Ye Courtesy of Frederick Peters of Warburg Realty.  In June, 1980, as a 28 year old doctoral student with a two year old and a baby on the way, I got my real estate license…... Read more >

Brokerage, We Hardly Knew Ye

Courtesy of Frederick Peters of Warburg Realty.  In June, 1980, as a 28 year old doctoral student with a two year old and a baby on the way, I got my real estate license in order to make some money while I completed my Ph.D. At that time the overriding perception of Manhattan real estate agents was one of ladies draped in mink carrying a bunch of keys. Getting a real estate license then (as now) presented almost no barrier for entry; you needed only to take a ridiculously simple state test and endure a mind-numbingly dull and uninformative 45 hour course. I survived both and went to work as a residential broker, not yet understanding that real estate would eat my life.

Brokerage was a very different job in the days before widespread computer use. We had listings, we advertised them in the paper, and buyers came to us for information about what was available. While negotiating and organizational skills were important to success, even the least skilled among us had the keys to the kingdom: file drawers filled with cards containing listing information. There were almost no exclusive listings so there was no co-broking. Buyers had no access to information about what was for sale except through us.

Over the years I have watched an extraordinary step by step transformation in our industry. As real estate firms started to proliferate, the notion of branding crept into the mix. How would we distinguish ourselves one from another? Marketing, which had been limited to placing classified ads in the Sunday real estate section of the Times, began to include magazines. Then radio and TV. As sellers began to give exclusives, the real estate community began to co-broke. For the first time, the possibility arose that a buyer could see everything in the marketplace with one agent.

And then technology completely rocked our world. With the rise of the Internet, brokers no longer controlled access to listings. Information of every sort became public. That change, with all its ramifications, forced us to update our business models and re-imagine our value proposition. If buyers did not need us to find property for them, and sellers did not need us to find buyers, what did we add to the transaction?

Our job, no longer information provider, is now more akin to investment advisor. Today the ranks of residential brokers are filled with former bankers and attorneys. We bring our expertise to bear on the many nuances of the purchase and sale processes. We have become expert online and offline marketers of property and of ourselves,  brand building in both the personal and the corporate spheres.  We still show listings, and we still negotiate (although today more likely with another agent representing the other side than between two principals). We are still, mostly, paid on commission rather than salary. But overall, it’s a different world from the one I entered 30 years ago this month, with a far more empowered consumer population and a better educated and more expert broker force. And today it’s a BIG business!

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http://www.brownstoner.com/brownstoner/archives/2010/05/a_thawing_of_th.php A Thawing of the Development Freeze? Categories: Development, Market Despite what you might think driving through parts of Williamsburg,…... Read more >

http://www.brownstoner.com/brownstoner/archives/2010/05/a_thawing_of_th.php
A Thawing of the Development Freeze?

Categories: Development, Market

Despite what you might think driving through parts of Williamsburg, new building development has not been at a complete standstill. According to an article today in the Wall Street Journal, 364 formerly frozen projects have started back up since February 2009; 108 of those have been in Brooklyn, and of those 31 have been completed so far. "The sites that have recommenced work tell you that there is greater depth to the market than just looking at stalled numbers would suggest," says Kevin Price, a senior vice president of the Radco Cos., a real-estate development firm. "It shows cases where lenders and sponsors are coming to terms." Still, don't expect to see a return to the boom times any time soon. "You're going to see a bifurcated market," says Frederick Peters, president of Warburg Realty Partnership. "Guys with deep pockets have been able to finish their buildings, while a lot of first-time developers walked away."
New Life in New York [WSJ]

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May 27, 2010 Construction Projects Stalled by Recession Are Jump-Started By CRAIG KARMIN Brian Harkin for The Wall Street Journal Workers excavate a site on East 57th Street where construction had been…... Read more >

May 27, 2010
Construction Projects Stalled by Recession Are Jump-Started
By CRAIG KARMIN

Brian Harkin for The Wall Street Journal

Workers excavate a site on East 57th Street where construction had been delayed by the financial crisis.

When New York Schools Chancellor Joel Klein broke ground last week at a development site for two schools and a Whole Foods store, it marked the resumption of work that had screeched to a halt during the peak of the financial crisis.

The 1 ½ acre site, located at Manhattan's East 57th street, is an example of how some developers, architects and retailers were willing to make compromises and wait for the debt markets to normalize to get construction moving again.

"We could have walked away," says the developer David Lowenfeld, a partner at the World-Wide Group. Instead, he says, "we looked to reduce costs."

The Midtown site is one of hundreds of once-stalled construction projects that have restarted in recent months, offering some recovery hopes for the bombed-out building industry. Brian Harkin for The Wall Street Journal

Construction has resumed on a condo building in Park Slope, Brooklyn.

Since February 2009, 364 building sites have restarted work, and of those projects, 94 have been completed, the Department of Buildings said.

The majority of those restarted projects are residential and most have been in Brooklyn and Queens.

"The sites that have recommenced work tell you that there is greater depth to the market than just looking at stalled numbers would suggest," says Kevin Price, a senior vice president of the Radco Cos., a real-estate development firm. "It shows cases where lenders and sponsors are coming to terms."

Buildings Commissioner Robert LiMandri said a new program aimed at enabling developers to restart quickly has helped projects get going again. The department last year said property owners could extend their permits for as long as four years, provided that safety requirements are met.

The previous limit was one year, and many developers had to start the application process anew, delaying working from starting up again.

The restart figures are consistent with other indications that New York's residential market is on the mend—from a pickup in sales that began late last year to fresh signs of life in the rental market. But not all the construction news has been positive.

Stalled construction sites totaled 576 as of April 25, a rise of 12% from the 515 stalled sites recorded at the end of November, according to the Department of Buildings. In Manhattan, the rise was much greater, up 40% since the end of November to 111 stalled sites.

"It's still a problem," says Frank J. Sciame, chairman and chief executive office of F.J. Sciame Construction Co. "Banks continue to hold back on construction loans."

Unemployment levels for the construction industry remain around 30%, says Louis Colletti, president and CEO of the Construction Industry Partnership. "But those restarted sites are good news," he says. "It's preventing the unemployment rate from being even higher."

Mr. Lowenfeld said his project will create 1,100 construction jobs. It involves temporarily relocating one school to 63rd Street to construct new schools at the site, along with retail space and 350 residential units.

Early demolition had just begun when work stopped in the fall of 2008, after debt markets seized up and the city couldn't float bonds to finance the work.

During the work stoppage, the developer, the architect and Whole Foods Market Inc. scaled down their ambitions in an effort to ensure the project could get done. Whole Foods agreed to give up 9,000 square feet of space, settling for 38,000, and some architectural flourishes were simplified.

In April, the city borrowed money in the bond market to resume work. The schools and the Whole Foods store are due for completion in 2012. The housing and other retail space will follow in 2015.

The biggest number of restarted construction sites were in Brooklyn, where 108 projects have resumed and 31 have been completed. In Queens, 101 resumed and 55 have been completed. Most of these sites are smaller residential projects, the buildings department said. In Manhattan, where most of the city's large-scale and commercial projects are to be found, only 36 sites resumed work and two have been completed.

In Park Slope, an independent developer recently restarted work on a four-story condo building that will offer retail on the street level. Anthony Sabatino, who said he is self-financing the project with cash from other family businesses, says he halted work 18 months ago when money became tight.

Since resuming construction last month after his other businesses picked up, he said, "several people have asked me about an opportunity to buy a condo."

Still, some in the industry say the rise in stalled sites reflects a shakeout of the financially weaker and less experienced property developers that tried to ride the boom.

"You're going to see a bifurcated market," says Frederick Peters, president of Warburg Realty Partnership. "Guys with deep pockets have been able to finish their buildings, while a lot of first-time developers walked away."

 

 

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It all started a few weeks ago. First came the return of Tiger Woods, then the volcano eruption, then the sudden return of the real estate market. All over the five boroughs, reports started flying in…... Read more >

It all started a few weeks ago. First came the return of Tiger Woods, then the volcano eruption, then the sudden return of the real estate market. All over the five boroughs, reports started flying in about astronomical sales figures, bidding wars, and houses selling after just two days on the market. At first, I didn’t believe it. A spring rebound? The federal tax deadline?

But it was more than that. Maybe, just maybe, buyers on the fence for the past two years started pulling the trigger. Open houses started seeing huge traffic numbers. At the high end, multiple townhouses sold for more than $15 million. At the $600,000 level, apartments for sale one week were all gone the next. Things were picking up. I asked around, trying to get a handle on just how fast things were moving. Prices shot up like lightning in all ranges. Every day, brokers were calling with stories about the market’s comeback. From 40 sales at a condo in Long Island City since January, to a 300%  increase in total sales from a broker in the Bronx, to new condominiums in Manhattan flying off the shelves, here are some of those stories:

Definitely back
Donald J. Trump
Chairman, Trump Organization
“The market is definitely back, and there are real advantages and opportunities out there. We leased 300,000 square feet at 40 Wall Street — the most activity in any single building downtown — and we are currently looking at several major deals. The penthouse at Trump International Hotel & Tower sold for over $33 million dollars, and I recently purchased two new golf clubs in fantastic locations: Philadelphia and Hudson Valley.  On a national level,  I just received long-term financing for Trump International Hotel Las Vegas.”

Business doubled
John Reinhardt
CEO and president, Fillmore Real Estate, Brooklyn’s biggest real estate brokerage
“In the past 10 days, we have seen business double. That’s right, double. The amount of transactions to contract for the last week of April doubled the previous three weeks. If sellers are listing at the right price, they are selling quickly. The ones who are at the old prices are sitting there. It looks like every neighborhood in Brooklyn is booming, from Fort Greene to Canarsie. We are seeing record-breaking activity in Old Mill Basin, Bensonhurst and Sheepshead Bay. At MeadowWood at Gateway in East New York, 35 units have been sold this month alone, making this its best month ever.”

This is no spring pickup
Louise Sunshine
CEO, Domineum Global Solutions,
considered real estate’s top New York and global consultant
“This is different than a spring pickup. Buyers know they won’t see these prices ever again and now is the last chance to get in the market. Soon, it will be impossible to buy something in the top buildings. Apartments in the Laurel, which has the best amenity package in the city, will not last.”

The lower end is up
Luigi Rosabianca
Principal and founder of Rosabianca & Associates, PLLC, real estate law firm serving an international clientele
“The past few weeks have shown a remarkable uptick. Specifically, the lower end of the market is showing some revitalization because of the tax credit, which has helped that demographic, while the higher end of the market remains solid for classic supply and demand reasons.”

Sales prices soar
Kelly Mack
President, Corcoran Sunshine Marketing Group, top new-development sales and marketing company
“In recent weeks, the performance of our portfolio has been a clear measure of the Manhattan market rebound. Corcoran Sunshine’s deal volume was up 200% in April of 2010 versus the same month last year. Even more encouraging is our average sales price – $810,000 in April 2009 and now at $2.8 million in April 2010 – a phenomenal 254% increase.”

Booming in the Bronx
Gregory Tsougranis
Century 21 Metro Star,
a top-selling Bronx real estate agent
“The massive increase in signed contracts has been a perfect storm caused by the April 30 federal tax credit deadline, low interest rates, steady prices and a supply of quality product. By April 30, we already surpassed our co-op sales for all of 2009.  I have about $2 million in contract in my pipeline. At this rate, we are looking at a 300% increase. It’s unprecedented in the Bronx. I hope the tax credit is extended to help people own homes.”

Continued momentum
Greg Heym
Chief economist, Halstead Property, a leading tristate brokerage
“This is not a recent phenomenon. We’ve seen strong activity for six months. Whether this frenzied pace will continue is the question. This happened without a rise in employment. When jobs come back, which could happen soon, this acceleration might continue.”

Crazy numbers
As reported by new condo sales offices from across the city:
At Solis in Fort Greene, developer Ping C. Moy reports contracts signed on eight of nine units in just five weeks.
At Crystal Point, a 42-story, 269-home condominium building on the Hudson River in Jersey City, 19 homes were sold by Marketing Directors Inc. the past month.
Nest Seekers International has completed close to 40 new sales (of 184 residential units) at The View, 4630 Center Blvd., Long Island City, in the first quarter of 2010. 

The buyer is back
Brian Fallon
A partner of O’Connor Capital Partners, the owner and developer of Manhattan House
“Since April 15, Manhattan House has had 11 transactions, two of which have backup offers on them. We are actively engaged in negotiations with others. The interest and offers received have shown us that the $2 million-plus buyer is back.”

A changed market
Frederick Peters
President, Warburg Realty Partnership
“We brought a classic seven-room (3 BR, living, dining, kitchen, maids) onto the market in a prime Park Ave. building in the 70s  around this time last year. The price was $3,650,000, and it was in nice but not fabulous condition. We kept it on the market till September and during that whole time we got one offer, for $2.8 million. We brought it back on the market earlier this month, for $3,750,000, and it was bought by the first person who walked in the door for $3.7 million. I think that is pretty illustrative of the market then and now.”

Less sleep
Mike Lucev
Contractor from Rockaway Beach
“I haven’t slept in the past 20 days. It’s been mostly commercial work. Custom residential work should come back soon.”

Loads of loans
Richard Mack
Managing director at AREA Property
Partners, huge New York-based real estate developer and international lender
“Residential real estate in NYC has stabilized and is on the way back, but the commercial market is in a different place. The commercial market is awakening but not necessarily improving. I have seen as many loans on the market for sale in the last 30 days [as] I saw in all of the second half of 2009. What happens when people move to foreclose on these loans will determine the direction of the market, but the fact that lenders are selling means that we are on our way to unclogging the logjam in New York commercial real estate. Regularity should follow.”

More lumber
Stephen Fanuka
New York City contractor to the stars
“I’m seeing myself work eight hours per week more than average, meaning I’m doing a lot of estimating and planning forward. In the last 40 days, I’ve spent more on material purchases due to new jobs. Local lumberyards have more material in stock, anticipating a busy season.”

Bidding wars are back
Jacky Teplitzky
Managing director, Prudential Douglas Elliman, top upper East Side real estate agent
“We had a signed contract on behalf of our buyer for an apartment in the $3 million range on the UWS. Buyer sent contract with deposit, and 10 minutes after we got a call from the seller that they had another offer that was $100,000 higher. Our buyer had one hour to decide if he was willing to increase his offer. If not,  seller will go with other buyer.  The buyer actually thought the seller was bluffing and didn’t believe there was another offer on the table. My buyer upped their offer by $100,000 and got the apartment.”

Immediate occupants
Ken Horn
President of Alchemy Properties, builder
of high-quality apartment buildings in Manhattan and Brooklyn
“At Hudson Hill, at 462 W. 58th St. in Clinton, we have done nine contracts in a span of three weeks at almost asking prices. We have averaged about 25 showings a week. It helps that we have immediate occupancy and that almost half of the building is now occupied and there is immediate move-in.”

Flipping foreclosures
Sam Heskel
Appraiser, Borough Park 
“I feel the market is starting to rebound. I believe the recovery will be a long and slow process, but I hope it’s going to be slowly but surely. In Borough Park, condo sales were nearly at a freeze since last year; until the past two months, a couple of contracts were signed and a couple of sales closed at pre-2008 prices. In Jamaica, which is a neighborhood with a high rate of foreclosures, I saw last week a house which was purchased from the bank in January by an investor who renovated the house and put it back on the market. In less than three months, it is now in contract for $400,000.”

Buying sight unseen
Gea Elika
Founder of Elika Associates, an exclusive local firm representing buyers
“While two weeks ago we were doing deals with first-time homebuyers looking to go into contract before the Federal Housing Tax Credit deadline, we are now seeing the top-end buyers reemerge and step up to the plate. I am working with eight buyers seeking homes priced at $3 million and above, and several of these buyers are international investors willing to buy homes sight-unseen, as they are purely playing the currency game.  In addition, I have had two offers accepted in the past week, both around $1 million.”

Brooklyn is hot
Highlyann Krasnow
Executive VP, The Developers Group
“At One Brooklyn Bridge Park, we’ve been averaging six-to-seven accepted offers per week. These deals are not just on small apartments, as buyers are creating combos again. In Williamsburg, overall traffic is up and there is again a sense of urgency. We sold 18 units in the past three weeks at The Edge. Two of the penthouses sold for over $2.2 million each.

Top of the market
Paula Del Nunzio
Broker, Brown Harris Stevens, the top-selling townhouse broker in New York City
“Having closed two townhouses between Fifth and Madison the week of April 15 for nearly $30 million gives the impression the market is definitely improving. Although both transactions were negotiated within 60 days of their closing, the deals of 2010 require much more effort than in the past.”

Landlords end incentives
Noah Freedman
CEO, Bond New York, an NYC sales and rental company
“In rentals, we have seen a big change in who pays us. It was 40% tenant fees and 60% owner-paid commissions until this month. Now, it’s reversed, with 60% tenant fees and 40% fees paid to us by the owners. Landlords are pulling back on their incentives daily. It has gotten busier,  and rents have firmed. Landlords don’t want to listen to offers anymore.”

Increased rental signings
Carole Bloom
Leasing manager, The Corner at 200 West,
a new rental building at 72nd and Broadway from the Gotham Organization
“In the past two weeks alone we’ve seen a 27% closing ratio (people in the door who signed leases), a conversion percentage much higher than the real estate market has seen in this price point in years.  We’ve also raised prices on average 10% in the past two weeks and are renting at higher numbers than most developers and brokers would have ever thought possible. For example, a few days ago we rented an apartment at $112 per square foot — for a two-bedroom, two-bath with a terrace, $12,500.  This week, we also rented a studio for $81 per square foot at $3,625.

The retail scene
Faith Hope Consolo
Chairman, Prudential Douglas Elliman Retail Group
“Retail rents are down 25% still, which is how Madison Ave. filled in all their holes. We hope the same thing [a decrease in prices per square foot] happens in SoHo, where there are at least 80 available locations on the market. The only rates that are holding are on Fifth Ave., at about $2,000 per square foot, the most expensive retail in the world, and Times Square, at about $500 to $600 per square foot.”

Zero tolerance for overpricing
Pamela Liebman
President and CEO, The Corcoran Group
“People purchasing a home now will look back in 12 months and see this as a time of opportunity. Buyers are so much smarter than they were during the boom. Anything overpriced will not sell. We’re telling our agents to price for excitement, meaning to price where people can buy. Today’s buys are emotional, not financial. If the home has everything they need, buyers are making deals.”

 

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How much is too much information? Experts debate should social media sites be strictly business for brokers? In the marketing era where agents need to be everywhere and anywhere, is there such a thing…... Read more >

How much is too much information?

Experts debate should social media sites be strictly business for brokers?

In the marketing era where agents need to be everywhere and anywhere, is there such a thing as too much of a good thing? As brokers expose more about their personal and professional lives on social media, it’s a question more industry leaders are grappling with today. Speaking at a Green Pearl marketing and technology event last week, some of New York’s best sales people gave insight as to where to draw the line.

“There’s a lot of white noise out these,” said CORE President Shaun Osher. “With the advent of the internet there’s a lot of information out there, but do you really want to read everything?”

Prudential Douglas Elliman managing director Jacky Teplitzky would say no.

While a big believer in cross marketing and increasing one’s visibility, Teplitzky says some things are left best to the imagination, meaning social media pages that blend the personal with the professional are problematic for some brokers.

Citing “half naked” and “obscene” photographs colleagues post on their facebook pages, she stressed the importance of maintaining a professional presence on social media. Her solution is simple – keep professional contacts and personal contacts separate.

Teplitzky operates two facebook pages – a personal one to engage with friends and a second facebook fan page to cuild her professional contacts and further control her brand.  Advising team members to exercise the same caution, Teplitzky says she’s not afraid to ignore a friend request in order to maintain that distinction between the two personas.

But Warburg Realty president Frederick Peters disagreed with Teplitzky’s strict separation of the personal and the professional and, when done tactfully, said he feels it actually enhances the broker’s reputation.

Prudential Douglas Elliman executive vice president (and moderator of the panel) Corinne Pulitzer attested to that first-hand. After learning through social media that Peters is a baker, she said she grew more intrigued by him.

Cityrealty.com president Daniel Levy says finding the perfect balance of personal and professional often proves a high hurdle for social media users.

But in Peters’ case, he seems to have struck a chord with readers. Most active on the blogosphere, posting a new entry at least once a week, the number of direct hits on Peters’ blog has climbed at a rate of 10,000 every few months and his blog now attracts an average of 30,000 viewers per month.

Peters believes coupling professional information with personal anecdotes makes blogs successful, and that learning about personal tastes, hobbies and interests “actually deepens my interest in them.”

Halstead Property president Diane Ramirez applauds social media as “another tool in our arsenal” citing new agent websites, an online portfolio, dedicated staff operating twitter and facebook accounts and posting videos.

The one commonality among these tools is the opportunity to unveil personality.

Halstead may broadcast deals of the day, but the firm is leveraging social media to post about the economy, highlight a new shop or restaurant and reveal aspects of personality otherwise unknown to the client. Like it or not, Ramirez said, clients want to know more about the people who they do business with.

Panelists were in agreement that neglecting social media is a dangerous move in today’s digital age. Though firms and agents have embraced social media as the branding tool it has evolved into, deciding which tools to deploy and how much to expose poses some tough decisions.

Some of real estate’s brightest stress consistency in the message, avoiding overuse of too many social media apps and focus on your brand.

In regards to the personal versus professional, that’s a debate likely to play out over the next several months as more brokers tap into the new technology.

But whether one agrees with Teplitzky and Osher’s strategy of separation, or the comingling marketing of Ramirez and Peters, every broker should consider this, said Osher: “Transparency is a double-edged sword, because once it’s out there, perception is reality.”

 

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Insiders Outlook: Residential market comes dramatically back to life By Frederick Peters, President, Warburg Realty New York City’s real estate market came dramatically back to life during the first…... Read more >

Insiders Outlook:
Residential market comes dramatically back to life
By Frederick Peters, President, Warburg Realty

New York City’s real estate market came dramatically back to life during the first quarter of 2010. As buyers and sellers grew more in sync regarding value, absorption increased.  Demand outstripped supply in several areas of the market, fueling competitive bidding. Many of the areas of the city which were hardest hit during the recession, like Harlem and Williamsburg in Brooklyn, began to recover, seeing sales increase as developers reduced their prices to entice a customer base struggling with both less cash and less available financing. In many ways financing and its complications remain the biggest impediment to market recovery.

A word about the financing situation: as I noted in my last market update, the banks, regardless of loan size, tend to be using Fannie Mae and Freddie Mac guidelines to make their decisions. These guidelines, mostly fashioned for cash-strapped garden apartment complexes around the country, have little applicability in our very specific New York City marketplace. The requirement that associations (both condo and co-op) build a 10% contingency into their budgets lest some major piece of equipment fail, for example, simply is not relevant for most of our buildings, which have both the capability to assess and the capability to borrow against lines of credit which are almost always already in place. It is the same with some of the insurance requirements. And the decisions about which buildings are approved seem to vary not just from lender to lender but also from mortgage banker to mortgage banker and from week to week.

An additional problem results from the use of traveling appraisers. These appraisers, many coming from well outside the city, do not understand or account for the nuances of our market at all. Recently we had an appraiser mark down the price a buyer had agreed to pay for one of our developments in Harlem because he noted that “Harlem is a declining market.” One thing I can tell you with confidence, three months into 2010, is that Harlem is not a declining market. THAT news is eight months old. Similarly, an eight room property in the West 80s had been reduced by renovation to six larger rooms. The appraiser, also from out of town, comp’ed it against other six room apartments, therefore coming in with an appraised value several hundred thousand dollars below the agreed on price. The owner was compelled to accept a price reduction a month after the contract was signed if she did not want the buyer to walk away.

In spite of the perception of out of town appraisers, our market is NOT declining. In fact, the market has continued to improve through the first quarter of 2010 in virtually all segments. There do continue however to be differences in the rate of improvement based on both property size and location. And the two overall types of product which make up our marketplace, resale inventory and new development inventory, continue to behave quite differently. Let’s talk about resales first:

In the small apartment market inventory remains high. Studios, one bedrooms, and small two bedrooms are not experiencing much price appreciation, especially in the co-op market. There is still substantial depth of inventory east of Third Avenue on the Upper East Side and in Midtown, as well as in Harlem. Prices for these units have not appreciated in any significant way from the lows they experienced eight to ten months ago. However, absorption is improving, and these markets are approaching a tipping point past which prices may once again begin a modest rise.

Five to ten room apartments, especially on the Upper East and West Sides and in the Village, are enormously in demand and very few are coming to the market. The same is true for the mid-sized lofts in Tribeca, especially those in the older “real” loft buildings. Thus in the first quarter of the year we have seen a big uptick in competitive bidding, especially for particularly well located and well renovated product, with many deals made at or just above the asking prices. Sellers have become so much more realistic about value in the last year that buyers often make their offers within 85% to 90% of these prices, and then they may have to move up fast. The days of offering 25% or 30% below the asking price and waiting the seller out seem to be over.

While there continues to be little activity at the upper end of the market, there have been some landmark deals. A gutted 5,200 square foot condo high above Central Park recently sold for $33,000,000 – close to $6,000 per square foot. This deal is a testament to the continuing power of foreign buyers in our condo market. There have also been a number of co-op deals struck recently for $15,000,000 and above. While this market is also extremely low on inventory, the paralysis which held hostage throughout 2009 seems to be easing. There are buyers out there seeking big properties, they are frustrated about how little is available, and they are ready to act – but not to overpay!

Much has been written about the “shadow inventory” in the new development market: all of the units which developers couldn’t sell over the last eighteen months which were either rented or removed from the market. While this overhang does pose some threat to the improving health of the residential market, the danger is mitigated by the lack of construction currently underway. Over the next three years, the market will gradually absorb these units while, because of the loss of tax abatements for developers, as well as the change in the market and the lack of new build’able sites, the total inventory of units is unlikely to increase too much.

That being said, many new developments still carry substantial unsold inventory and realistic pricing is their only option for encouraging sales. Several projects have been repossessed by their lenders and the writing seems to be on the wall for a number of others. In such an environment, everything is negotiable. Of course, the closer a development gets to being sold out, the less negotiable the developer is likely to be. Absorption is improving, but the land of new development still remains a land of opportunity for the flexible buyer.

We anticipate a continuation of the same trends in the second quarter. Financing will be problematic. Buyers will continue to queue up for five to ten room apartments. The ultra luxury market will continue to improve and show increases in the number of transactions. And little by little, smart buyers will absorb the new development inventory at appropriate prices.

In this business there is no such thing as “business as usual,” but at least today we find ourselves back in a market we can understand.

 

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Should brokerages take a 'VOW' of privacy? While it's true that most brokers can't read minds, with a VOW they can come pretty close. Real estate pros say that VOWs, also known as "Virtual Office Web…... Read more >

Should brokerages take a 'VOW' of privacy?

While it's true that most brokers can't read minds, with a VOW they can come pretty close.

Real estate pros say that VOWs, also known as "Virtual Office Web sites," can give agents a backstage pass to their clients' predilections. VOWs allow buyers to view an agent's listings -- and those belonging to other brokerages -- all on the same Web page.

But VOWs present serious invasion of privacy issues and as a result can be a real turn-off to homebuyers, critics say.

VOWs can track your buying behaviors. For example, if a buyer tells a broker that she has a budget of $1.2 million, but the broker sees the buyer checking out $1.5 million listings on the company's VOW, the broker could potentially push the buyer to make a larger purchase than she had talked about.

New York City companies that have recently announced plans for VOWs include Prudential Douglas Elliman, Halstead Property, Elika Associates, A.C. Lawrence, the Real Estate Board of New York and CondoDomain, a new VOW-based brokerage company in the city. Manhattan got its first VOW, known as the CBS 2 Real Estate Market, last summer.

Found within the terms of service when a homebuyer registers to use a VOW are ground rules on what information the site can mine from you. While the privacy regulations can vary from site-to-site, most VOWs, including those powered by major shared information providers like Realplus Online Listing Exchange and On-Line Residential, the latter which introduced a new software product for brokerages to adopt VOW capabilities in March, allow brokers to track their clients' every move.

Some in the industry say VOWs go too far.

"Everything you do, every search you run, every listing you look at, all that is reported to the broker," Matt Daimler, an Internet entrepreneur and founder of recently-launched New York City real estate consumer site Buyfolio.com, said.

Indeed, in an instructional video for RealPlus, the system's state of the art analytics capabilities are touted to agents, emphasizing the range of information that the brokers can glean from their clients' activities.

"Whenever your client logs into your VOW and conducts a search, analytics is recording all their activity," the video says, adding for emphasis: "every activity your customer performs is recorded and available to you."

This activity, the video says, "reveals [buyers'] true buying criteria," not just the criteria they told you about.

Daimler's site, which he launched earlier this month, allows brokers and clients to communicate via a shared Web site without registration, something that he feels adds a greater level of privacy to the client's experience.

Although Daimler admits his gripes with VOW privacy could be based on competitive instinct, he said that as an observer of the VOW model, the platform's ability to track users' movements is nonetheless disturbing to him. He said that few buyers are aware of how much information brokers can learn about them through the VOW -- and those who do know are given no chance to opt out.

"The consumer has to have a choice to say 'yes, share that information,'" Daimler said. "It doesn't seem like a collaboration [between buyers and brokers] to me… it doesn't give you a choice."

In an ideal world, Daimler said that consumers would be better informed when they use a VOW.

"I think you need to have [a disclaimer] more front and center," Daimler said, "if you're going to monitor on that level."

While Frederick Peters, head of Warburg Realty, said that buyers should be held responsible for understanding the terms of the site their using, he does say that buyers might be turned off by a VOW's tracking abilities.

"I think one of the things people like about the Web is that feeling of anonymity," Peters said. "All of the data you register on a site is going to be used in some way."

Tom Croke, vice president of sales at RealPlus, said that his company tries to negate invasions of privacy by encouraging agents to educate their buyers about how the VOW is used.

"We think that it is [the] best policy for the agent to let the customer know… we don't want them to be spying," Croke said. "If [the buyer] finds out [the agent can track their searches] without the agent telling them, I can foresee that being a problem."

But buyers can access VOWs on their own, signing up for the service without the guidance and tutelage of a broker.

Even so, some in the industry feel that the onus is on the buyer alone.

Jonathan Greenspan, president of OLR, said that if buyers don't like being watched, they can leave.

"At some point it's the consumer's choice -- whether you're buying sweaters or hockey tickets, whether you want to register," Greenspan said. "It's no different than when you or I go to [any] site."

Greenspan said he believes that buyers need to accept the trade-off: what they're giving up in privacy, they're gaining in quality.

Buyers can say to themselves, "I know that these are all active, valuable listings, what am I giving up for that?" Greenspan explained.

Noah Rosenblatt, founder of brokerage and real estate research Web site UrbanDigs, echoed that sentiment, saying that the benefits outweigh the downsides.

"I don't see what the consumer is upset about," Rosenblatt said. "If you go on Google, Google can see everything you're doing."

Next month, his company is partnering with RealPlus to launch a real-time analytical platform to track Manhattan residential market trends, which The Real Deal reported yesterday.

Dottie Herman, CEO of Elliman, which is slated to unveil its $1 million revamped site complete with VOW capabilities this month, said that she'd like to see her clients have options when they use her brokerage's Web site.

"Frankly, the issue of privacy is a huge issue today," Herman said. "[Elliman's Web site] will be completely transparent… they can come to our Web site without registering, the consumer will be in control of what information [they share]."

Even so, Herman said that it's often difficult for buyers to navigate the minefield of privacy invasion when shopping for a home. She said that sites most people visit, like Google and Facebook, track users' movements to a greater degree.

"It has nothing to do with real estate -- it's the world we live in," Herman said.

 

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Brokerage Firm Refreshes Website to Highlight Social Media Capabilities Warburg Realty Partnership, one of New York’s oldest and most respected residential brokerage firms, recently unveiled an updated…... Read more >

Brokerage Firm Refreshes Website to Highlight Social Media Capabilities

Warburg Realty Partnership, one of New York’s oldest and most respected residential brokerage firms, recently unveiled an updated website embracing an extensive array of social media capabilities. The refreshed www.warburgrealty.com reflects the firm’s increased commitment to social networking, acknowledging the exponential growth of the on-line community.

“Real estate brokerage has always been about community building. Buyers and sellers rely on us to provide them with the most powerful and up-to-the minute tools,” said Frederick W. Peters, president of Warburg Realty. “Our website is crucial for both our clients and our agents. Our latest social media enhancements reinforce our position as a technology leader in the industry.”
     
The changes to www.warburgrealty.com include up-to-the-minute blog posts, Facebook status updates, and Twitter posts.
     
The website’s social networking capabilities compliment the recently-added Warburg AroundMe, which provides its exclusive property listings on the iPhone/iTouch, through a partnership with the popular AroundMe application.

Visitors will continue to utilize the “My Warburg” functionality, where buyers and sellers are able to create a personalized log-in. The saved search criteria allows Warburg customers the ability to receive real-time updates as new properties come on the market, add shared notes with their agent, and compare properties that match their saved search criteria. Through “My Warburg,” sellers have access to detailed statistical and marketing information on their properties, including recent print and online initiatives and internet hits.

Warburg’s site also contains simple and intuitive search functions including an interactive map, neighborhood breakdown, pricing and an entire list of additional criteria ranging from outdoor space to pet-friendly homes.  On the property detail page, buyers can view interactive floor plans that bring the residences to life through photographs correlating to the room layout.

Warburg’s site enables visitors to search for agents by name, specialty, or by one of the ten foreign languages spoken fluently by associates in the firm.  The resources section is true to its name, and provides a deep mine on information on the process of buying or selling a home in New York City. The page outlines closing costs, a full glossary of terms customers often encounter, and a detailed explanation of the process step-by-step. There is a complete neighborhood guide to Manhattan and Brooklyn, as well as a high-tech mortgage calculator allowing visitors to compare different financial scenarios

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REBNY Honors Warburg Realty's Frederick W. Peters at 114th Annual Banquet Posted By Susan Piperato, 01/22/10 NEW YORK, NY—Frederick W. Peters, President of Warburg Realty Partnership, was honored by…... Read more >

REBNY Honors Warburg Realty's Frederick W. Peters at 114th Annual Banquet

Posted By Susan Piperato, 01/22/10

NEW YORK, NY—Frederick W. Peters, President of Warburg Realty Partnership, was honored by the Real Estate Board of New York (REBNY) at the organization’s 114th Annual Banquet on January 21, 2010 at the New York Hilton. Peters received The Kenneth R. Gerrety Humanitarian Award, to recognize meritorious service to the community by a REBNY member.

Peters and his family have a long history of service in the New York community, and beyond. Frederick Warburg Peters is President of Warburg Realty Partnership, one of the oldest and most respected luxury residential brokerage firms in Manhattan. A graduate of Yale College with a Masters and extensive pre-doctoral work in music, Peters entered the real estate business as a residential agent in 1980. After working as a Manager at Albert B. Ashforth for a number of years in the late 80s, he acquired and renamed the 95-year-old firm in 1991.

During the past 15 years, Peters has expanded the company from 60 to 150 brokers and from one to three locations. Peters maintains a reputation as one of the most-quoted experts in the Manhattan residential real estate industry, whose dedication to the industry includes his involvement in The Real Estate Board of New York's Board of Directors - Residential Division, and as a member of the Executive Committee of REBNY's Board of Governors. This year, he was appointed Vice President, Residential Brokerage Division for REBNY’s 2010 Executive Committee. In 1996, he was the recipient of REBNY’s Henry Forster Award, a lifetime achievement and contribution-to-the-industry award.

Peters and his wife Alexandra have supported many diverse organizations, but the primary focus of their philanthropy has been humanitarian aid and music. During the 1980s and 1990s, when their own children were younger, several times a year they hosted children whose mothers were incarcerated at the Bedford Hills maximum security women's prison to ensure the children could spend time each day with their mothers. Later, their support of the humanitarian relief efforts of the International Rescue Committee, led them to open their home to Burmese refugees, some of whom today remain personal friends. Since 1980, Peters has served on the Board of the Caravan Institute, a small nonprofit organization dedicated to Italian language and the promotion of culture; he is now the Executive Secretary and Treasurer.
 
Between 1983 and 1989 he served on the Board of the Opera Ensemble of New York, a small opera company dedicated to the production of new American work. For the last four of those years he was Chairman. From 1991 until 2007 he served on the Board of the Glimmerglass Opera, the highly regarded company in Cooperstown, New York. He participated actively on two committees, Music Policy and Nominating, the latter as chair. Finally, and dearest to his heart, he has since 1993 been Board Chair of Meet the Composer, the largest composer and new music advocacy organization in the country. In this capacity he has been an ambassador for the organization at events around the country, worked with funders, and supported composers and recordings.

The Kenneth R. Gerrety Humanitarian Award celebrates the memory of Kenneth Gerrety who served with distinction as REBNY’s executive vice president for many years and gave valuable community service to his hometown of Garden City, NY.

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LAST NIGHT AT REBNY… There was no bitter cold, no biting wind, and no planes steering into the Hudson yesterday. We only hope this portends a better year for the real estate industry, which was all…... Read more >

LAST NIGHT AT REBNY…

There was no bitter cold, no biting wind, and no planes steering into the Hudson yesterday. We only hope this portends a better year for the real estate industry, which was all about survival in ’09. What we heard from many of the 2,000 attendees at REBNY’s 114th annual banquet last night were glimmers of hope in an uncertain market.
 
The packed—and quite noisy—Grand Ballroom. Last night’s honorees were Kramer Levin’s Sandy Lindenbaum (The Harry B. Helmsley Distinguished New Yorker Award); Vornado’s David Greenbaum (The Bernard H. Mendik Lifetime Leadership in Real Estate Award); Massey Knakal’s Bob Knakal (The Louis Smadbeck Broker Recognition Award); Paramount Group’s Ralph DiRuggiero (The George M. Brooker Management Executive of the Year Award); Warburg Realty Partnership’s Frederick Peters (The Kenneth R. Gerrety Humanitarian Award); and Swig Equities’ Todd Korren (The Young Real Estate Man of the Year Award).
 

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Fred Peters on bisnow.com We also met with Warburg Realty Partnership president Frederick Peters, who's receiving the Kenneth R. Gerrety Humanitarian Award. Did you know that before real estate, Fred…... Read more >

Fred Peters on bisnow.com

We also met with Warburg Realty Partnership president Frederick Peters, who's receiving the Kenneth R. Gerrety Humanitarian Award. Did you know that before real estate, Fred was a composer going for his doctorate in music composition? He’s been promoting the creation of new music for the past three decades and chairs Meet The Composer, an advocacy organization that creates opportunities and residencies for composers. On the real estate side, Warburg’s been focusing on next gen marketing, using social networking and blogs versus print advertising—tools that have been effectively increasing traffic for the firm, he says.
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Real Estate Weekly Would-be baseball stars, composers and star-crossed lovers ... People in the real estate industry are aware of the challenging deals under their belts, they know which boards they serve…... Read more >

Real Estate Weekly

Would-be baseball stars, composers and star-crossed lovers ...

People in the real estate industry are aware of the challenging deals under their belts, they know which boards they serve on, which charities they support, but Real Estate Weekly is pleased to offer the following little known anecdotes about the 2010 REBNY honorees.

For example, did you know the real estate industry has its own Andy Pettitte? From the pitcher’s mound to the sales pitches, Massey Knakal Realty Services chairman Bob Knakal nearly had a career in the major leagues. A coveted baseball player at Hackensack High School, in New Jersey, he received an invitation to try out for both the Philadelphia Phillies and Cincinnati Reds. Knakal ultimately landed in college, where he became an All-Ivy League pitcher at the University of Pennsylvania. Despite the institution’s storied baseball history – which dates back to 1867 – Knakal continues to hold the fourth best ranking on Penn’s all-time low ERA list. Knakal is receiving REBNY’s Louis Smadbeck Broker Recognition Award.

And while Knakal was impressing scouts on the pitcher’s mound, Warburg Realty’s Frederick Peters hit his own high notes with dreams of a career in music composition.

With his training as a composer, Peters was pursuing a PhD in music when he became a real estate agent in 1980. In his 20s with one child (and a second on the way) he entered the business to make some extra money on the side. But real estate consumed his life and though just shy of a dissertation, Peters put the doctoral program aside and, as he puts it, “unsuspectingly morphed from artist to business person.” Peters is receiving REBNY’s Kenneth R. Gerrety Humanitarian Award.

For honoree Ralph J. DiRuggiero, vice president of property management at Paramount Group, one might call him a bit of a historian. An avid reader, he immerses himself in historical fiction and history literature spanning New York City and San Francisco.

Other little known facts about DiRuggiero? His a California wine aficionado; he spends a great deal of time raising scholarship funds for his alma mater, the University of Scranton; and his favorite getaway with wife Susan and daughter Caitlin is the beaches of Deleware. He’s receiving REBNY’s George M. Brooker Management Executive of the Year Award.

And speaking of wives …
Kramer Levin Naftalis & Frankel counsel Samuel H. Lindenbaum – who will receive REBNY’s Harry B. Helmsley Distinguished New Yorker Award – has an interesting tale about how he met his. As a 17 year old counselor at a co-ed camp, Lindenbaum’s bunk was positioned next to the infirmary office. One day, another counselor asked him to call a doctor on the microphone because a girl had been hit in the head with a baseball. Letting curiosity get the best of him, he walked over to the bunk and there lay a “cute little blonde chick” in his bed. Said Lindenbaum, “So when people ask me how I met my wife of 52 years, Linda, I say: ‘she was in my bed.’

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GlobeStreet.com The Real Estate Board of New York, which will honor six of the industry’s leading figures at its annual banquet Thursday evening, has named three new members to its commercial board…... Read more >

GlobeStreet.com

The Real Estate Board of New York, which will honor six of the industry’s leading figures at its annual banquet Thursday evening, has named three new members to its commercial board of directors, which oversees the commercial brokerage division for REBNY. In separate elections, REBNY also appointed three new members to the commercial board.

The new board members include: Nicola M. Heryet, senior managing director with Colliers ABR, now part of Cassidy Turley; Augustus B. Field IV, EVP at Cushman & Wakefield; and Simon Ziff, president of Ackman-Ziff Real Estate Group. William Montana, senior managing director at Studley, is remaining as the chairman of the commercial board. Robert A. Nager, executive managing director for Murray Hill Properties’ retail leasing division, will similarly begin his second year as the vice chairman of the commercial board.

"Each of our new appointees will bring invaluable experience and knowledge, and we are pleased to have them join us on the board," says REBNY president Steven Spinola in a release. He adds that Montana and Nager have been "valuable assets" in their leadership capacities on the commercial board of last year.

On REBNY’s residential board of directors, new members include: Rebecca M. Mason, executive director of Caran Properties, Jeffrey Weisbord, principal of Jeffrey Weisbord Real Estate; and Hall Willkie, president of Brown Harris Stevens. Tresa Hall, EVP of the Corcoran Group, was elected member at large.

At its 114h annual banquet Thursday evening at the New York Hilton, REBNY will present David R. Greenbaum, president of Vornado Realty Trust’s New York office division, with its Bernard H. Mendik Lifetime Leadership in Real Estate Award. Other honorees include Samuel H. Lindenbaum, counsel at Kramer Levin Naftalis & Frankel LLP, who will receive the Harry B. Helmsley Distinguished New Yorker Award; Robert A. Knakal, chairman of Massey Knakal Realty Services and GlobeSt.com blogger, who will receive the Louis Smadbeck Broker Recognition Award; the Paramount Group’s Ralph K. DiRuggiero, recipient of the George M. Brooker Management Executive of the Year Award; Warburg Realty’s Frederick W. Peters, who will receive the Kenneth R. Gerrety Humanitarian Award of the Year Award; and this year’s Young Real Estate Man of the Year, Todd E. Korren of Swig Equities.

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New York Post January 21, 2010 THE KENNETH R. GERRETY HUMANITARIAN AWARD Frederick W. Peters, President, Warburg Realty Partnership Peters received his BA from Yale College and did a Masters and extensive…... Read more >

New York Post
January 21, 2010
THE KENNETH R. GERRETY HUMANITARIAN AWARD
Frederick W. Peters,
President, Warburg Realty Partnership

Peters received his BA from Yale College and did a Masters and extensive pre-doctoral work in music, leading to a job as a residential real estate agent in 1980. After working as a Manager at Albert B. Ashforth, he acquired and renamed the 95-year old firm in 1991. The company has since expanded from 60-150 agents in three locations.

He is on REBNY’s Board of Directors – Residential Division, and a member of the Executive Committee of REBNY’s Board of Governors. In 1996, he was the recipient of the Henry Forster Award.

Peters and his wife Alexandra have supported many diverse organizations, primarily humanitarian aid and music.

Since Peters joined the REBNY Residential Committee in 1987 he has worked with the Board to change and institutionalize almost every aspect of the way they do business. “Co-brokerage, representation transparency, settlement of disputes – all have been transformed by the Board and the relationships formed within it,” said Peters. “To put it simply, REBNY re-made the residential industry from a group of often hostile fiefdoms into a community.”

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REBNY HONORS WARBURG REALTY’S FREDERICK W. PETERS AT 114TH ANNUAL BANQUET  Frederick W. Peters, President of Warburg Realty Partnership, will be honored by the Real Estate Board of New York (REBNY)…... Read more >

REBNY HONORS WARBURG REALTY’S FREDERICK W. PETERS
AT 114TH ANNUAL BANQUET 

Frederick W. Peters, President of Warburg Realty Partnership, will be honored by the Real Estate Board of New York (REBNY) at the organization’s 114th Annual Banquet on January 21, 2010 at the New York Hilton. Mr. Peters will receive The Kenneth R. Gerrety Humanitarian Award, to recognize meritorious service to the community by a REBNY member.

Frederick and his family have a long history of service in the New York community, and beyond. A graduate of Yale College with a Masters and extensive pre-doctoral work in music, Frederick entered the real estate business as a residential agent in 1980. After working as a Manager at Albert B. Ashforth for a number of years in the late 80s, he acquired and renamed the 95-year old firm in 1991.

During the past fifteen years, Frederick has expanded the company from 60 to 150 brokers and from one to three locations. Frederick maintains a reputation as one of the most-quoted experts in the Manhattan residential real estate industry, whose dedication to the industry includes his involvement in The Real Estate Board of New York's Board of Directors - Residential Division, and as a member of the Executive Committee of REBNY's Board of Governors. This year, he was appointed Vice President, Residential Brokerage Division for REBNY’s 2010 Executive Committee.  In 1996, he was the recipient of REBNY’s Henry Forster Award, a lifetime achievement and contribution-to-the-industry award. 

Frederick and his wife Alexandra have supported many diverse organizations, but the primary focus of their philanthropy has been humanitarian aid and music. During the 1980s and 1990s, when their own children were younger, several times a year they hosted children whose mothers were incarcerated at the Bedford Hills maximum security women's prison to ensure the children could spend time each day with their mothers. Later, their support of the humanitarian relief efforts of the International Rescue Committee, led them to open their home to Burmese refugees, some of whom today remain personal friends. Since 1980, Frederick has served on the Board of the Caravan Institute, a small non-profit organization dedicated to Italian language and the promotion of culture; he is now the Executive Secretary and Treasurer.

Between 1983 and 1989 Frederick served on the Board of the Opera Ensemble of New York, a small opera company dedicated to the production of new American work. For the last four of those years he was Chairman. From 1991 until 2007 he served on the Board of the Glimmerglass Opera, the highly regarded company in Cooperstown, New York. He participated actively on two committees, Music Policy and Nominating, the latter as chair. Finally, and dearest to his heart, he has since 1993 been Board Chair of Meet the Composer, the largest composer and new music advocacy organization in the country. In this capacity he has been an ambassador for the organization at events around the country, worked with funders, and supported composers and recordings.

The Kenneth R. Gerrety Humanitarian Award celebrates the memory of Kenneth Gerrety who served with distinction as REBNY’s executive vice president for many years and gave valuable community service to his hometown of Garden City, New York.

 

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REBNY ANNOUNCES EXECUTIVE COMMITTEE CHANGES Frederick Peters of Warburg Realty becomes VP of Residential Brokerage Division Robert Knakal of Massey Knakal named VP for Commercial Brokerage Division NEW…... Read more >

REBNY ANNOUNCES EXECUTIVE COMMITTEE CHANGES

Frederick Peters of Warburg Realty becomes VP of
Residential Brokerage Division

Robert Knakal of Massey Knakal named VP for
Commercial Brokerage Division

NEW YORK, Jan. 6, 2010 – With the start of the New Year and with a new chairperson taking the helm, The Real Estate Board of New York (REBNY) recently announced changes to its 2010 Executive Committee.

Frederick W. Peters, president of Warburg Realty Partnership, has been named Vice President, Residential Brokerage Division. 

In addition, Robert A. Knakal, chairman of Massey Knakal Realty Services is now Vice President, Commercial Brokerage Division.

Other changes to the Executive Committee include the addition of David W. Levinson, chairman & CEO, L&L Holdings LLC, as a new Member at Large for 2010. Bruce A. Beal, Jr. executive vice president of Related Companies, is also a Member at Large for 2010.

Stephen Ross, CEO of Related Companies, who has served as REBNY Chairman since 2007, is now Chairperson Emeritus as Mary Ann Tighe, chief executive officer, New York Tri-State Region of CB Richard Ellis begins her tenure as REBNY Chairman this year.

“REBNY is pleased to have Fred Peters as the new vice president for the Residential Brokerage Division. Fred has been an active member of REBNY’s Board of Governors for many years, and is an influential member of the residential real estate community. In his new role as vice president, Fred will continue to be a vital part of REBNY’s governing body,” said Steven Spinola, REBNY president.

Mr. Spinola added, “I would like to congratulate Fred, as well as Bob Knakal, who we’re pleased to have as vice president for the Commercial Brokerage Division, and new Members at Large, David Levinson and Bruce Beal. Their counsel and industry expertise will be invaluable to the Executive Committee and will help lead the city’s real estate industry as we navigate these challenging times.”

Frederick Peters has served on REBNY’s Board of Governors since 1995. Robert Knakal has been a REBNY Governor since 2000. This is the first time each has been appointed to a title position on the Executive Committee.

“As we welcome our new chairman Mary Ann Tighe, we also bid farewell to Stephen Ross, who has played a major role in the creation and passage of many important federal programs that have been essential to the industry,” said Mr. Spinola. “He has worked with the City on efforts that will result in safer buildings and improved construction standards, among many other highlights of his tenure. We thank Steve Ross for his dedication and leadership over the last three years and we will continue to rely on his invaluable expertise as Chairperson Emeritus in the coming years.”

The Real Estate Board is made up of six divisions, each with its own Board of Directors: Commercial Brokerage Division, Residential Brokerage Division, Institutional Owners and Investors Division, Owners and Builders Division, Management Division, and Allied and Associate Division.  The Board of Governors, REBNY’s central governing body, is made up of representatives from each division.  The Executive Committee is composed of the officers of REBNY and other appointed Board of Governor members. Via its Executive Committee, the Board of Governors reviews recommendations regarding industry issues from REBNY's six divisions, Boards of Directors and standing committees and determines appropriate actions.

The Real Estate Board of New York is the city’s leading real estate trade association with more than 12,000 members. REBNY represents major commercial and residential property owners and builders, brokers and managers, banks, financial service companies, utilities, attorneys, architects, contractors and other individuals and institutions professionally interested in the City’s real estate.   REBNY is involved in crucial municipal matters including tax policy, city planning and zoning, rental conditions, land use policy, building codes and legislation.  In addition, REBNY publishes reports providing indicators of market prices for both the residential and commercial sectors.

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Last updated: January 6, 2010  12:36pm REBNY Adds Knakal, Peters to Exec Committee NEW YORK CITY—The Real Estate Board of New York is starting off the new year with several changes to its executive…... Read more >

Last updated: January 6, 2010  12:36pm

REBNY Adds Knakal, Peters to Exec Committee

NEW YORK CITY—The Real Estate Board of New York is starting off the new year with several changes to its executive committee. Frederick Peters, president of Warburg Realty Partnership, has been named VP of the residential brokerage division, while Robert Knakal, chairman of Massey Knakal Realty Services is now VP of the commercial brokerage division.

Additionally, David Levinson, chairman & CEO of L&L Holdings LLC, and EVP Bruce Beal of Related Cos. are members at large for this year. Related CEO Stephen Ross, who has served as REBNY chairman since 2007, is handing over the chairmanship to Mary Ann Tighe, CEO of the New York tri-state region at CB Richard Ellis. Ross assumes the title of chairperson emeritus at REBNY, according to a release.

Peters has served on REBNY’s board of governors since 1995, while Knakal has been a REBNY governor since 2000. The new appointments mark the first time either man has served on the association’s executive committee. In a release, Steven Spinola, president of REBNY, says the counsel and industry expertise of the new members “will be invaluable to the executive committee and will help lead the city’s real estate industry as we navigate these challenging times.”

REBNY is comprised of six divisions—commercial brokerage, residential brokerage, institutional owners and investors, owners and builders, management, and allied and associate—each with its own board of directors. The board of governors, REBNY’s central governing body, is made up of representatives from each division. The executive committee includes the officers of REBNY and other appointees from the board of governors.

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THE WALL STREET JOURNAL Peters, Knakal ascend at REBNY January 06, 2010 The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to…... Read more >

THE WALL STREET JOURNAL

Peters, Knakal ascend at REBNY
January 06, 2010

The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to the organization's executive committee as the vice president of the residential brokerage division. Meanwhile, Massey Knakal's Robert Knakal has been named vice president of the commercial brokerage division.

Peters has served on REBNY's Board of Governors since 1995 and Knakal since 2000, but this is the first time either of them has been appointed to a title position on the executive committee.

Other new members to the executive committee include David Levinson, the chairman and CEO of L&L Holding Company, and Bruce Beal, Jr., the executive vice president of Related Companies, who will serve as members at large for 2010.

The changes accompany the naming of new REBNY chairperson Mary Ann Tighe, the CEO of the New York Tri-State Region of CB Richard Ellis.

Stephen Ross, CEO of Related Companies, who had served as REBNY chairman since 2007, is now chairperson emeritus. TRD

 

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Peters, Knakal ascend at REBNY January 06, 2010 The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to the organization's executive…... Read more >

Peters, Knakal ascend at REBNY
January 06, 2010

The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to the organization's executive committee as the vice president of the residential brokerage division. Meanwhile, Massey Knakal's Robert Knakal has been named vice president of the commercial brokerage division.

Peters has served on REBNY's Board of Governors since 1995 and Knakal since 2000, but this is the first time either of them has been appointed to a title position on the executive committee.

Other new members to the executive committee include David Levinson, the chairman and CEO of L&L Holding Company, and Bruce Beal, Jr., the executive vice president of Related Companies, who will serve as members at large for 2010.

The changes accompany the naming of new REBNY chairperson Mary Ann Tighe, the CEO of the New York Tri-State Region of CB Richard Ellis.

Stephen Ross, CEO of Related Companies, who had served as REBNY chairman since 2007, is now chairperson emeritus. TRD

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Brokers Weekly Warburg has an eye on the future Warburg Realty Partnership, one of Manhattan’s oldest residential real estate companies, is proving its got its eye on the future with a new partnership…... Read more >

Brokers Weekly

Warburg has an eye on the future

Warburg Realty Partnership, one of Manhattan’s oldest residential real estate companies, is proving its got its eye on the future with a new partnership with the AroundMe iPhone application.

Warburg’s exclusive New York City listing information will be available to the over seven million global users who have downloaded the free AroundMe app.

“With today’s fast pace, technology enables us to multi-task in ways we never imagined,” said Frederick W. Peters, president of Warburg Realty. “As a firm, we strive to provide our customers with up-to-the-minute information and be a thought leader in the industry. The integration of Warburg into the AroundMe app allows us to provide real time real estate information through this widely used platform.”

AroundMe is one of Apple’s most frequently downloaded iPhone/iTouch apps. Utilizing GPS or WiFi, the app pinpoints the user’s location to find restaurants, coffee shops and popular neighborhood locales, wherever they are around the globe.

The Warburg integration allows AroundMe users to view live information about the firm’s nearby listings. Warburg’s listings, accessed through a list or map view, provide floor plans, photos, additional residence information and the agent’s contact information. Once a listing is selected, the user can retrieve the entire profile, and click through to Warburg’s web listing page.

AroundMe shows a complete list of all of the businesses in the category selected along with the distance from where the user is located. The selected listing is then displayed on a map and plots the route to the nearest address.

Fast, easy and accurate, AroundMe supports English, German, French, Italian, Swedish, Russian, Japanese and Portuguese languages.

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Wide, open Every once in a while a space comes up that gloriously defies the rules — like an open loft residence in a white-glove prewar co-op on the Upper East Side. You can buy this space as a 5,000-square-foot…... Read more >

Wide, open

Every once in a while a space comes up that gloriously defies the rules — like an open loft residence in a white-glove prewar co-op on the Upper East Side. You can buy this space as a 5,000-square-foot plain “white box” for $3.2 million or purchase it renovated for $5.9 million. The sellers of the sunny second-floor co-op at 180 E. 79th St. are child psychiatrist Harold Koplewicz and his wife, Linda Sirow, an artist and Dalton schoolteacher. Barbara Fox of Fox Residential Group and Frederick Peters of Warburg Realty have the listing.

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Among brokers, a resurgence of the old guard High-end pendulum swings back toward co-op deals and white-shoe brokers December 01, 2009 07:00AM By Candace Taylor Fascination with Manhattan high society…... Read more >

Among brokers, a resurgence of the old guard
High-end pendulum swings back toward co-op deals and white-shoe brokers December 01, 2009 07:00AM By Candace Taylor

Fascination with Manhattan high society has reached a fever pitch lately. The TV show "Gossip Girl" glamorizes the lives of pampered Upper East Side teenagers, complete with references to catered co-op board meetings and the Colony Club, while real-life New York socialites Amanda Hearst and Olivia Palermo are now feted as celebrities.

A similar phenomenon appears to be occurring in the world of Manhattan real estate. Suddenly, the priciest and most attention-grabbling listings in town are in the hands of well-heeled brokers like Southern belle Leighton Candler, Stribling's Kirk Henckels and the Clintons' broker Kathy Sloane, names heard less frequently during the boom years, as brash brokers like Dolly Lenz and Michael Shvo dominated the headlines.

But it's not just pop culture that's bringing about this shift.

Thanks to the real estate downturn, the current moment in New York City real estate is reminiscent of the days when a small, exclusive cabal of Upper East Side co-op brokers dominated the city's high-end market.

The Lehman Brothers crash largely halted sales of flashy new condos, while resales have continued to trade hands, albeit at lower prices. These days, many of the highest-priced sales are co-ops rather than condos, drawing attention to the small group of elite brokers who specialize in them.

"The loud, bling brokers of the condo era have been cut down a little bit, and the quiet, solid, I-didn't-make-my-money-in-the-last-five-minutes brokers have been enhanced by all of this," said Michael Gross, author of "740 Park: The Story of the World's Richest Apartment Building."

The importance of co-ops in the current market isn't just academic: The shift has palpable consequences for real estate agents trying to make a living in 2010.

Brokers accustomed to dealing in multimillion-dollar condos are finding that similarly priced co-op deals require considerably more skill, while the world of co-ops is less transparent and more dependent on social connections.

"Unless they went to school with someone who has an apartment on the market, or they're related to someone, or their parents live in a building where you're never usually given access, it's more difficult [to do deals] in the very fine buildings," said longtime broker A. Laurence Kaiser IV, the president of Park Avenue-based Key-Ventures Realty, who last month brokered the sale of a penthouse at 110 Central Park South for $10.5 million.

Still, there have been some significant changes since the days when legendary brokers like Edward Lee Cave and Alice Mason were the undisputed king and queen of Manhattan home sales. Real estate is now a big business, and huge, corporate firms like the Corcoran Group and Prudential Douglas Elliman have replaced the white-glove firms of old. These days, hard work and smarts trump everything -- even top-notch breeding.

"If you're brilliant and knowledgeable and people respect you, I don't care if your father was a cobbler,'" Kaiser said.

Selling via social status

Paul Purcell, head of the brokerage Charles Rutenberg Realty, recently founded a new Web site called Top

AgentGuide.com, which maintains a list of what it considers to be the city's best brokers.

He said he recently encountered a group of rookie agents who had never heard of Elliman's Lenz, the undeniable star of the real estate condo boom.

"I was talking to some young brokers, and I threw Dolly's name out, and they didn't know [her]," said Purcell. "The world is changing."

Though golden-blonde Lenz is still often in the public eye with regular appearances on CNBC, she has often made the headlines this year for losing listings (including mega-projects Manhattan House and Miraval Living) rather than selling them.

It's likely, however, that these young agents would have heard the names of two other blonde brokers: Corcoran's Candler and Sotheby's Serena Boardman (see "Park Avenue princess now top broker on Park").

Candler -- who made headlines for winning the listing of the late Brooke Astor's duplex at 778 Park Avenue -- is now listing penthouse co-ops at 1020 Fifth Avenue and 1040 Fifth Avenue, both priced north of $30 million. In August, Candler, the great-great-granddaughter of Coca-Cola Company founder Asa Candler, sold former Lehman Brothers chairman Dick Fuld's co-op at 640 Park for $25.87 million, one of the biggest sales of the year.

Boardman, meanwhile, was picked to sell Bernie Madoff's co-op at 133 East 64th Street.

Part of the reason these two brokers have been so successful recently, sources say, is their impeccable connections to polite Manhattan society.

Other society brokers who have made headlines recently include Brown Harris Stevens' Sloane, who's listing a co-op unit at 998 Fifth Avenue for $34 million; and Meredyth Smith, a senior vice president at Sotheby's International Realty, who, along with Boardman, has the city's most expensive listing, a townhouse at 22 East 71st Street. Henckels, who is married to socialite Fernanda Kellogg, recently took over the Astor apartment from Candler, and is also marketing an apartment once owned by Nelson Rockefeller at 810 Fifth Avenue for $27.5 million.

These brokers are similar in social status to the high-end brokers of the pre-condo era, when the world of Manhattan real estate was much smaller, and much more prim and proper. Back then, choosing a broker "was a very white-glove thing, where you chose a friend," Purcell said.

Cave and Mason (the latter known for her dinner parties) catered to the buyers of expensive real estate along Park and Fifth avenues, operating primarily through personal connections, with little need for advertising or self-promotion.

"We either know them socially, we went to school with them or we once were married to them," Cave once said of his clientele.

The new crowd

This clubby atmosphere began to change when condos came along, and the change accelerated during the recent building boom.

Suddenly, brokers could get rich quickly and easily, without having to worry about pleasing a co-op board.

As a result, there was "a rush of thousands of new brokers who came into the business at that time, who did not necessarily have the family ties to the 'right' co-op customers," said Michele Conte, sales director at the new Midtown condo Centurion, who previously worked at Brown Harris Stevens. "They just had great business and networking skills. A new breed of elite broker became recognized for hard work, not because of a prestigious family background."

Lenz is perhaps the best-known of this new breed of broker, building an empire of new condo sales and appearing in BlackBerry commercials. Then there is Corcoran's Dennis Mangone, who famously erected a billboard of himself above new condo 505 Greenwich Street, and Tel Aviv native Ilan Bracha, who by age 33 was the head of his own group at Elliman and founder of the development company B+B. Shvo became Elliman's top-grossing broker -- with over $300 million in sales -- while still in his late 20s, before forming his self-titled new development marketing firm.

The defining characteristic of that era was that "someone [could] come from a foreign country, knowing no one in New York, and be successful," Purcell said. "Shvo didn't know anybody, and he created a viable business. There was room for new brokers, upstarts, people who wanted to work hard. Prior to that, it was very hard for them to get a leg up in the industry."

Small, boutique firms began to fall by the wayside.

Edward Lee Cave was absorbed into Brown Harris Stevens, Mason closed her office after losing several of her top agents, and the industry was largely dominated by giant firms with well-maintained Web sites and large marketing budgets.

Around that time, Shvo told the writer Steven Gaines: "Do you think a 38-year-old partner in Goldman Sachs who makes $8 million a year knows who Alice Mason or Edward Lee Cave is? You know what? They're all going to drop dead soon. I'm the new generation of real estate broker."

Many of these new brokers didn't bother with co-ops, and likely would have found those doors closed to them if they tried. But with so much business to go around, it didn't matter.

Condos fall out of fashion

When the credit crisis hit, buyers did an about-face. Suddenly co-ops were more in vogue as new development condos fell out of favor, in part because obtaining mortgages in partially sold buildings became all but impossible.

Co-ops' requirements for large down payments and post-closing liquid assets, viewed as hindrances during the boom, are now widely credited with helping to insulate New York from the high foreclosure rates that are dogging the rest of the country.

Moreover, the boom had seen the sellout of some very expensive new luxury condominiums, including 15 Central Park West and the Plaza. Now those deals have closed, and there are very few new developments coming online; that means more of the attention-grabbing new listings are townhouses or co-ops.

"Basically, you're not seeing as many of those huge, high-[priced] condo deals," said one broker. "There is more focus on the high-end co-ops, just because a lot of the condos have sold."

There are still some very expensive condo sales occurring, of course, but many of them are deeply discounted resales, like the June sale of a $37.5 million apartment at the Time Warner Center, down from its original asking price of $49 million.

The co-op club

The same factors that have buoyed high-society brokers to their current level of prominence are now making it harder for the Mangones and Brachas of the world -- and their lesser-known colleagues -- to succeed.

"The kind of people who sell new condos are not necessarily going to be the kind of people who know the ins and outs of the most exclusive co-ops," Gross said. "Those two products couldn't be further apart. It's not even apples and oranges, it's raspberries and watermelons."

It's not easy for agents who previously specialized in new condos to transition to co-ops. For one thing, it's simply harder to buy and sell co-ops, thanks to their gatekeepers: notoriously fussy co-op boards.

"It has always been harder for brokers to learn, and to play, the co-op game," said Centurion's Conte. "The co-op broker must decide which co-ops to show the buyer, and which ones to avoid, based on knowledge of the buyer and the board. That takes a great deal of finesse."

Frederick Warburg Peters, president of Warburg Realty Partnership, said managers at his firm carefully train new agents in the art of crafting board packages.

"In terms of boards, there's no substitute for experience," Peters said.

Moreover, top co-op brokers tend to be a tightly knit group who prefer to work together, making it harder for outsiders to do deals with them.

"If a broker calls me and says they want to show at 834 Fifth or 960 [Fifth Avenue] or whatever else, in one minute I know by the broker if I have to ask them for the qualifications of the customer," Kaiser said. "With [some] people, you certainly do, because [they] don't know what's going on."

It's not impossible for a new agent to break in, but it's "certainly easier" if that agent already has co-op contacts, he said.

"There's always room for a newcomer, but they'd better have access to the club," Kaiser said, only half-jokingly.

Another difference is that co-op boards and customers prefer their brokers to be discreet, keeping deals out of the newspaper whenever possible. That runs contrary to the way many of the top condo brokers made names for themselves during the boom.

"The aggressive condo broker is going to want his name in the papers all the time," Gross said. "The subtle, social broker is going to operate in a very different way."

Condo brokers have reacted to the new climate in different ways. Some have been able to adapt; Lenz told The Real Deal that about 50 percent of her deals are now co-ops, and she still has a number of new development condo projects, like the Apthorp on the Upper West Side.

"She built such a thriving business on that side that everybody wanted her on the other side," Purcell said.

Others have stepped away from traditional brokerage. Elliman brokers Meir "Mickey" Roth and Lenny Sporn, former members of the Bracha Group, left last month to start a new real estate company that specializes in purchase groups of international buyers.

Still, brokers say all is not lost for newer agents, if they are hard-working and skilled.

"In the end, you can know an awful lot of people, but if you don't look like you're going to do a good job for them, they aren't going to hire you," said Peters.

Board packages in particular are "a question of being thorough and precise," said Amanda Brainerd, an executive managing director at Warburg Realty, who went to the Upper East Side's Nightingale-Bamford School and then to Harvard. She said she views society connections as "a nonissue."

"I've seen some very famous brokers do terrible packages," she said.

 

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New York Could See a Double Dip in Residential Market Some experts predict a second slide of home prices in the city November 2009—By Alison Gregor While prices and sales activity have picked up in…... Read more >

New York Could See a Double Dip in Residential Market

Some experts predict a second slide of home prices in the city

November 2009—By Alison Gregor

While prices and sales activity have picked up in New York in the last couple of months, a number of analysts are predicting a second round to the downturn here, with prices likely to fall. Estimates range from a drop of a few percentage points to up to 17 percent.

Barry Ritholtz, the New York-based CEO and director of equity research at Fusion IQ, an online quantitative research firm, noted that "there's still some downside to prices" in New York.

"The good news is, the worst of the bloodbath is probably behind us in terms of falling prices," he said. "The bad news is, unemployment continues to tick up and foreclosures continue to ramp up. I do not think New York is at a bottom quite yet."

Financial analysis firm Fiserv predicted last month that the New York City metro area will underperform the nation as a whole over the next two years, with prices falling another 17.4 percent by June 2011.

The biggest problem New York is facing is unemployment. According to the state Comptroller's office, the city shed 115,700 jobs as of June and is expected to hit 328,000 jobs losses -- 47,000 of them in the securities industry -- by the third quarter of 2010, boosting an unemployment rate that has already hit 10.3 percent.

Jonathan Miller, the president of appraisal firm Miller Samuel, said there has never been an economic recovery in New York at the same time that the finance sector was suffering.

"Employment on Wall Street in New York City is still falling," he noted. "There has not been an economic recovery in New York City, ever, when Wall Street employment was declining -- even factoring in bonuses."

Miller also noted that one factor behind the recent reported uptick in Manhattan activity -- sales jumped 45.6 percent in the third quarter compared to the second quarter, while the median price rose 1.7 percent in the same time -- is seasonality.

"Though [prices are] adjusted for seasonality … I still think seasonality is playing a role," he said.

With Manhattan prices already off roughly 20 percent from their peak, Miller predicted either mild housing-price erosion of a few percentage points or, at best, a few years of "moving sideways," which would mean flat prices.

Meanwhile, there are also homeowners in New York City, mostly in the outer boroughs, who have been able to hang on until now, but, like their counterparts nationally, are expected to default on their mortgages and see their properties go into foreclosure. More foreclosures tend to increase sales activity, but also put downward pressure on real estate prices, Miller said.

About 11.6 percent of mortgage borrowers in the New York City area are underwater, according to data from Deutsche Bank. And, as The Real Deal has reported, a recent report by the bank offers a dire prediction that 77 percent of borrowers with outstanding mortgages in the New York City area will be underwater by the first quarter of 2011, well above the bank's projected national average of 43 percent.

Nationally, some of the more bearish economists predict a round two on the recession in housing prices as well.

At The Real Deal's annual forum last month, leading economist Nouriel Roubini said he expects home prices to fall another 7 to 10 percent nationwide over the next year. Roubini, who has been called Dr. Doom for his dire (and largely accurate) forecasts, predicted an extended recession or "U-shaped" recovery, and said there might even be a "W-shaped" recovery, meaning that there could be a second financial crisis ahead.

Fiserv predicts an additional national price drop of 11.3 percent by June 2010.

Other analysts predict that the number of foreclosures -- which as of September had been up for 43 straight months -- will continue to increase through 2010.

"Prices will resume declining again early next year," predicted Mark Zandi, the chief economist of Moody's Economy.com. "The bulk of the price declines are over, but I think we've got another 5 or 10 percent to go. The principal reason for that is a pick-up in foreclosure sales early next year."

The loan modification program created by President Obama, which has taken loan servicers a while to figure out and apply to qualified homeowners, has simply delayed pushing other homeowners through the foreclosure process to sale, Zandi said.

"As the loan servicers figure out who's qualified, they'll resume pushing loans through, and those foreclosure sales will pick up again," he said.

Real estate experts point to rising national loan delinquency rates as an indication that foreclosures will grow. For instance, the serious delinquency rate on homes backed or held by Fannie Mae, the government-backed mortgage finance behemoth, topped 4 percent in July for the first time in history.

The possibility that today's historically low interest rates might rise is also a cause for concern. The federal government has prompted homebuyer activity by keeping interest rates artificially low, primarily by purchasing more than a trillion dollars of undesirable securities through Fannie and Freddie. Those purchases will continue through March 2010, Zandi said.

"If the government ends its commitment at that point in time and doesn't continue to buy, then mortgage rates will rise more quickly," he said.

Miller agreed, saying, "Who's going to buy those securities? If banks have a hard time selling them to investors, that means mortgage rates are going to go up."

That rise in the cost of money, experts said, should place additional stress on the housing market as well.

Though he's not predicting a second financial crisis like Roubini, Ritholtz predicted a "W" shape to the housing market's recovery, since markets tend to overcorrect in recovery.

"I wouldn't be surprised to see homes continue to get cheaper over the next two to three years," he said. "Although it won't be the 25 to 30 percent drops we've seen so far, there's probably another 5 or 10 percent ... to go in some regions," including New York. And up to 15 percent in some parts of the country, he said.

Still, the exact timing and extent of the home price contraction is difficult to predict, he said. Much of the discussion about national housing prices doesn't necessarily apply to Manhattan or brownstone Brooklyn, for various reasons, said Frederick Peters, the president of Warburg Realty Partnership, the Manhattan-based brokerage.

For instance, Manhattan and brownstone Brooklyn have not suffered from a high rate of foreclosures, primarily due to residents taking out fewer of the Alt-A and exotic home mortgages, but also due to the rigorous process used by co-op boards to assess potential buyers, Peters said.

Peters said he anticipates that Manhattan and brownstone Brooklyn will hold onto the price gains seen in the last quarter -- barring an unforeseen calamity, such as another large round of layoffs in the financial sector. Peters said he expects prices to remain flat for the next three to six months. He resisted predicting beyond that.

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Killing deals to protect property values is risky business We've always thought it sounded dubious for a co-op board to turn down a sale because the price was too low, and we've wondered whether it's…... Read more >

Killing deals to protect property values is risky business

We've always thought it sounded dubious for a co-op board to turn down a sale because the price was too low, and we've wondered whether it's legally defensible.

Apparently, it depends on who’s complaining.

According to an article in last week's New York Law Journal, courts generally put the kabosh on the practice when sellers sue, on the grounds that price-based turndowns are an unreasonable restraint on an owner's right to transfer shares.  But because co-op boards don’t owe a fiduciary duty to buyers, disgruntled buyers are out of luck.

The article’s authors—a pair of well-known condo & co-op attorneys from the law firm of Stroock & Stroock & Lavan—suggest some alternatives for boards concerned that the sales price that doesn’t reflect the value of a typical apartment and will depress future sales in the building. (A downloadable copy of the article is available here on Stroock's web site.)

One option is for a co-op board to peg the turndown on something else: Finances, credit rating, litigation history, personal impressions from an interview or application, and bad references are all legitimate reasons to kill a deal.

Another alternative is to green-light the sale but try to make sure that later buyers understand why the apartment sold below market:

“Presumably, if a subsequent purchaser knows the circumstances surrounding a below-market sale, that sale should not affect the price of a later sale, so long as the physical conditions of the units are different. Therefore, if a board develops a reliable mechanism to memorialize the reason for a below-market sale, it should not need to use floor price to disallow an apartment sale.” 

Curious about what form the ‘reliable mechanism’ might take, we asked Eva Talel, one of the article’s co-authors.

“Many buildings maintain a list of their sales for appraisers, and if they don’t, they should,” says Talel.

“You put an asterisk next to the apartment and explain that it was an atypical transaction because it was an estate sale or in very poor condition,” she explains, noting that it’s usually the managing agent’s responsibility to maintain a transfer history list. 

“This is also very, very critically important for refinancing mortgages—if an appraiser isn’t aware of the reasons 5C sold at very low price compared to 6C, they’re going to look at that number as the last transfer,” says Talel.

To get the brokerage community's perspective, we checked in with Frederick Peters, the president of Warburg Realty.

He notes that most buyers these days get price histories from StreetEasy.com and tend to assume that sales prices accurately reflect market values “no matter what you say” to the contrary.

But the bigger problem, he says, is price-related turndowns usually happen because the board is out of sync with reality, not because the price is out of sync with the market. 

“There have been a number of what we perceive as price-related turndowns since Jan. 1, but in fact the prices were market driven,” says Peters. “The board members were simply behind in their understanding of how great the drop in values had been.  Most boards, like most sellers, believe their building is ‘different.’”

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Inside Real Estate Condo Lending Restrictions, Aimed At Lowering Risk By KATHLEEN DOLER, FOR INVESTOR'S BUSINESS DAILYPosted 08/27/2009 06:17 PM ET Despite steep price cuts, selling problems plague condominiums…... Read more >

Inside Real Estate
Condo Lending Restrictions, Aimed At Lowering Risk
By KATHLEEN DOLER, FOR INVESTOR'S BUSINESS DAILYPosted 08/27/2009 06:17 PM ET

Despite steep price cuts, selling problems plague condominiums in the nascent rebound of residential real estate.

Lenders are scrutinizing condo complexes and their homeowner associations like never before, real estate agents say, making it especially hard to get a condo mortgage.

Without lending, condos sit unsold — with some going into foreclosure — or they sell to investors, who sometimes buy in bulk and typically rent out the units. But banks and mortgage backers don't like to lend into complexes with too many rentals or foreclosures, on account of risk. And so the proverbial vicious circle spins.

"Anyone with a pulse could get financing a couple of years ago; now no one can get financing," said Frederick Warburg Peters, president of Warburg Realty Partnership in New York. "The refusal of banks to loan to appropriate people buying in appropriate buildings just inhibits the recovery of the marketplace."

The supply of condos for sale stretched out a bloated 15.1 months in July, National Association of Realtors data show, compared with 8.6 months for single-family homes. The median condo price was down 18.9% from a year ago, vs. 14.6% for single-family homes, though sales of both picked up.

Condo lending rules tightened in January and again in March. They aimed to ensure that only high-quality loans would be packaged into securities, to avoid the kind of mortgage-market collapse that kicked off the housing crisis.

Prior to March 1, 51% of condos in a new complex had to be pre-sold for Fannie Mae (FNM) or Freddie Mac (FRE) to back a condo loan. Then, the percentage was upped significantly to 70%.

No 'Easy Street' Now

Legislators and Realtor associations have been trying, so far unsuccessfully, to get condo lending standards loosened. In June, Reps. Barney Frank, D.-Mass., and Anthony Weiner, D.-N.Y., wrote a letter to Fannie and Freddie saying that the 70% sales threshold "may be too onerous." They asked for "appropriate adjustments" to the condo underwriting standards.

This month Steve Goddard, president-elect of the California Association of Realtors, was scheduled to meet with representatives of Fannie Mae to talk over Fannie's condo restrictions.

Goddard says the lack of lending is devaluing condos further and hurting homeowners and lenders.

"By making it more difficult to sell a condo ... property values continue to go down on for-sale condos," he said.

"Fifty percent sold is a successful new project, especially in an existing neighborhood," said Michael Slattery, senior vice president of the Real Estate Board of New York.

A few lenders will loan on condos and keep the loans in their own portfolios. However, experts say to get these loans buyers must have a huge down payment, as much as 40%, perfect credit and often a relationship with the lending bank.

Goddard and other real estate professionals also say that Fannie and Freddie agency rules on condo lending are not very well understood, and are a moving target. Exceptions to the 70% rule exist — developers can apply for one, but many don't know that, says David Crowe, chief economist at the National Association of Home Builders.

Here are some rules Fannie and Freddie require if a lender seeks government backing for a condo loan:

• Owner-occupancy must be 51% or more throughout the complex.

• At least 70% of units must be pre-sold, in a new complex.

• Approval is required by Fannie's Project Eligibility Review Service, in a new complex.

• Condo association dues can be late for no more than 15% of unit owners.

• No more than 10% of units can be owned by a single investor, individual or firm.

• A minimum 25% down is needed for a condo loan. Otherwise buyers must pay closing-cost fees equal to 0.75% of the loan, regardless of credit score, under new rules that began in April.

Red Tape Leaves Mark

Overbuilding caused some of the pain now being felt in the condo market in the Sunbelt. And condos are often more difficult to sell than single-family homes, due to condo association restrictions and high dues.

But tight lending skews the market to investors, who have cash. If they buy in bulk, that can cause a complex to be unable to meet the 51%-or-higher owner-occupancy rule and the rule about no more than 10% of units being owned by a single entity.

"We're just getting overwhelmed with big groups," said Peter Zalewski, a principal with the consulting firm Condo Vultures, which operates in Florida helping investors find and buy properties.

"We're very happy with the current policies by Fannie and Freddie," he said. With those policies in place, "often the only savior for a condo developer is a bulk buyer."

Zalewski says that in recent months, a number of bulk Miami condo sales have gone for well under current construction costs.

More Changes Coming

Condo lending is about to get even tighter. On Oct. 1, the Federal Housing Administration's spot-loan approval process for condos will be eliminated. After that, condo projects will have to go through a stricter Housing and Urban Development approval process in order for FHA-insured financing to be available .

"The FHA is tightening its guidelines to match some of Fannie's guidelines," said Grant Stern, president of Morningside Mortgage, in Bay Harbor Island, Fla.

He'll be working with developers and others, he says, to get their condo complexes through the new HUD review process.

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Gotta Move, Gotta Sell By TERI KARUSH ROGERS Published: July 17, 2009 AS most New York City homeowners hunker bearishly inside their largest depreciating asset, one unfortunate contingent has no choice…... Read more >

Gotta Move, Gotta Sell
By TERI KARUSH ROGERS
Published: July 17, 2009

AS most New York City homeowners hunker bearishly inside their largest depreciating asset, one unfortunate contingent has no choice but to wade into the storm-tossed market. For these accidental sellers, life has gotten in the way — in the form of a job upheaval, imminent offspring, holy matrimony or the dissolution thereof.

Involuntarily thrust onto the catwalk, many are now stranded there, unable to unload their homes, even at a loss. Those who do sell are finding it takes longer: Figures for the most recent quarter show that it took Manhattan apartments nearly five and a half months to find a buyer, 20 percent longer than at the same time last year, according to Miller Samuel, an appraisal firm.

“The world has changed,” said Frederick W. Peters, the president of Warburg Realty. “In a market like this, I can’t guarantee a quick sale at any price.”

Meanwhile, sellers unprepared for the new reality watch helplessly, and with no small shock.

“You take personally the series of people who fail to buy your property, which is like saying that your child is homely,” Mr. Peters said. “And on top of that, you also have urgency. It’s incredibly stressful. Depression and anxiety usually go along with that.”

Just ask Adam Rogers, 45, a United Nations spokesman, who only a year ago thought he had it made when he was transferred to Switzerland from New York.

Until then, Mr. Rogers, his wife, Gillian, and their two small children had been comfortably ensconced in a four-bedroom, 2,000-square-foot condo in Clinton Hill, Brooklyn. The couple bought it for $599,000 in cash in January 2006, after selling the Hell’s Kitchen apartment they had outgrown for $920,000 at the height of the market, and pocketing a profit that was three times what they had paid.

They hoped to make a similar killing by buying into another gentrifying neighborhood.

“I used what I called the Starbucks index,” Mr. Rogers said. “There were no Starbucks around in Hell’s Kitchen when I bought there, and when I sold there were four. There were no Starbucks here either when I bought.”

With no mortgage to pay, a common charge of only $249 a month and abated real estate taxes, the family could easily afford life on Mr. Rogers’s U.N. salary and Ms. Rogers’s income as a freelance publicist.

Then, a little over a year ago, his job was reclassified into a category that required him to relocate at regular intervals. Bidding for a position abroad, he won a coveted spot as the spokesman for the U.N.’s Development Program in Western Europe in Geneva.

“I had always wanted to live there,” he said. “I thought I was sitting pretty. Everything happened like clockwork, except I was a little too optimistic about the apartment.”

Late last summer the couple decided to rent out the apartment, in case they returned to the United States after Mr. Rogers’s five-year rotation abroad. They listed it at $3,600 a month.

But the rental house they found in Geneva cost $5,000 a month, and other expenses mounted, even as the renter they had counted on failed to materialize. When it became clear that they would have to tap into equity, the Rogerses decided in August to put the apartment up for sale.

“There’s a higher cost of living over there, and the house was a bigger space, so I bought new furniture,” Mr. Rogers said. “Because I was very optimistic the apartment would sell, I probably wasn’t as frugal as I could have been.”

At first the Rogerses asked $679,000, the price at which their neighbor had sold his apartment.

They have since cut the price several times and switched agents; they are now working with Anne Buckley of Fillmore Real Estate in Fort Greene, Brooklyn. The apartment is listed at $599,000; they will lose about $60,000 in transaction costs if it sells at that price.

So far, the couple have had no offers. The only potential renters were four roommates from nearby Pratt Institute, whom Mr. Rogers turned away because he knew that the condo board — stung by student renters before — would never approve the sublet.

He has been using credit cards to finance part of his new life abroad.

“The first six months I didn’t spend much time thinking about it,” said Mr. Rogers, who with his family was on a trip back to New York, staying in the barren apartment on borrowed mattresses.

“I started getting worried in January. I’ve maxed out all my credit cards. Right now we’re stuck at Hertz for two hours trying to rent a car because none of the credit cards work — the wire transfer I made before we left apparently has a delay of several days.”

He says he feels the financial stress affecting him, but struggles to hide it.

“I take a lot of long walks through the mountains and try to stay optimistic.”

His wife, Gillian, says she too feels the strain, especially living in a city where hamburgers can cost $45 and her son’s back-to-school clothes cost three or four times more than back home. She hopes to find some freelance publicity work abroad to supplement their income.

In the meantime, she said, living frugally comes naturally to her, and she tries to keep the rest in perspective: “I look around the world and realize it obviously could be somewhat worse.”

While many accidental sellers are forced into the market for job-related reasons, others are led afoul by the stork.

“Right now, we might put the baby in the closet,” said Elizabeth Demaray, 41, of the compromise she and her husband, Hugo Bastidas, 51, may be forced to make when their first child arrives next month. “The closet is 54 inches wide and the crib is 53 7/8 inches wide. I just need to find an itty-bitty changing table.”

Last year, Ms. Demaray, a sculptor and assistant art professor, and Mr. Bastidas, a painter and art professor, moved to East 116th Street near Lenox Avenue, to a two-bedroom condominium that he also uses as an art studio.

But the 1,200-square-foot space is not big enough for the couple, his canvases, a baby and an exceptionally vocal Bengal cat that must be sequestered in its own bedroom at night if the humans are to sleep.

Mr. Bastidas paid $620,000 for the condo in February 2007. The couple listed it early this spring for $715,000 with Karen Shenker, an associate broker at Corcoran. The asking price was about what comparable units in the building, which has been LEED certified, had sold for. There have been no offers.

“If we wind up staying, we’re going to have to find a studio space for both of us, probably somewhere toward Lower Manhattan or possibly Jersey City,” Ms. Demaray said. “But the cat won’t work in the closet.”

Still, many parents would agree that a baby in the closet is better than two colicky mortgages demanding to be paid at once. That is the unhappy situation of a couple of other parents-to-be, Jon Vernon-Browne and Adriana Herrera.

Days away from the birth of their first child, the couple are living in a newly purchased five-bedroom house in North Caldwell, N.J., while carrying the two-bedroom downtown condo that Mr. Vernon-Browne, 41, an information technology manager, bought for $1 million in February 2007, before he became seriously involved with Ms. Herrera.

It wasn’t until they married and were expecting a child that they realized they would be better off in New Jersey, close to Ms. Herrera’s job and her parents.

At first they planned to rent out the condo at 15 Broad Street (a k a Downtown by Philippe Starck) to wait out the down market, hoping to get $4,300 a month. But their broker helped them understand that because they were taking out a substantial mortgage on their house, they might need the equity from the condo for peace of mind.

They listed it in May for $1.1 million, and have had one low-ball offer, which they rejected. In the meantime, they closed on a $1.05 million house in New Jersey, so that they would be settled before the baby’s arrival.

“There are a lot of feelings going around at the moment,” Mr. Vernon-Browne said. “We are excited about the arrival of our first kid. But we are feeling pretty stressed out about preparing for that, moving to a new house and having a double mortgage.”

He said they were losing $1,000 to $1,500 per month carrying both properties.

“We’ve definitely become a bit more desperate,” said Mr. Vernon-Browne, who may consider a short-term rental at this point.

Nicole and Charles Poliacof are newlyweds and no longer need his and hers apartments. She owns her place and he rents, but as she says, “If my husband and I lived together in my studio, we would be divorced.”

So, Nicole, 31, and Charles, 39, live in his one-bedroom $4,170-per-month apartment on the Upper East Side. They have been trying to sell her nearby property since May.

So far, the 600-square-foot postwar apartment — listed at $410,000 with Shirley Morris and Barbara Blumberg at Corcoran — has received no offers.

The subway construction project outside Ms. Poliacof’s building on Second Avenue and 69th Street isn’t helping. “Unfortunately, there are dug-up sidewalks right there,” she said, “and the unknown construction time frames of the M.T.A. have caused some uncertainty.”

The extra carrying costs of the studio are around $2,100 a month, she said. While it’s doable for a while, she said, some lifestyle changes may be necessary come fall. Meanwhile, the couple’s plan to shop for a two-bedroom apartment in which to start a family is on indefinite hold.

“We may readjust our price soon,” Ms. Poliacof said. “Another option is pursuing a renter, though it’s a challenge to go through the co-op board. But it would definitely put us at ease.”

Couples at the unraveling end of a marriage are also finding that the market is aggravating an already difficult situation.

“When people are getting divorced, a physical separation is equally important,” said Julie Friedman, an executive vice president at Bellmarc.

A lingering denouement is no good for anyone.

“Often the parties can’t decide how to market the apartment, and all the contact is through the attorneys, which adds up to extraneous legal fees,” said Ms. Friedman, who has watched the slowing market throw a wrench into more than one client’s divorce proceeding. “Adjustments in price strategy and marketing strategy, open house schedules — everyone feels the need to add their mark or perspective. It makes things bitter and acrimonious.”

The situation is different when it is propelled by a happy event.

Danielle Dugan, 34, a derivatives-assistant-turned-yoga-instructor, is seven months pregnant with her first child, and would like to sell her one-bedroom Brooklyn Heights co-op by the time the baby arrives in September.

The apartment is a fifth-floor walk-up.

“I’m really fit because of my occupation,” Ms. Dugan said, “and my husband happens to be naturally fit. I don’t see the stairs as a huge problem now, but it’s definitely a factor when you add in me, the baby, groceries and laundry.”

Ms. Dugan, who bought the apartment in 2006 when she was single, listed it in April for $357,000, with Eve Levine, an agent at Corcoran.

“I got pregnant in December and we thought about moving for a while,” she said, “but I guess we were processing the pregnancy first, because it was a surprise.” The only offer thus far has been a low bid from a buyer unwilling to negotiate or put more than 10 percent down. Ms. Dugan recently dropped the price of the apartment to $340,000.

“We’re pretty confident that it will sell eventually to the right buyer, probably someone who was single like I was when I bought it,” she said. “We’re just going to stay and deal with it until we sell it. No one’s really worried about me and I’m not either.”

She says it helps that a lot of her friends in the neighborhood are raising young children in less-than-perfect living arrangements.

“We know a lot of people in their mid-30s who are still getting established,” she said. “So this doesn’t impair my joy. It was a decision for me to pick quality of life and happiness over making a lot of money. It just is what it is and there’s nothing I can really do to change it.”

 

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Saunders & Associates Teams With Warburg Realty In Strategic Alliance Bridgehampton - Saunders & Associates, a leading brokerage firm based in Bridgehampton, and Warburg Realty Partnership, one…... Read more >

Saunders & Associates Teams With Warburg Realty In Strategic Alliance

Bridgehampton - Saunders & Associates, a leading brokerage firm based in Bridgehampton, and Warburg Realty Partnership, one of Manhattan's oldest and most respected residential real estate firms, report to have formed a strategic alliance to "further enhance the industry-leading services for buyers and sellers of luxury homes."

“We share a mutual respect and business philosophy with Warburg Realty and their talented team of agents," Andrew Saunders, president of Saunders & Associates, commented on the association. “The goal of this new alliance is to provide yet another level of the best-in-market real estate expertise our firms have come to represent."

Saunders opened its first office last Fall and has quickly recruited some of the top deal makers in the Hamptons. Recently the firm has sold several multi-million dollar properties and has been selected by high profile clientele to represent their properties for sale or for rent.

“We are delighted to partner with Saunders to bring an additional level of excellence to the services we already provide to our clients," Frederick W. Peters, president of Warburg Realty Partnership, commented. “By combining our resources and leveraging the experience of some of the industry's most talented agents, we can offer access to the finest properties in both New York City and the Hamptons."

Since its formation more than a century ago, Warburg Realty has sought to improve and enhance its service "offerings to meet the ever-changing needs of residential clients. This strategic alliance further strengthens both firms' ability to provide comprehensive residential real estate brokerage experience to buyers and sellers of luxury properties in New York City and the Hamptons."

 

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Warburg Realty and Saunders & Associates Form Alliance Serving Homebuyers and Sellers in NYC and the Hamptons Posted By Susan Piperato NEW YORK, NY—Warburg Realty Partnership, one of Manhattan’s…... Read more >

Warburg Realty and Saunders & Associates Form Alliance Serving Homebuyers and Sellers in NYC and the Hamptons

Posted By Susan Piperato

NEW YORK, NY—Warburg Realty Partnership, one of Manhattan’s oldest and most respected residential real estate companies, and Saunders & Associates, a leading brokerage firm based in Bridgehampton, NY, have formed a strategic alliance that further enhances their industry-leading services for buyers and sellers of luxury homes.

“We are delighted to partner with Andrew Saunders to bring an additional level of excellence to the services we already provide to our clients,” said Frederick W. Peters, president of Warburg Realty Partnership. “By combining our resources and leveraging the experience of some of the industry’s most talented agents, we can offer access to the finest properties in both New York City and the Hamptons.”

Since its formation more than a century ago, Warburg Realty has consistently improved and enhanced its service offerings to meet the ever-changing needs of residential clients. This strategic alliance further strengthens both firms’ ability to provide comprehensive residential real estate brokerage experience to buyers and sellers of luxury properties in New York City and the Hamptons.

“We share a mutual respect and business philosophy with Frederick and his talented team of agents,” continued Andrew Saunders, president of Saunders & Associates. “The goal of this new alliance is to provide yet another level of the best-in-market real estate expertise our firms have come to represent.”

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Joining 'Higher' Forces: Warburg and Saunders Create Alliance Manhattan-based Warburg Realty is forming <http://therealdeal.com/newyork/articles/warburg-forms-alliance-with-hamptons-firm> a 'strategic…... Read more >

Joining 'Higher' Forces: Warburg and Saunders Create Alliance

Manhattan-based Warburg Realty is forming <http://therealdeal.com/newyork/articles/warburg-forms-alliance-with-hamptons-firm> a 'strategic alliance' with new Hamptons brokerage firm Saunders & Associates, citing both small companies' success in their respective markets. Warburg "A Higher Standard Since 1896" Realty and Saunders "A Higher Form of Realty" & Associates plan on combining their higher forces in a financial agreement based around referral fees between brokers. Says Warburg president Frederick Peters: 'I don’t want an office in the Hamptons. The whole point of doing something like this is the acknowledgment that I do well what I do well … what I do well is sell in [Manhattan].' Both the owners of Warburg and Saunders believe that 'small company focus' will help them survive the market's downturn, owing to a sense of transparency in companies employing 150 and 25 agents, respectively.< Read less

Saunders & Associates, a Bridgehampton-based brokerage firm headed up by President Andrew Saunders, has joined with Warburg Realty Partnership, a Manhattan-based residential real estate company. The…... Read more >

Saunders & Associates, a Bridgehampton-based brokerage firm headed up by President Andrew Saunders, has joined with Warburg Realty Partnership, a Manhattan-based residential real estate company. The two businesses have formed a strategic alliance to further service buyers and sellers of luxury homes both on the East End and in Manhattan.

Saunders, which specializes in luxury properties, opened its first office last fall on the East End.

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Saunders & Associates and Warburg Realty Form Strategic Alliance to Better Serve Home Buyers and Sellers in New York City and the Hamptons Bridgehampton, NY – July 14, 2009 – Saunders & Associates…... Read more >

Saunders & Associates and Warburg Realty Form Strategic Alliance to Better Serve Home Buyers and Sellers in New York City and the Hamptons
Bridgehampton, NY – July 14, 2009 –

Saunders & Associates a leading brokerage firm based in Bridgehampton, NY, and Warburg Realty Partnership, one of Manhattan’s oldest and most respected residential real estate companies have formed a strategic alliance that further enhances their industry-leading services for buyers and sellers of luxury homes.

“We share a mutual respect and business philosophy with Warburg Realty and their talented team of agents,” continued Andrew Saunders, president of Saunders & Associates. “The goal of this new alliance is to provide yet another level of the best-in-market real estate expertise our firms have come to represent.”

Saunders opened its first office last Fall and has quickly recruited some of the top deal makers in the Hamptons. Recently the firm has sold several multi-million dollar properties and has been selected by high profile clientele to represent their properties for sale or for rent.

“We are delighted to partner with Saunders to bring an additional level of excellence to the services we already provide to our clients,” said Frederick W. Peters, president of Warburg Realty Partnership. “By combining our resources and leveraging the experience of some of the industry’s most talented agents, we can offer access to the finest properties in both New York City and the Hamptons.”

Since its formation more than a century ago, Warburg Realty has consistently improved and enhanced its service offerings to meet the ever-changing needs of residential clients. This strategic alliance further strengthens both firms’ ability to provide comprehensive residential real estate brokerage experience to buyers and sellers of luxury properties in New York City and the Hamptons.

About Saunders & Associates

Saunders & Associates is the fastest growing luxury real estate brand in the Hamptons. The marketing savvy company is known for its ability to empower its seasoned brokers to create and enable deals. Starting with its fast and cinematic website, Saunders provides exceptional service that is thoughtfully aligned with the Hamptons sophisticated culture. (631) 537-5454 www.SaundersAssociates.com

About Warburg Realty Partnership

Warburg Realty Partnership is one of Manhattan’s leading luxury residential real estate firms, founded in 1896 by Albert B. Ashforth. The company has a long-standing tradition of extraordinary service that has kept it at the forefront of New York real estate for over 100 years. The firm’s over 150 brokers are strategically located throughout Manhattan to guarantee every Warburg client the quickest access to New York’s finest properties and purchasers.

 

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Fred Peters and Miles Chapin's 630 Park Avenue in the NY Post $3.7 MILLION Park Avenue might not be on the park, but that doesn't mean you can't look out the windows of this "elegant" two-bedroom co-op…... Read more >

Fred Peters and Miles Chapin's 630 Park Avenue in the NY Post

$3.7 MILLION

Park Avenue might not be on the park, but that doesn't mean you can't look out the windows of this "elegant" two-bedroom co-op and gaze upon "tulips and flowering trees" (at least in spring). Just about every room in this classic seven -- living room, dining room, kitchen, even the maid's room -- overlooks the avenue, with the bedrooms and a "spacious" library set quietly in the back. "Ultra-high" ceilings throughout are also a plus, and there are 3½ bathrooms. The prewar apartment is "priced appropriately for today's market" -- in other words, it's a seven-figure deal. Agents: Miles Chapin and Frederick Peters, Warburg Realty Partnership, 212-327-9660 and 212-439-4502

 

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New Condos Up for Resale By Jay Romano Q I’m interested in buying an apartment in a 100-unit condominium completed in 2007. Twelve units are owned by the sponsor and are still unsold. But more troubling…... Read more >

New Condos Up for Resale

By Jay Romano

Q
I’m interested in buying an apartment in a 100-unit condominium completed in 2007. Twelve units are owned by the sponsor and are still unsold. But more troubling is the fact that 16 additional units are listed for resale. Is this a red flag that something is wrong with the building?

A
“While 16 is a large number of resale units, it is not in and of itself a reason to be concerned,” said Frederick W. Peters, the president of Warburg Realty Partnership.

Mr. Peters said that in 2007 and 2008, many new condos around the city were bought for investment purposes. “Many investors may have planned to rent and hold them, others to resell and profit immediately,” he said.

With the rental market soft and the prospects for large increases in value cloudy, these investors may be deciding that they prefer to extract their money from the investment now.

“Even in the best of times,” Mr. Peters said, “it was always typical to have a number of buyers who, for a variety of reasons, immediately placed their new condo units up for sale.”

 

 

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 Market Watch: We Love U Warburg's Frederick Peters blogs, "In the last two weeks, Warburg agents have put together 22 deals. Now, we are not the biggest company in Manhattan and we had two week…... Read more >

 Market Watch: We Love U

Warburg's Frederick Peters blogs, "In the last two weeks, Warburg agents have put together 22 deals. Now, we are not the biggest company in Manhattan and we had two week periods in 2006 and 2007 in which we put together more deals than that. Still, compared to the two or three deals a week we were assembling back in January (half of which never made it to contract) this is an extraordinary number." Let's not get too giddy, though, friends. Concludes Peters, "We are not looking for a V-shaped recovery. A nice slow U will suit us fine." [Warburg Blog]

 

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Profile Review: Frederick Peters, Warburg Realty In 1978, Frederick Warburg Peters’ wife presented her husband with a book entitled Apartments for the Affluent. Peters wasn’t so interested in the…... Read more >

Profile Review: Frederick Peters, Warburg Realty

In 1978, Frederick Warburg Peters’ wife presented her husband with a book entitled Apartments for the Affluent. Peters wasn’t so interested in the staging and decorative aspects of the apartments featured in the book. Instead, the floor plans fascinated him. “That book was a life-altering experience for me,” Peters, owner of luxury real estate brokerage firm Warburg Realty, recalled in his Madison Avenue office. “I couldn’t put it down. I still have it.”

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Looking for Bottom in N.Y. Real Estate By TERI KARUSH ROGERS WITH sales prices of Manhattan Apartments having tumbled by perhaps a quarter in just the past few months, pinpointing the bottom has become…... Read more >

Looking for Bottom in N.Y. Real Estate

By TERI KARUSH ROGERS

WITH sales prices of Manhattan
Apartments having tumbled by perhaps a quarter in just the past few months, pinpointing the bottom has become a top priority for anyone eager to buy, sell or broker a deal on a home in New York.

Some industry observers foresee market drops of 40 percent, while others think that is too extreme and suggest that price reductions of 25 percent will more be likely the new norm.

There's no question, though, that the boom-or-bust experience has arrived in Manhattan, which had seemed to be avoiding the fate of Las Vegas and Florida.

"It's almost surreal," said Dottie Herman, the president of Prudential Douglas Elliman, referring to the abrupt turnabout after the collapse of Lehman Brothers last fall. Until then, prices had been marching upward, with the median price of an apartment more than tripling in a decade.

To some degree, the rise in prices was logical in New York, where a string of outsized Wall Street bonuses lined the pockets of many buyers.
That wasn't the case in other parts of the country, which suffered from speculation and a large number of subprime mortgages.

No one has any hard numbers yet on New York because first-quarter reports, reflecting closing prices of deals struck last fall, will not be available for a few weeks.

Looking ahead, however, some believe it is possible that the average slide from peak values could reach 40 percent by the end of 2010, with variation by neighborhood and market segment. That would put values back to levels last seen around 2002.

Others are more optimistic. "I'm not disagreeing with you that values are coming down," said Pamela Liebman, the president of the Corcoran Group. But, she said, "there's no way the Manhattan market is dropping to those levels that are being talked about. Certain apartments might, but as a whole it will not happen."

Hall F. Willkie, the president of Brown Harris Stevens, said he, too, would be surprised by a decline that large.

"A lot of negative things would have to happen in the general economy,"
he said. He is seeing sales prices 15 to 25 percent below those of last summer, with renters making up an ever-increasing percentage of buyers.

And he saw a positive sign in the fact that, despite all of the bad economic news, sales volume is about half what it was this time last year.

Jonathan J. Miller, the president of Miller Samuel, a Manhattan research and appraisal company, estimates that contract prices have declined by about 25 percent since last summer.

Just how much further prices will dive may depend more on how soon and how generously banks resume lending than on the recovery of Wall Street or the end of the recession.

Ms. Herman said she expected the brunt of the pain to be borne within the next six months. Others expected the downward drift to last for a year to 18 months, until credit markets regain their equilibrium.

When will we know when the market has reached the bottom?

Frederick Peters, the president of Warburg Realty, noted that some deals his firm had brokered lately were nearing the lows being predicted by others. "Even if the New York market were to end up being 35 to 45 percent down," he said, "to the degree we're seeing deals done at 30 to 32 percent down anyway, it's not very far away."

Mr. Miller says sales activity needs to stabilize first. "You're approaching bottom when you start to see sales activity stop declining and level off," he said. "Pricing begins to push up when you have an extended period, like a year, when sales activity doesn't decline anymore."

One measure of just how anorectic sales have become is the bloated state of inventory.

"It's right now the highest since I started tracking in 1999," Mr. Miller said. Inventory levels in Manhattan have averaged 7,021 a month for the last decade, he said, and there were 10,243 co-ops and condominiums for sale at the end of February - 38 percent more than a year ago.

Many expect that the million-dollar segment will stabilize first because it is powered by first-timers who are drawn by falling prices and don't have to sell before they buy. The process is being helped along by federal efforts to increase mortgage lending: The latest stimulus package enables Fannie Mae and Freddie Mac to extend loan guarantees to New York City mortgages originated this year for up to $729,750.

Mr. Peters predicted that larger apartments, in the three-bedroom-and-up category, would stabilize over the next six months. Those buyers, he said, tend to have an easier time obtaining mortgages through private banking relationships and will become more active once sellers trim prices.

Large drops in prices are not new in the city. The last decade-long increase in prices was followed by about seven years of falling prices starting in the early 1990s, said Ingrid Gould Ellen, the co-director of the Furman Center for Real Estate and Urban Policy at New York University School of Law. Prices fell about 29 percent.

"But there's no rule that a downturn has to be six or seven years," she said. "It's possible that rather than seeing price declines spread out over a six-year period, this time it could be concentrated in a two-year period."

Indeed, both Ms. Herman and Ms. Liebman note that this recession differs from previous ones in that there are buyers on the sidelines this time.

"We see a real increase in traffic and a lot more buyers out there," Ms. Liebman said. "The fish are circling and they will eventually get hungry and start biting. What we're seeing is a big disconnect - sellers need to get more realistic, but buyers don't even think it's enough. Buyers are not hesitating to walk in and bid 40 percent off the price, but sellers aren't taking it."

Recovery, when it arrives, is predicted to be modest. Lenders aren't expected to return to the open-valve position of the boom years.

Ms. Herman said she anticipated a return to annual appreciation rates of 5 to 7 percent. At 6 percent annual appreciation (should that occur after the market stabilized), it would take about nine years for an apartment worth $1 million at peak - and about $600,000 at bottom - to regain its value, according to calculations by Mr. Miller.

The degree and rate of recovery will be influenced by various factors. A Goldman Sachs analysis of the New York City condo market published in early January addressed the possibility that pay cuts in the financial industry or a significant departure of affluent residents could reduce incomes to their pre-Wall Street boom levels of two decades ago. If per-capita incomes were to revert to twice the national average (versus more recent measures of three times the national average), condo prices would need to fall by 58 percent to match the price-to-income ratios of the late 1990s, before the run-up in the real estate market, according to the analysis.

The leveling of the boom may strike condos and co-ops differently.

As prices head south, Mr. Miller said that he expected condos to be more volatile. New construction, including condo conversions, seems likely to suffer the most. "Contract activity on new development has been much harder hit than co-op resales because of credit," Mr. Miller said.

Co-op boards, however, could damage themselves, he said, if they become too picky with buyers.

"The danger they face is that co-op boards are in denial about the change in the market," Mr. Miller said. "They've been even more conservative with this downturn in terms of financial qualifications - if you work on Wall Street now that's like a liability - and they've been killing sales that they feel are low, to protect values in the building."

That sort of behavior only depresses values within a building. "It gets a reputation in the brokerage community of being unrealistic about market conditions and that makes it much more difficult to attract buyers," Mr. Miller said. "I'm not saying they shouldn't be prudent, but by overreacting they are doing what lenders are doing, which is damaging the collateral they are trying to protect."

Mr. Peters said his firm had negotiated some co-op deals "dramatically below where prices have been."

"What we see is that boards are scrutinizing the purchases carefully but not striking down the deal because the price isn't high enough," Mr. Peters said. "I definitely agree that in the current environment, that would be profoundly foolish, because the world is a different place."

A different place and possibly a better one, said Ms. Liebman, who like many brokers manages to see the positive in any environment that comes along. "Why should an average one-bedroom with nothing special to offer cost well over a million? The market got ahead of itself, and this correction is good for New York because it brings the affordability back in line."

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New York Magazine Basic Instinct: Bye-bye, screening rooms. Give me square footage and closet space. By S.Jhoanna Robledo, Published Feb 1, 2009   When the real-estate market was booming,…... Read more >

New York Magazine
Basic Instinct: Bye-bye, screening rooms. Give me square footage and closet space.

By S.Jhoanna Robledo, Published Feb 1, 2009

 

When the real-estate market was booming, all those years ago at the beginning of the 21st century, a tower seemed to be rising on every corner in Manhattan. The people developing and selling these buildings had to differentiate their products, most of which had the same ceiling heights, oak flooring, and more or less standardized kitchens and baths. So a lot of them did it with glitz: Add a super-duper lobby, a wine cellar, a pet spa to one of those buildings, and you could advertise your new development as “unique living!” Buyers, too, joined in. Many had new money, from Wall Street; others were envisioning a Sex and the City life, and amenities like a dedicated game room for the guys or a spa for the women seemed appropriate.

When Vanessa Uzan bought a condo a few years ago, just across the river in New Jersey, she wanted something fabulous and fresh. Now she is looking to move back into Manhattan, and everything’s different. “I’m not swayed by a brand-new kitchen. I don’t need a granite countertop,” she says. Uzan is strictly focused on the fundamentals: location, square footage, closet space, and maintenance fees.

All over the real-estate business, observers are saying that same calculus is playing out. “It’s more about the space, the home, what life they can live in it,” says Century 21’s Barbara Lamb. Buyers are far less quick to forgive subpar locations or odd layouts in sexy projects. “When the market was hot, they’d see amenities and cool configurations and respond to that,” says JC DeNiro executive vice-president S. Hunie Kwon. “I sold spaces where, in the final walk-through, buyers would say, ‘Oh, I didn’t know there were only three closets.’ ” But at his recent open house, he says, hardly anyone admired the fancy backsplash and high-style furniture; the efficient layout and washer-dryer “really got them going,” Kwon says.

Warburg Realty’s Frederick Peters says apartment-hunters are no longer “willing to be teased by what they thought was sexy. This is a value marketplace. Gimmickry won’t motivate.” Instead, says developer Henry Justin, whose 211 East 51st Street condo has only the amenities he deemed essential—doorman, gym, a garden. “You want to make sure your home is where your money’s spent.” Particularly if buying it leaves you too broke to go out.

 

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THE WALL STREET JOURNAL. A Look Ahead/What’s Next Industry Luminaries Look Ahead: What can we expect in 2009? Residential Sales and Development Price-wise, big apartments are taking the biggest hits.…... Read more >

THE WALL STREET JOURNAL.
A Look Ahead/What’s Next

Industry Luminaries Look Ahead: What can we expect in 2009?

Residential Sales and Development

Price-wise, big apartments are taking the biggest hits. Historically, in the past 20 years, the upper end of the market has been the most insulated, but now, with the financial world the hardest hit, buyers are shying away from larger units. In markets like this you tend to see a flight to the familiar. Buyers feel more secure investing in more established neighborhoods. Therefore we anticipate that as in other downturns, the Upper East and West Sides, the West Village and the most established areas of Tribeca will remain strong.

Frederick W. Peters
President, Warburg Realty Partnership

 

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THE REAL DEAL When Comps Fall Short With Fewer Sales, Naming a Price Difficult In Today's Market By Lauren Elkies, August 2008 When sales velocity is slow it can be difficult to accurately price…... Read more >

THE REAL DEAL
When Comps Fall Short
With Fewer Sales, Naming a Price Difficult In Today's Market

By Lauren Elkies, August 2008
When sales velocity is slow it can be difficult to accurately price a home.

Typically, real estate brokers look to comparable sales data, or comps, to find out what similar homes in the seller's building and neighborhood have sold for. But if there is a dearth of sales, as is the case now, the data becomes thin.

"We're in a whole new world. Pricing right now in this market is very hard," said Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty.

Can a broker use closed sales from as far back as a year ago, which reflect deals negotiated before the credit market erupted? What about from six months ago, with those sales going to contract at the end of 2007 in the wake of the meltdown?

Some real estate experts are looking back even further to increase the reliability of their pricing, while others are focusing on current listings.

"We are using the same tools for comps, but also looking at how the prices are comparing to the previous one to two years," said Eddie Shapiro, president and CEO of Nest Seekers. "The idea is to try and identify inflated values as opposed to legitimate rates of appreciation — with all the relative considerations including location, neighborhood, exposure, presentation and condition."

In this market, Stacey Max, an executive vice president and sales manager at Bellmarc Realty's Downtown office, prefers to rely more heavily on listings currently on the market rather than older, completed sales.

"This reflects what the competition is for that property," Max said. "In the past, we used to be able to assume that we could get a higher price than the previous sale in any particular building, and right now that is no longer the case."

But not everyone agrees with that approach.

Jonathan Miller, president and CEO of appraisal company Miller Samuel, said that while the data set is smaller today, he prefers not to look at older data or depend more heavily on listings just to accumulate more data.

"We're spending more time trying to flesh out more recent data just because it's harder to obtain," Miller said. "We've noticed compared to last year, there are fewer sales. So it's more challenging."

By fleshing it out, Miller means talking to the parties involved in a previous sale, getting hold of the actual listing, verifying the square footage, and getting details about all of the amenities beyond what is on the listing.

In rare cases, where little information is available for computing comps, such as in the case of an unusual penthouse, Miller will look back even further.

Miller said his typical methodology includes looking at listings, contracts and closings over the last six months, with emphasis placed on the last month or two.

But relying on listings in this market tends to be less useful than it was a year ago, because "they're rising in number and the average marketing time is expanding," Miller said.

As listings increase, so does competition among sellers, making accurate pricing more critical to closing a transaction.

"It's more challenging now because of the uncertainty, and there's a lot of misinformation out there," Miller said. "National housing statistics have nothing to do with the local market."

As Noah Rosenblatt, a vice president at Halstead Property, pointed out on his site urbandigs.com at the end of June: "If you think you can fool a buyer into paying a 10 percent premium over 2007 comps, think again!"

Still, some real estate pros said they have not altered their approach to testing the market.

Andrew Gerringer, a managing director at Prudential Douglas Elliman who oversees new development marketing, said that his comps approach has not changed.

"The comps we are using are based upon closed sales and current contracts out in a particular market," Gerringer said. "However, this is no different than how we have always approached this." He noted that he uses comps from the past three to six months.

Frederick Peters, president of Warburg Realty Partnership, said he continues to focus on the here and now.

"I always tried to use very current comps," Peters said. "Even if you went back six months, the numbers were never good. Actually, nowadays the comps are easier to use, since we try to persuade sellers in most markets to peg their pricing to the last sale."

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THE REAL DEAL How Long Will Downturn Last? Imperiled Economy To Squelch Market Through 2009, Some Say By Alison Gregor, August 2008   The residential real estate market in New York City…... Read more >

THE REAL DEAL
How Long Will Downturn Last?

Imperiled Economy To Squelch Market Through 2009, Some Say

By Alison Gregor, August 2008

 
The residential real estate market in New York City is showing clear chinks in its armor. The average Manhattan apartment sales price in the second quarter fell for the first time since the fall of 2006, and some analysts expect the bumpy ride to be a rather long one.

"Manhattan held up better than most other places," said Mark Zandi, the chief economist and co-founder of Moody's Economy.com. "Long Island is being hit, as is Northern New Jersey. I do expect Manhattan's housing market to weaken measurably over the course of the coming year."

A combination of less demand, due to the lack of available credit for potential buyers, and more supply, due to a surge in foreclosures, has given the national housing market a wallop, he said. But the weak American dollar has spurred even stronger global demand for Manhattan apartments, propping up the local market.

However, dire predictions among financial analysts and fund managers of a European recession could weaken foreign demand considerably. And the hit being sustained by the financial services sector should make itself apparent in the coming months, Zandi said.

"The fallout from the problems on Wall Street is taking some time to manifest itself in the housing market, but it will as people lose their jobs and bonuses are significantly cut back," he said. "I expect that fallout to hit the Manhattan housing market later this year and in 2009."

As for the national housing market, Zandi, who recently published a book titled "Financial Shock: A 360° Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis," said he anticipated home prices bottoming in the summer of 2009 — by which time they will be 25 percent off their spring 2006 peak — with no appreciable gain in prices for another year.

"It won't be until well into the next decade that we start to experience measurable price growth," he said.

Other analysts agree with that national perspective. Paul Krugman, writing in the New York Times, has said U.S. home prices have fallen 17 percent in the past year, and probably still have "a long way to fall," such that the housing slump may continue to 2010 or later.

Other analysts in New York City, such as the appraiser Jonathan Miller, the president of Miller Samuel, expect a rut in the Manhattan housing market, including a drop in prices, and suggest it will last into 2009 and beyond.

Frederick Peters, the president of Warburg Realty Partnership, a residential brokerage firm, said any slowdown in the Manhattan market that might occur is pinned to the credit crisis.

"In June, Federal Reserve Chairman Ben Bernanke was commenting that he thought the worst of the credit crisis was behind us, but July has clearly proved that that's not the case," Peters said. "And in fact, [August is] the anniversary of when this all kind of hit the fan.

"What I'm saying to my brokers is that the national economy is probably going to be very challenging, and credit issues are probably going to still have an impact on buyers' psychology through the balance of 2008 and the first quarter of 2009."

Peters was careful to say that any downturn he has seen in the Manhattan housing market has been in sales volume, not in pricing. According to Prudential Douglas Elliman Real Estate's second-quarter Manhattan market overview, there were 3,081 sales in the second quarter of 2008, which was down 21.8 percent from the 3,939 sales seen in the prior-year quarter.

"In this case, we've experienced a volume downturn, for sure," Peters said. "One has to be much more specific in parsing prices."

He said the length of time that apartments are staying on the market has grown, which will increase pressure to lower prices. According to the Douglas Elliman report, Manhattan apartments stayed on the market an average of 135 days, an increase of 15 percent from 117 days in the prior-year quarter.

"For a number of years, we had a marketplace in which many listings typically remained on the market for two weeks," he said. "We're not seeing much of that any more. Everything is on the market for months. Obviously, that creates a deeper inventory pool in many marketplaces, which then brings price pressure to bear."

There is price pressure, especially on smaller units, which is being offset by price increases on larger, luxury apartments, Peters said.

"There's downward price pressure probably on the Upper East Side east of Third Avenue," he said. "Also, in certain parts of Tribeca, where there's been a lot of new development. Certainly, there's been some price pressure in new development in Harlem."

Luigi Rosabianca, a managing member of the law firm Rosabianca & Associates, said developers will do anything to keep from cutting prices, even agreeing to hold the note for those who can't obtain mortgages. Still, he said he anticipates a "natural correction" to the Manhattan housing market to the tune of a 5 to 10 percent price decrease.

"Things did go a little haywire, so if there's a natural correction, maybe that's healthy for the market," Rosabianca said. In terms of sales volume, he said, "I think we'll see this summer being quite quiet, and you may have gradual improvement over the fall and winter. And then we'll see a spurt in sales next spring."

But Rosabianca pointed out that the elections this fall may also play a role in spurring the economy, which could boost the housing market.

"It's amazing what elections do to an economy," he said.

Stuart Saft, a real estate partner at the law firm Dewey & LeBoeuf, said he has not seen a price cutting thus far among developer clients, largely because many canceled or postponed development plans two years ago.

"A lot of developers, when they saw the market starting to soften two years ago, pulled out and decided to wait," Saft said. "So we never had that kind of excessive development that exists in other parts of the country."

Still, Saft said the residential real estate market "will soften and probably continue to soften through the end of the year."

Even if some developers postponed their plans, there were enough projects that went forward to keep at least one business watching. Philadelphia-based Korman Communities owns four AKA properties, which specialize in extended-stay lodging converted from failed condominium projects. It aims to add as many as a dozen more properties in the next five years, said co-president Brad Korman.

"We are starting to see some incredible opportunities for growth," he said. "Buildings that broke ground 18 to 24 months ago are starting to come online, and owners that are very nervous are starting a sales effort in this market."

While the residential market downturn is more a reflection of the credit crisis than market fundamentals, that could change if the banking industry is further weakened, leading to further loss of consumer confidence, he said.

"Nobody is certain where the bottom of the market is, and everyone is afraid of paying too much in a falling market," Korman said. "This attitude will keep velocity down just as many new condo projects are starting their sales effort."

Korman predicted that while international buyers will continue to fuel the luxury apartment market, the mid-priced sector will need 50 percent more time than expected to sell its inventory. The real exposure in Manhattan will be Downtown in the Financial District, where a price drop is almost inevitable.

"The Financial District was solid in selling condos in the $700- to $900-per-foot range," Korman said. "Too many new buildings came online trying to sell at $950 to $1,300 per foot. When the investment banks stopped the bonuses, these buildings lost the majority of their buyers. I think these buildings will have to rely on foreign purchasers, and I believe prices will come down to compensate for the location."

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THE REAL DEAL Summer Sales Slower Than Usual Price Cuts Increase, Signaling Weakening Residential Housing Market By Lauren Elkies, August 2008 July was hot, and buyers were not bothered –…... Read more >

THE REAL DEAL
Summer Sales Slower Than Usual
Price Cuts Increase, Signaling Weakening Residential Housing Market

By Lauren Elkies, August 2008
July was hot, and buyers were not bothered – at least when it came to buying Manhattan real estate.

Open house attendance was down, beyond the usual summer ebb, and price adjustments were more frequent — both indicators of a weakened housing market.

Richard Rothbloom, a vice president at Brown Harris Stevens, said that his sales open house attendance last month was "hit or miss."

Stefani Pace, an associate broker at Prudential Douglas Elliman, said that appropriately priced units are garnering heavy traffic at sales open houses, but if they are even "just a little overpriced," attendance drops off.

At Barak Realty's Sunday open houses, there was an average of 6.7 visitors in July versus 7.4 in June. Barak Dunayer, the company's president, said that the drop in the number of house-hunters as well as the increase in the number of price cuts reflect the soft market.

Crowded open houses usually mean a property will sell quickly, said Frederick Peters, president of Warburg Realty Partnership, adding that he does not know if the reverse holds true — that a sparsely attended open house translates into a property that sells slowly.

On the rental side, open houses were doing poorly last month.

"Rental open houses are dead," Pace said. (For a different take on open houses for rentals, see story on page 82.)

Lesley Steiner, associate broker at Century 21 NY Metro, echoed Pace's comment.

"There are [fewer] people coming to rental open houses, and in some cases no one shows up," Steiner said.

Apartments have been languishing on the market, but some brokers say that price slashing seems to be effective at increasing buyer and renter interest.

Esther Sapan, a rental salesperson at Adina Equities, said that while the rental market was busier in July, rents were reduced both months to get deals done.

On the sales side, "some apartments are still sitting, but as you do incremental price drops, more buyers come out to look at it," Brown Harris Steven's Rothbloom said.

The discount off the asking price that buyers are getting from sellers has increased. Between the first and second quarters of 2008, the spread between list price and final selling price grew to 3.6 percent from 3.2 percent, according to data prepared by appraiser Miller Samuel for Prudential Douglas Elliman. In the second quarter of 2007, the discount was only 2.2 percent.

Jonathan Miller, president and CEO of Miller Samuel, said the expanding spread does not necessarily mean that price drops were greater. It could be that list prices rose faster than sales prices did. "Either way," Miller said, "it shows a widening gap between buyer and seller."

Ari Harkov, an associate broker with Halstead Property, said, "Properties are still trading, some immediately after coming onto the market and some at full asking or even above, but I think price sensitivity is increasing. This is leading to a larger percentage of properties sitting on the market that may not sell at all or will only sell after several months on the market and several price reductions."

Sha Dinour, president of Triumph Property Group, estimated in mid-July that apartments were sitting on the market 10 to 15 percent longer in July than in June. Second-quarter market reports for Manhattan showed that year-over-year, inventory shot up and sales activity slowed, but home prices still hit record highs. Sales at the high-end 15 Central Park West and the Plaza Hotel, which were negotiated in the first quarter of the year if not before, skewed the numbers.

Looking at just the tail end of the second quarter, only May and June, the last two-month period for which data was available, sales picked up by 12.5 percent to 1,204 sales, according to data from a report by Terra Holdings, parent company of Brown Harris Stevens and Halstead Property. The median sales price receded between the two months by less than 1 percent to $960,000, Terra Holdings determined.

Market takes hit, brokers adjust

As the middle market suffers and buyers demand greater price cuts, brokers are adjusting their approach to keep up with changing market conditions.

The Real Deal sent out its monthly survey to see what some brokers had to say about what they are seeing in the field. Here is a sampling:

Stefani Pace, associate broker at Prudential Douglas Elliman: The middle co-op market is where I am seeing the biggest slowdown. Many of my customers are putting their search on hold and my clients are getting frustrated.

Khashy Eyn, president and CEO of Platinum Properties: If you list a $5 million-plus home, you know that there is a scarcity of homes in this category, and you'll ultimately find an affluent individual willing to spend that amount. What seems to linger on the market the longest are the listings that have 100 other listings or so in the same category — for example, one-bedrooms under $1 million in Midtown.

Steen Rasmussen, senior vice president and sales manager, Warburg Realty Partnership: Brokers are revising and improving their business and marketing plans and preparing themselves for a bumpy six to nine months ahead. They are adjusting to the new pace of the market, which requires more patience working with both buyers and sellers.

JoAnn Schwimmer, sales agent, DJK Residential: The renters [were] back in the Manhattan residential market in July. Buyers are also out there and looking for drastic price reductions as a result of the negative national news, but the New York City market is very strong. Higher-end properties have dropped slightly, but the mid-market prices are steady.

Ken Scheff, managing director, Stribling & Associates: Some buyers of smaller apartments are being affected by tighter financing guidelines.

Cindy Gise, vice president, Prudential Douglas Elliman: I think we have to be tougher and need to tell sellers they need to be realistic if they are serious. Screening buyers is a must and something you need to do from the beginning of your buyer/broker interaction.

Sha Dinour, president, Triumph Property Group: I think no one is denying the slowdown, and we are all just grateful to move our inventory. I think appointments and accommodations by other brokers have improved.

Edward Longley, senior vice president, City Connections Realty: As of this point I have not seen any drastic changes. I am spending a little more time finishing my doctorate, playing with my daughter and so forth, but I think that is just a seasonal thing.

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THE REAL DEAL This Time, Inflation May Have Different Impact By Alison Gregor, August 2008   Reports that consumer prices spiked 1.1 percent in June raise the issue of inflation, which…... Read more >

THE REAL DEAL
This Time, Inflation May Have Different Impact

By Alison Gregor, August 2008

 
Reports that consumer prices spiked 1.1 percent in June raise the issue of inflation, which has in the past been advantageous to real estate investors. In the current state of the market, it's not clear if rising inflation will end up being a boon or a burden on top of the credit crisis.

During the inflationary periods of the 1970s and 1980s, many investors who held real estate made out reasonably well, reinforcing the idea that real estate is a good investment for bad times.

"A lot of people buy real estate during inflationary times with the idea that it would be a hedge against inflation," said Robert Stella, an executive vice president and principal at Cresa Partners, a commercial real estate brokerage. "Say it cost you $1,000 to build a building. If inflation goes up 10 percent, your building's probably going to be worth at least 10 percent more, or $1,100, so that's good."

Inflation is often thought of as a beneficial phenomenon for real estate investors, agreed Jim Frederick, an executive managing director and principal at Colliers ABR, a commercial real estate services company.

"Hard assets are always more attractive in inflationary times," Frederick said.

Since inflation, in a sense, can add equity to a building, it can effectively take a bite out of the building's debt, Stuart Saft, a real estate partner at law firm Dewey & LeBoeuf, said.

"Credit is more significant in real estate than any other aspect of the economy, because real estate is basically an illiquid investment," Saft said. "Having a period of inflation, if you're a real estate owner or lender, solves the credit problem, because suddenly, the value of the asset can be in excess of the amount of debt that's on the asset."

However, real estate investors in today's market face other pressures that make it less advantageous to own real estate now. First of all, the absence of cheap and easy financing makes it difficult to sell a building and reap any immediate benefits from inflation, Stella said.

"If people aren't buying your building because they can't finance it, the value is only a paper value," he said. "That's a new twist that could create some issues for an investor trying to hedge, because if you want to sell it, there may not be many buyers — at least until this credit crisis plays out."

Paul Fried, a principal at AFC Realty Capital, a national boutique investment bank, said real estate might be a hedge in inflationary environments — as long as it's not the sector that went through the inflationary period.

"Normally, you would think it would be good to hold real estate in an inflationary period, but you're assuming real estate is not the asset that's in the inflationary cycle," he said. "Right now, real estate values are at historical highs as a result of going through an inflationary cycle caused by cheap monetary policy."
The Federal Reserve's reaction to inflation may also determine whether or not real estate investors thrive, or have to struggle to survive. The Fed could decide to increase interest rates.

"What matters to real estate is the real interest rate, which is the nominal interest rate minus inflation," said Mark Zandi, the chief economist and co-founder of Moody's Economy.com.

"If you have an acceleration of inflation and interest rates don't rise, i.e. if the Federal Reserve doesn't tighten policy, then generally, it's good for real estate," he said. "If conversely, though, inflation rises and the Federal Reserve tightens policy, and real rates increase, that's bad for real estate."

Zandi said he believes the latter is more likely, with the federal government sacrificing the economy to achieve the goal of stable inflation.

"In the 1970s and early 1980s, inflation increased, but the Federal Reserve did not raise interest rates, so real rates went negative, which was good for real estate," he said. "That won't happen this go-around."

Saft agreed with Zandi, asserting that officials in the Federal Reserve, which had been gradually cutting interest rates to aid the struggling housing market, will worry that investors will shift their capital from U.S. securities markets to other markets where they can get a higher return. The federal government will raise interest rates to attempt to make the U.S. securities market more competitive.

"That's where the real pressure on the Federal Reserve to raise interest rates is going to come from," he said, adding that it will have a devastating effect on the housing market. "Raising interest rates will make the dollar more competitive as an investment, but on the other hand, it's going to trigger more defaults here in the U.S.," he said.

Fried said that if Federal Reserve officials raise interest rates, it will be a "double whammy" to real estate values.

"You know they've got to be struggling with this, because the instinct is to raise rates, because that is better for monetary policy," he said. "If they do raise rates, you're really going to get squeezed in terms of tightened underwriting standards along with the increased cost of capital.

"So does it feel like real estate is a hedge?" Fried continued. "The answer is 'no.' Don't argue with your gut on this one."

Still, Fried said, while real estate as a sector may be hurt by increased interest rates, individual assets with either solid fundamentals or strong cash-flow that are being held in the longer term should be "reasonable places to be."

But real estate owners with floating interest rates — for instance those who took out short-term loans 18 months to three years ago to purchase transitional buildings with a vision of turning them around — may end up losing their properties if the Federal Reserve raises interest rates, Fried said.

Frederick said he thinks the Federal Reserve will be sensitive to the credit problems plaguing the real estate market and forego raising interest rates.

"I don't think the Fed will be able to raise rates any time soon because of the continuing banking turmoil and most recently the issues with Fannie and Freddie," he said.

Frederick Peters, the president of Warburg Realty Partnership, a residential brokerage firm, said the looming problem for the mortgage market is not simply more conservative underwriting standards, but a shortage of capital altogether. For that reason, the Federal Reserve won't raise interest rates.

"On the one hand, you have an economy that's not zippy, and which to some degree is being stifled by the general lack of credit," he said. "On the other hand, you have this threat of inflation.

"Ordinarily, you'd try to pump energy into the first problem by lowering rates," Peters said. "And ordinarily, you'd try to manage the second problem by raising them. So my guess is, at least for the time being, [Federal Reserve Chairman Ben] Bernanke's not going to do anything."

In the meantime, price inflation caused by more expensive petrol-based construction materials, along with increased global competition, will make new real estate development less feasible, he said.

And as the rate of inflation increases, the value of payments on longer-term debt decays. Yet many New York City residents are protected simply because the large number of co-ops in the city means many people are no more than 75 percent financed. Still, depending on what happens with real wages, homeowners will most likely pay a larger chunk of their income toward common charges.

In the commercial market, there's an air of uncertainty because costs are going up due to inflation for both tenants and landlords, said Abraham Hidary, the president of Hidrock Realty, which is a commercial real estate services firm that also serves as a landlord. Landlords often tend to shift excess costs to tenants.

"Tenants are being squeezed, so they are avoiding signing long-term commitments right now; they're waiting until the last possible second to sign a lease extension or to move," Hidary said. "And if they do have to sign a lease, they're keeping it as short as possible — a five- or seven-year lease versus a 10-year lease.

"And if they do have to move, they'd rather be in a quality building a little bit off location to keep their rent down."

 

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SHOULD ALL CO-OP APPLICATIONS BE THE SAME? By Lauren Elkies, June 2008 It's a process that can be a veritable nightmare: getting a mortgage loan approved, supplying personal information, preparing financial…... Read more >

SHOULD ALL CO-OP APPLICATIONS BE THE SAME?

By Lauren Elkies, June 2008

It's a process that can be a veritable nightmare: getting a mortgage loan approved, supplying personal information, preparing financial documents, acquiring reference letters, undergoing credit checks and finally, making numerous collated copies of the package for review by the property manager and co-op board — and all that's before the fateful interview.

Besides being extensive and intricate, co-op board applications are not uniform, and with roughly 2,500 co-op buildings in Manhattan alone, that can amount to a lot of different variations. Now even condos have become fussier, with applications similar to those required at co-ops.

Some real estate pros think the co-op application process could be simplified with a standardized application. The topic was addressed at a recent meeting of the Real Estate Board of New York sales council, a group of brokers who liaise between REBNY and its member brokers. Alan Pfeifer, a senior vice president at Halstead Property and co-chair of REBNY's sales council, said the group decided at its May meeting to form a subcommittee that will work on the uniform application in September, when the council reconvenes.

Proponents of a standard form say that it could make matters simpler for managing agents, who oversee the building's day-to-day maintenance and finances, and for buyers and their brokers, who would know from the get-go what the board was looking for. Opponents say that managing agents are lame ducks, so their preferences are irrelevant, and since all co-op boards basically ask for the same information, brokers should know how to prepare their buyers. In addition, a uniform application does not work for boards seeking additional information.

Anthony Miller, a vice president at Bellmarc Realty who initially raised the standardization issue at a previous sales council meeting, said, "I got sick and tired of board packages that maybe don't serve the interests of the boards nor the managing agents and can drive both buyers, sellers and brokers absolutely crazy.

"Miller said that he recently helped a couple prepare the financials for an application to a co-op. The board wanted the assets to be divided between the husband and wife.

"This doesn't really help matters because in no case did it show what the combined assets were," he said. "That's an example of a bad format. It makes the asset total look weaker than it actually is."

Miller said that a standard form could be used on a voluntary basis, and buildings would be able to customize it with a "rider or an addendum to the application."

Not everyone thinks uniformity is a good thing.

Arthur Weinstein, vice president of the Council of New York Cooperatives & Condominiums, a not-for-profit organization for housing cooperatives and condominiums in the New York area, and a real estate attorney, thinks standardizing the forms is a "terrible idea." He added, "It's a stupid idea because each building has its own concerns."

One building with porous interior walls that he represents asks on the application about smoking habits because many of the building's residents are asthmatics who cannot have smokers dwelling in the building.

"Other buildings wouldn't care less about smoking," Weinstein said.

So long as it's legal, "the whole point of the matter is to live in a co-op, you should be able to pick who your neighbors are going to be," Weinstein said.

Still, a voluntary standard form could be a decent idea, he acknowledged, and a good jumping-off point.

But as private corporations with total autonomy, many co-op boards would be opposed to the new approach, he said.

Frederick Peters, president of Warburg Realty Partnership, said that while managing agents might be amenable to using a standard board package, the boards would not be because "they're not going to want some outside body telling them what to do. They want the autonomy."

Some buildings are more interested in social issues than others, with questions about a would-be buyer's friends and organization memberships. Other buildings emphasize more rigorous background checks. Still others want to know about pet ownership and subletting.

Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty, said that there is no way a co-op board is going to agree to use a standard form.

Besides, the application isn't the issue since they all pretty much ask for the same information. Preparing a successful package is more about what's not in the application.

"It's not what you need; it's how it's presented, how it's tweaked," she said.

An application may ask who will be residing in an apartment, for example, but only someone familiar with a specific board would know that the board only approves couples with a maximum of two children. Or, a board may specify the number of references on the application, but only someone knowledgeable about the building would know its board only accepts written references.

Managing agents often run a number of buildings, and a uniform application would make their lives easier.
Donna Weinberg, a management executive at Lawrence Properties, a residential management and brokerage firm, said she thinks a standard form would be "great." The applications at the company's 60 residential buildings, 95 percent of which are co-ops, all have the same financial and reference requirements, but some of the building's house rules may be different, Weinberg said.

Anita Sapirman, founder and president of Saparn Realty, a residential management firm, said that she uses a standard application but alters it to suit each building.

"Usually, you can have one that is fairly standardized and then try to accommodate that particular board, adding some little item that they may want," Sapirman said. She uses a uniform rental application.

"For me, it's a great idea. I love that it would be one standardized form. It just makes it simpler for my staff to go to the board and say, 'Here's the application; let's use this,'" Sapirman said.

Neil Binder, principal of Bellmarc Realty, which has a property management arm in addition to its main business, residential brokerage, said he would not support standardizing co-op applications.

"Different buildings have different criteria that they feel are pertinent to their evaluation search. There is already a number of 'standard forms' including those proposed by Bellmarc," Binder said. "Invariably, boards have objections to these forms and wish to have additional elements added."

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REBNY gala lifts spirits amid gloomy financial news By Jen Benepe - The Real Deal Thousands of who's who in New York real estate descended on the Hilton Hotel on January 17 to commemorate…... Read more >

REBNY gala lifts spirits amid gloomy financial news
By Jen Benepe - The Real Deal

Thousands of who's who in New York real estate descended on the Hilton Hotel on January 17 to commemorate the Real Estate Board of New York's 112th anniversary. An exclusive, invitation-only cocktail party started off a night of industry power brokers mingling with politic bigwigs, including a parade of the 2009 mayoral candidates.

Tickets to the event were $900 each and the crowd was suitably dressed to impress, creating a sea of tuxedos dotted with the occasional elegant gown, like the navy Armani worn by Faith Hope Consolo. But the mood was somber at moments.

The gala took place the same day that Merrill Lynch announced its worst earnings quarter in four years, and days after Citigroup announced a jaw-dropping fourth-quarter loss of $9.83 billion, adding more fuel to worsening fears that the mortgage meltdown has triggered a recession that will hurt real estate sales, even in the so-called "insulated" New York City market.

"Sales will be leveling off," said Frederick Peters, president of Warburg Realty, on line to check his coat. "The first two quarters won't be so good, and prices may be down."

"This is an interesting time to have the event," said a commercial real estate finance executive. "No one is smiling except the Goldman [Sachs] guys—or it's the alcohol," he noted. He declined to be identified because he works for a major firm that” got burned" this year.

A sampling of big real estate players on hand included: Bob Knakal, chairman of Massey Knakal; Sandy Lindenbaum, of Kramer, Levin, Naftalis, and Frankel; Douglas Durst; Jon Mechanic of Fried, Frank, Harris, who received the Kenneth R. Gerrety Humanitarian Award; Francis Greenburger, CEO of Time Equities Inc.; Mark Shaw, executive vice president for strategic planning at Extell Development Co.; Darren Hornig, Dwelling Quest's founder; Pam Liebman, president of the Corcoran Group; Jerry and Rob Speyer of Tishman Speyer; and Bruce Mosler, CEO of Cushman & Wakefield and recipient of the Louis Smadbeck broker recognition award.

A perennial observation about awards ceremonies: Attendees often pay little attention to them, even though they pull out all the stops to be there. In this case, officials on the dais as usual tried in vain to shush the talkers in the crowd, to little avail.

But more difficult to talk over was New York City council member Melinda Katz's rendition of "America the Beautiful," proving that patriotism trumps bad manners.

Still, the country's economic health was clearly on the minds of the guests.

David Baxter, a member of the Cushman & Wakefield team that sold 666 Fifth Avenue in December 2006 for $1.8 billion, the highest amount ever paid for a single building in the U.S, said he is "cautiously optimistic," about next year.

"Pricing is off 5 to 10 percent, depending on the area," he said. Nevertheless, he added: "there is still tremendous demand."

Bob Knakal said he thinks the devalued dollar will continue to help New York real estate in the coming year. "People are talking about deals," he noted.

When asked to comment on the economic outlook for 2008, Steve Ross, chairman of the Related Companies, said, "I have two words for 2008: troubled waters."

Joseph Moinian, who was with his tall son Mitchell Moinian (his second eldest, and a sophomore at New York University) said, "It's going to be a great year for the Moinian Group."

Is he poised to buy while everyone else loses their buildings? "For the right situation, yes," Moinian said. "But while all the other diehards are busy getting their act together, we're delivering amazing product to the market, like the W Hotel, and Atelier," he said.

"It's still early in the game to predict, and there has been no slowdown in leasing activity," said William Rudin, president of Rudin Management. "Things went up too fast and too quickly," he said of the last few years. The current market is more realistic, with more appropriate lending standards. 'We don't overleverage as a company," he noted.

Will he capitalize on some of the fire sales coming up in 2008? Rudin is less likely to go after a building with a "5 to 6 percent cap [rate]," he said. By contrast, his St. Vincent's development in the West Village is a "long-term play that has complexity," he noted.

"From a broker's perspective, [the declining economy means] they're going to need us now more than ever," said Lisa Maysonet, senior vice president at Prudential Douglas Elliman. "Before, the properties would almost sell themselves, but now you need real deal makers."

Tamir Shemesh, a managing director at Elliman, said he is still bullish on 2008.
He noted that despite the talk, overall bonuses on Wall Street surpassed total 2006 bonuses at the biggest investment banks, and foreign money continues to drive business. "We lost a bidding war with a buyer from Spain" for a $2.3 million property, he noted.

Edward Andron of Leebar Management, a building management company, said the coming year was going to include "a budget crunch, and a tightening of our belts." The net effect: "There will be a lot more for foreigners to snap up, but it will also be more competitive."

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FINDING BRIGHT SIDE OF A DOWNTURN February 2008 THE REAL DEAL Falling Wall Street bonuses and fears of a nationwide recession may affect demand for Manhattan homes, but local market watchdogs…... Read more >

FINDING BRIGHT SIDE OF A DOWNTURN
February 2008 THE REAL DEAL

Falling Wall Street bonuses and fears of a nationwide recession may affect demand for Manhattan homes, but local market watchdogs maintain, albeit cautiously, that Manhattan real estate is still a solid investment.

"Quite obviously, if the country goes into a recession, New York City real estate would logically be affected," said Elizabeth Stribling, president of Stribling & Associates. "That said, the perception that real estate in New York City is a better investment than placing money in the stock market continues to be a stated reason for buying for many of our customers."

Naturally, lower bonuses and record losses among some of the largest companies will temper activity, particularly among those dependent on their bonus to purchase an apartment. But bonuses still ranked the second highest since at least 1985, at $33.2 billion or an average of $180,420 a person, according to data from the state comptroller.

They are "still very hefty numbers," said Diane Levine, brokerage manager of the downtown office of Sotheby's International Realty. The "market in New York City is still active."

Frederick Peters, president of Warburg Realty Partnership, was more circumspect.

"We have so far not seen much change one way or another in the marketplace," Peters said. "Clearly, there has been a large injection of capital into the portfolios of many in the financial industry. There is of course some offset of apprehension about the fear of recession and the continued weakness in the national housing market. For the moment, these two forces seem to be holding one another at bay."

If the country sank into a recession, it would take time for the effects to take hold of Manhattan's residential real estate market.

"How much time would really depend on how deep the recession goes," said Gregory Heym, executive vice president and chief economist at Terra Holdings, parent company of Brown Harris Stevens and Halstead. "You have to remember that homes are not like stocks; their prices can't move as fast. The concern over the next few months will be the effect of a possible recession on buyer confidence."

And looking further out, there's unease over what bonus payouts will be next year.

On the surface, sales in December ended with a bang, but the data, the most recent available at press time, were skewed by a spike in closings in new developments fetching eyebrow-raising prices.

The number of co-op, condo and cond-op unit sales in Manhattan increased to 779 in December from 720 in November, according to research by Heym of Terra Holdings. The median sales price increased in December to $928,378 from $836,250 in November.

"The rise in price, and to a lesser extent, sales, can be attributed to 15 CPW, which had more closings in December than November," Heym said. "Also, there were closings at the new development 823 Park Avenue, four of which were for over $10 million. Forty-five Park Avenue also had a lot more closings in December. So, basically I'd attribute both increases to new developments."

December saw a drop in inventory, consistent with years past. Inventory fell to 5,415 from November's 5,677, according to data from Jonathan Miller, executive vice president and director of research for Radar Logic. Sellers typically take their homes off the market in order to re-list them in the stronger spring market.

While brokers said that the sales market is chugging along with buyers who can withstand greater loan scrutiny, the rental market seems to be taking a big hit, though December data from Citi Habitats show that rents averaged $5.25 more in December from November to $3,219.

"Even with less rental buildings being constructed, the lack of demand is almost unprecedented in my 35 years in the business," said Marc Lewis, COO of Century 21 NY Metro.

"Landlords, across the board, are reporting this, and only the ones who sharpen their pencils and reduce rents, pay fees or offer other incentives are rapidly renting their units," he said.

He forewarned, "The market is returning to where it was during the recession of 2001."

Effects of the credit crisis could be more apparent in Manhattan this quarter than the third and fourth quarters of last year, since closings in the first three months of the year would likely reflect deals from the latter part of last year, following the eruption of the credit market.

In terms of current activity level, this month will be telling since generally there is a burst of contract activity at the end of February, Miller said.

"That's something to look for as an early warning sign of what's going on," he added.

Residential brokers sound off

With bonuses dropping, companies suffering record losses and fears of a recession looming, it's hard to ascertain what is going on in the real estate market. To get a handle on market conditions, The Real Deal recruited real estate pros last month to give their opinions on which way the market is headed.

Rick Pretsfelder partner, Leslie J. Garfield & Co.
While bonuses overall are down 4.7 percent, the composition of the bonuses (i.e., more stock than cash in some cases) is also an important factor. We don't expect a huge impact in the immediate term, but if there is a sense that bonuses will be down again in 2008, then the real estate market may take a hit.

Mike Simon president, Century 21 NY Metro
The rental market is getting off to a slow start with a tremendous amount of inventory, some of which has been sitting around not being rented for a few months. Some owners are having trouble adjusting, and this is clogging up the market as others are reducing rents, paying fees or giving away free time as an inducement for clients to take their units.

Gil Neary president, DG Neary Realty
There will be more activity, but people, as opposed to last year, will be a little more cautious about how they spend their money – looking for better value, perhaps.

Frederick Peters president, Warburg Realty Partnership
There is no sign and no anticipation of an increase in prices, nor does there seem to be a decline in absorption or a decrease in prices.

Michele Kleier president and chairman, Gumley Haft Kleier
Everybody wants a piece of New York. I don't think people who get smaller bonuses are going to move out to the suburbs. … People with lower bonuses may be going from buying a $9 [million] to buying a $7 [million] apartment.

Toni Haber executive vice president, Prudential Douglas Elliman
Probably if you bought a year ago and you're selling now, if you include closing costs from before, you may not come out in the positive. Appreciation is not as great, unless it's 15 Central Park West.

Lisa Lippman senior vice president, Brown Harris Stevens
It is still a seller's market if someone bought more than two years ago. It's easier for buyers to buy now than it had been, but still there are more buyers than good inventory.

Sha Dinour president, Triumph Property Group
Anyone transitioning from a rental to a purchase can find good deals in comparison to a rental scenario. Anyone in need of selling a property to upgrade or downgrade for another property is experiencing a much more difficult time.

Eddie Shapiro CEO, Nest Seekers International
Some buyers are actually under the illusion that if they wait a little [while], prices will come down; not going to happen. … New fed programs, including tax rebates and massive interest rate reductions should fuel confidence again.

Klara Madlin president, Klara Madlin Real Estate
In the last five years, people have grown to expect sales with bidding wars and double-digit appreciation. This year will return to more normal housing conditions, single-digit appreciation and a six-month turnaround on sales.

Robin Schneiderman vice president, Citi Habitats
New buildings or condo conversions with high common charges will be the first to slow down. People are concerned about overall costs and are looking at these charges more carefully.

Compiled by Lauren Elkies

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December 2007 After slow fall, inventory starts to grow Will lower bonuses make the traditionally slow fourth quarter even slower? By Lauren Elkies It's a simple real estate equation: Sales go down, inventory…... Read more >

December 2007

After slow fall, inventory starts to grow

Will lower bonuses make the traditionally slow fourth quarter even slower?
By Lauren Elkies

It's a simple real estate equation: Sales go down, inventory piles up and prices start dropping.

That's what's been going on in Manhattan's residential real estate market, and more of the same is on the way as deals made in the wake of the credit crisis come to a close.

"August and September were bad. If I had a weak August and September, collections will be weak in December and January," said Neil Binder, principal and co-founder of Bellmarc Realty. "Most firms will have to go into reserves to keep the show on the road" those two months.

"The month of October was fine, nothing special, nothing terrible. It was just OK. This particular month looks similar," Binder said in late November.

Add to that the post-Thanksgiving market slowdown, the traditionally weak fourth quarter and uncertainty about bonus payouts. Some news reports have said bonuses are expected to be flat to down 15 percent compared to last year. Bonus payouts are predicted to vary by different sectors within banks more than most years, because some divisions like stock trading and investment banking did well, while areas the with most exposure to the mortgage fallout did poorly.

"If there is a significant bonus payout, you see a pickup in activity in the last few weeks of December. I would suggest you won't see as much of that this December, because the expectation is that bonuses will be lower than last year," said appraiser Jonathan Miller, executive vice president and director of research for Radar Logic.

Although New York's market is faring better than markets in the rest of the country, October data, the most recent available at press time, showed a less than rosy picture.

The number of co-op, condo and cond-op unit sales in Manhattan dropped 11.5 percent to 1,048 from 1,184 between September and October, according to research by Gregory Heym, chief economist at Terra Holdings, parent company of Brown Harris Stevens and Halstead. There was a slightly more dramatic drop -- 13.7 percent -- year over year, when there were 1,215 sales.

Manhattan condo, co-op and townhouse inventory was up in October from September. The number of available homes rose 4.2 percent to 5,721 in October from 5,490 a month earlier, Miller said. Barak Dunayer, president and founder of Barak Realty, shrugged off the increase, saying, "What's the big news? A tiny 4 percent increase in inventory?"

Each building class saw an uptick. There were 2,522 co-ops, 2,900 condos and 299 townhouses on the market in October, up from 2,472 co-ops, 2,732 condos and 286 townhouses a month earlier.

Though telling, the numbers are not completely atypical.

"I would suggest it's not unusual to see inventory rise somewhat in October, but this would suggest a weaker level of demand," Miller said. Last year, however, listings did not actually rise between September and October. Indeed, they shrunk 9.5 percent to 7,350 from 8,118.

In addition to a rise in inventory, the median home price fell 3 percent in the borough between September and October 2007 to $800,000 from $825,000, Heym of Terra Holdings found.

On the rental side, market assessments were varied.

"The prices of the rentals are down. For $3,500 rentals, we can't get $3,000," Binder said. "I think that there are just a lot of people that are uncertain that are not moving."

October's vacancy increased to 1.13 percent from 1 percent in September, 0.85 percent in August and 0.81 percent in July, Citi Habitats numbers show (see Rental market shows some signs of weakness and In a rental town, vacancy numbers stir debate).

Anecdotally, some real estate pros said the sales business was going strong last month, although buyers still need some handholding in following the credit crisis.

"I'm not the cock-eyed optimist but I'm basing it on what I see now," said Paul Purcell, co-founder of real estate consulting firm Braddock + Purcell.

Leonard Steinberg, an executive vice president at Prudential Douglas Elliman, said that he expects business to "be slow through December" and "pick up in January, not at the same level of previous years though." He added that "buyers and sellers are cautious right now. This is a bit of a 'wait and see' market. That always changes sooner of later."

Sounding off from the trenches
To keep our finger on the pulse of the Manhattan residential real estate market, The Real Deal sent out a survey last month to key players in the industry, asking them to weigh in on the current climate. Some excerpts:

Shai Shustik CEO and founder, Manhattan Residential
There has definitely been a slowdown for the average cookie-cutter unit. People are looking for deals and taking longer to execute. Units that are priced as if we were in 2005 are not moving and just flooding the market with unsold statistics.

Frederick Peters president, Warburg Realty Partnership
There are few bidding wars, and when they do occur it is only on very well-priced properties. Even then, things are not going much over the asking price and there may be two or three bidders, not six or eight. Almost nothing is sold anymore in a week or two.

Kathy Braddock co-founder, Braddock + Purcell, and Charles Rutenberg Realty
The most positive trend in the market right now is that the mortgage problem and the media have not deterred our market. The most negative is that it is still hard for first-time buyers to acquire the liquid assets that they need.

Diane Levine brokerage manager of the Downtown office, Sotheby's International Realty
Certain sellers are still attempting to push beyond the value of their property. Correctly priced properties are moving. And, those attending open houses tend to be "real" buyers.

Gordon Golub senior managing director, Citi Habitats
Studios as well as larger units (1,600- to 2,200-square-foot two-bedrooms and three-bedrooms) are being absorbed very rapidly, while one-bedrooms are taking longer to go to contract.

Barak Dunayer president and founder, Barak Realty
Overall, the attendance at open houses has been steady. The only noticeable difference is that buyers stay away from undesirable properties. I still remember the times that people bought any hole in the wall.

David Schlamm president, City Connections Realty
The rental market actually slowed down a lot earlier than in previous years. This year we felt it slow down in the beginning of October, where traditionally it really slows down closer to Thanksgiving.

Brian Huang sales manager, City Connections Realty
The overall market has strength in prime locations, but we are seeing some negotiability in "up-and-coming" areas. We've also had more interest in larger apartments than last year.

Jonathan Miller director of research, Radar Logic
There is modest appreciation based on median sale price, a relatively tight listing discount and the normal number of days on market so buyers and sellers seem to be in sync.

Because of all the turmoil on Wall Street and the discussion of lower bonuses, we're expecting to see an expansion of marketing times and some cooling off of the elevated activity. But, we're still seeing a lot of activity.

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November 2007 The borough in a bubble Residential market holds steady, but first-time buyers feel pinch By Lauren Elkies The residential real estate market is doing well, according to real estate professionals.…... Read more >

November 2007
The borough in a bubble

Residential market holds steady, but first-time buyers feel pinch
By Lauren Elkies

The residential real estate market is doing well, according to real estate professionals.

As of last month, serious buyers were being more cautious but appeared to have shrugged off concerns over the tightening lending standards that emerged late this summer.

"What's happening in the rest of the country is not happening in New York," said Brown Harris Stevens President Hall Willkie.

The market held relatively steady in the third quarter, according to the most recent Prudential Douglas Elliman report available at press time. The average sales price increased 2.7 percent to $1.37 million compared to the prior quarter, and inventory dropped 0.6 percent to 5,204 apartments on the market.

The number of sales did drop somewhat, however, down
11.2 percent to 3,499 completed deals during the third quarter. The number of days on the market also increased 4.4 percent to 123 days.

Still, the local market is faring well compared to the national market. At the beginning of September, the U.S. median new housing price was, for example, down 7.5 percent from the year before, the biggest drop since 1970, and the number of purchases was at its lowest point in seven years, according to the Commerce Department. The Manhattan median price was up 2.3 percent in the same year-over-year period.

In Manhattan, buyers are asking probing questions about the market, which is actually a "healthy" thing, Willkie said.

But the scrutiny and questioning are not slowing down purchases, he added.

Stan Ponte, president of Coldwell Banker Hunt Kennedy's Previews division, which focuses on luxury marketing, had a similar perspective.

"It's forced a kind of conservatism, which isn't bad," said Ponte. "There can be some short-term pain, but it's gone from kind of a speculative buyer to a more thoughtful buyer market."

But some brokers said that effects of the mortgage crisis are evident among first-time buyers.

"We're seeing the weakness in the one-bedroom market east of Third Avenue," said Frederick Peters, president of Warburg Realty. "I think those buyers tend to be first-time buyers, and they tend to be more impacted by what's going on with mortgages."

Tighter lending standards are also hindering purchases by buyers who like to fly by the seat of their pants.

"The 10 percent-down, high-income, low-asset buyer is pretty much an extinct animal in New York," Ponte said. "Banks are not approving those loans, and the buyers are reassessing what they can look at."

But in many cases, serious buyers are just becoming more serious.

Ponte said, "We have fewer showings, but those showings are more qualified and are resulting in a higher ratio of second showings."

Requests for appraisals are not down, said appraiser Jonathan Miller, executive vice president and director of research at Radar Logic.

"As near as I can tell, contract activity as opposed to this time last year is a little bit higher," Miller said last month. "But it's less than what we saw over the summer, so I guess what I'd say is, we're not seeing a significant impact from the Wall Street credit situation yet."

Inventory increased in September, when there were 5,490 units (co-ops, condos and townhouses) on the market; in August, there were 4,897 homes on the market, according to Miller's research. The overall increase was 12.7 percent.

The August-to-September uptick is not unusual as sellers gear up for the fall season.

"Four out of the last five years, inventory increased from August to September," Miller said.

The number of homes on the market is still down an impressive 32 percent from last year, however.

Real estate brokers have speculated that the credit crunch has benefited the city's rental market because more and more would-be buyers are taking rentals upon realizing they can no longer afford to buy.

But rents averaged less, and the vacancy rate edged slightly higher in September than in the two months prior. The average rent for studios through three-bedrooms was $3,260 in September, down from $3,295 in August and $3,392 in July, according to data from Citi Habitats. September's vacancy rate was 1 percent versus 0.85 in August and 0.81 in July.

Despite recent largely positive reports and feedback from brokers, the city's residential market might not be out of the woods yet.

It could be in the fourth quarter when Manhattan's residential real estate market sees the tangible effects of the credit crisis.

"We'll see somewhat lower transaction activity in the fourth quarter" due to "credit
tightening for purchasers and bonus concerns," Miller said.

Even Mayor Michael Bloomberg expressed pessimism about the market. Bloomberg said real estate prices would drop, but not "as much as any of the other places in the country because here, people don't build or buy on spec," according to the New York Post. "They build and buy and rent to live in them. And so, there's much more stability here."

 

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October 2007 REBNY portal: City's biggest one-stop shop opens on Web Real Estate Board of New York gets most firms on board; Corcoran and Elliman still won't enter portal By Lauren Elkies Manhattan homebuyers…... Read more >

October 2007
REBNY portal: City's biggest one-stop shop opens on Web

Real Estate Board of New York gets most firms on board; Corcoran and Elliman still won't enter portal
By Lauren Elkies

Manhattan homebuyers now have free access to thousands of exclusive real estate listings on a single Web site, launched by the Real Estate Board of New York after a long fight with some of its members.

The trade group unveiled ResidentialNYC.com, which has listings from 60 of its member firms, last month. It now lists about 3,000 properties.

The advantage, says REBNY president Steven Spinola, is that the site allows house hunters to view a concentration of listings, bypassing classified ads and other Web listings, some of which may not be legitimate.

"They are exclusive listings. They are real listings," he said.

ResidentialNYC.com is a Manhattan-centric site, and its roster now posts roughly 40 percent of all exclusive listings in Manhattan, Spinola said. The site has a sizable number of listings in Brooklyn and a few in Queens and the Bronx.

Brown Harris Stevens, Halstead Property, Sotheby's International Realty, Stribling & Associates and Warburg Realty Partnership are among the major firms now using the site, which saw some controversy when smaller firms balked at the initial price tag.

A number of firms declined to participate, including residential heavyweights the Corcoran Group and Prudential Douglas Elliman. The two firms accounted for 60 percent of Manhattan listings among the 10 biggest firms last year, according to a survey by The Real Deal.¬

Corcoran and Elliman released similar statements about their decisions, saying, essentially, thanks, but no thanks, at least for now.

The decision to stand on the sidelines drew a less-than-sympathetic response from Michele Kleier, president and chairman of Gumley Haft Kleier, whose firm is offering listings to the portal site.

"It's their loss," she said. Kleier said the decision means more work for consumers who will have to go to each company's Web site to view their listings.

Citi Habitats, Bellmarc Realty and Bond New York also declined to join the portal, which is powered by real estate search engine Trulia.

Citi Habitats declined to comment.

"We really felt that it wasn't going to make an impact in the marketplace," said Neil Binder, principal and co-founder of Bellmarc Realty. He criticized REBNY for not aggressively marketing the site prior to its launch. Like Corcoran and Elliman, Binder said he reserves the right to join at a later date.

Spinola said REBNY will be launching a $1 million marketing campaign over the next year. Funding will come from firm initiation fees and annual dues. The fee for participation ranges from $2,500 to $12,500, depending on company size, plus an annual $100 per-agent fee, which Spinola said will go toward advertisements and site operation. REBNY does not intend to make a profit from the site, Spinola said.

Bruno Ricciotti, co-founder of Bond New York, said, "There's a risk of redundancy at this point." A number of classified outlets already blanket the market, most notably the New York Times and Craigslist. "I have a hunch that it will turn out great for everybody, but I want to see how it works first."

While the portal is a product of the city's biggest real estate trade organization, start-ups exist that perform some of the same functions. StreetEasy.com, for example, cobbles together agents' listings through direct feeds from brokerages as well as individual firm Web sites. Like ResidentialNYC.com, StreetEasy.com lists only exclusives and does not accept for-sale-by-owner listings.

ResidentialNYC.com allows prospective buyers to search by various criteria, from property type to attended or unattended lobby. With two clicks, the consumer is brought directly to the individual firm's online posting.

Property shoppers can sign up to receive e-mail alerts of new and sold listings, among other resources.

"What benefits the consumer benefits us," said Frederick Peters of Warburg and REBNY residential committee co-chair.

Participating companies cannot pick and choose which listings get posted; they all are, REBNY's Spinola said. To keep everyone on the same playing field, given all other search criteria being equal, the order in which listings pop up has been randomized.

The majority of listings are for-sale properties rather than rentals, which are often done on a non-exclusive basis. The dearth of exclusive rental deals on the site is exacerbated by the fact that Citi Habitats, the city's biggest rental company, declined to participate.

Spinola said some buyer's brokers have contested the site because it excludes brokers like them who do not maintain their own listings.

When ResidentialNYC.com officially debuted on Sept. 28, Manhattan had 2,231 homes for sale; 564 for rent; and 2,732 properties recently sold.

In Brooklyn, there were 474 homes for sale; 35 rentals; and 5,376 recently sold. The Bronx had 24 homes for sale; seven for rent; and 1,465 sold. In Queens, 21 were for sale; one was for rent; and 7,989 had recently been sold.

Spinola mentioned that viewers of ResidentialNYC.com will not be bombarded with advertisements. Seventy to 80 percent of the home page is dedicated to real estate information, and the remainder will be available for advertising ancillary services, not listings or broker ads. And there will be no pop-up ads.

"It's clean, concise, accurate," said Diane Ramirez of Halstead Property and a REBNY residential committee co-chair. REBNY is creating a new board to provide oversight.

Meanwhile, the same week REBNY's portal was unveiled, the New York Times introduced a mobile component to its real estate classifieds. Some observers have said that the Times stands to lose out on advertising revenue if brokers start to rely on ResidentialNYC.com rather than placing property ads in the Times.

The Times' feature will allow people to view properties on their mobile devices and will send listings from the print version of the newspaper or Web to their mobile device.

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October 2007 Credit crunch: Much ado about (almost) nothing Third-quarter numbers show Manhattan residential market still healthy By Lauren Elkies While residential buyers and sellers question the fate…... Read more >

October 2007
Credit crunch: Much ado about (almost) nothing
Third-quarter numbers show Manhattan residential market still healthy
By Lauren Elkies

While residential buyers and sellers question the fate of the real estate market, some brokers report that in Manhattan it's much ado about (almost) nothing, at least in the short run.

"The credit crunch is expected to temper sales activity as tighter underwriting standards knock some people out of the market," said Jonathan Miller, executive vice president and director of research for Radar Logic, which reached a deal last month to purchase Miller Samuel, the residential real estate appraisal firm co-founded by Miller in 1986. "However, to date, there is no real evidence that sales activity is down relative to typical August/September market periods."

Sellers are still selling and buyers are still buying.

In the third quarter, the number of sales decreased 11.2 percent to 3,499 from the second quarter, but rose 65.6 percent from the third quarter of 2006, according to data prepared by Miller for Prudential Douglas Elliman. The average sales price saw a 2.7 percent uptick to $1.37 million from the second quarter and a 6.3 percent increase from the third quarter of 2006.

Fall came on the heels of a solid August when demand continued to chip away at inventory.

Co-op and condo units and townhouses on the market were "all down from last year, but they're coming from a high place," Miller said. The number of unsold Manhattan co-op units dropped by 41.9 percent to 2,077 in August; condos decreased 31.2 percent to 2,569; and townhouses dropped 46.8 percent to 251, Miller found. Together, they sunk year-over-year to 4,897 units from 7,784 units, a 37.1 percent decline.

There was little change in co-op and condo inventory between the second and third quarters, the Elliman statistics indicate, but together they dropped 31.7 percent from a year earlier.

Barak Dunayer, president and founder of Barak Realty, said that business has been on track.

"In New York we really don't see that much of a difference," Dunayer said.

But not all market watchdogs have such an optimistic view.

"It's very simple: As of the beginning of September, the market has totally stopped creating the level of activity as it had before ... and it's not because of the Jewish holidays," said Neil Binder, principal and co-founder of Bellmarc Realty.

Open house attendance has fallen off, some brokers say.

At Warburg Realty Partnership, attendance gradually decreased over the summer months from a high of 60 in the spring to between eight and 20 last month, the company's data indicates.

Also in September, Elliman saw a sharp drop in attendance at open houses. An average of six to 10 people showed up at open houses last month as opposed to 15 to 20 a year earlier, said Steven James, president of the Manhattan brokerage division at Elliman. The percentage of offers, however, was about 20 percent higher last month, James said. In some cases there were even bidding wars. On the flip side, he noted that a few buyers got cold feet mid-deal, which he attributed to the mortgage crisis.

Binder said that at the start of September, closings were on track and open houses were "getting decent activity."

But he added that open house numbers are not the same as transaction numbers. "No one's putting money down on the table," he said.

Some price points are seeing more activity than others.

"High-priced stuff is starting to have problems," Binder said, referring to properties starting at $3 million. Middle-market properties, on the other hand, are surviving because of a much wider buyer pool, he said.

Brokers said they were not seeing asking price reductions last month or homeowners aggressively unloading their apartments into the marketplace in response to the turbulent economy.

Since Wall Street bonuses drive big real estate purchases, should payouts be substantially less this year than last, high-end property sales could suffer.

But concerns about bonuses this year might be overstated since a single-digit cut from last year's record figures would still amount to some of the highest allocated in history, Miller of Radar Logic said. Greater harm could come from public perception of a bad year.

Sales in new developments could be harder hit than resales because of the premium they command and the time the deals take to close. A qualified buyer today could become an unqualified buyer by the time the closing rolls around.

Developers seem to be preparing for the ripple effect of the mortgage crisis as they employ public relations tactics like wining and dining brokers.

Manhattan's real estate market is not expected to take the same beating as markets elsewhere in the country because stringent financial requirements make Manhattan buyers less dependent on mortgages.

Still, a mortgage crisis makes buying real estate a game for cash-rich buyers.

"We're reverting to a higher down payment scenario than we have seen in five years, and I don't see that changing in the immediate future," Miller said.

The Federal Reserve attempted to ameliorate the situation by cutting interest rates by half a point to 4.75 percent last month, but marginal buyers still are likely to be pushed out of the market.

"Across the board, I suspect you won't see the record pace of activity that we saw this year, but I suspect it will be elevated," Miller said.

Brokers speculated that this month sellers would become more realistic about pricing, in turn spurring more sales.

The market "won't tolerate wildly inflated pricing," said Frederick Peters, president of Warburg Realty. "People will want the sense of value because of the credit crunch. I don't think prices will go down. There will just have to be a clear price-to-value ratio more than there was six months ago."

While potential buyers cannot anticipate dramatic markdowns, they may be able to take advantage of market uncertainty by seeking concessions from sellers, such as covering buyers' closing costs.

Not everyone considers the current state of affairs to be a bad thing.

"It's ultimately good for us because it means that once again money is mainly being loaned to people that ought to have money loaned to them," Peters said. "I think that's a stabilizing force in the marketplace."

 

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The Manhattan Real Estate Slump That Wasn’t By TERI KARUSH ROGERS Published: August 19, 2007 IT wasn’t supposed to happen this way.  Just a year ago, as real estate brokers fretted through an…... Read more >

The Manhattan Real Estate Slump That Wasn’t

By TERI KARUSH ROGERS
Published: August 19, 2007

IT wasn’t supposed to happen this way.  Just a year ago, as real estate brokers fretted through an ominously quiet third quarter, many Manhattanites waited for the housing market to reverse its madcap ascent and fall into line with the rest of the country.

But something happened on the way to the Great Manhattan Housing Slump. After what brokers optimistically termed a “pause” in the second half of 2006, buyers swarmed into the market. The torrent was so intense that by the end of this past June, it was clear that an astonishing gulf had opened up between Manhattan and nearly everywhere else.

On the national level, sales of existing homes slowed by 17 percent in the second quarter of 2007, compared with the second quarter of 2006, while inventory swelled by 16 percent, according to figures provided by the National Association of Realtors. New homes fared even worse: they fell by almost 19 percent, according to Commerce Department figures.

In Manhattan, by comparison, sales of new and existing apartments more than doubled. In a trend that could shift quickly in light of the recent problems in the credit and stock markets, inventory shed a third of its bulk. It dropped to 5,237 units, despite the influx of several thousand new condos, according to Miller Samuel Inc., the Manhattan appraisal company

Prices have been starkly different as well. By last month, the national picture was so dire that Angelo R. Mozilo, the chairman and chief executive of Countrywide Financial, the country’s largest mortgage lender, said things had not been so bleak since the Depression.

Cut to Manhattan. After a boom with annual price increases of 20 percent or more ended in mid-2005, prices have continued to rise over all, but not as sharply. In the second quarter of 2007, Miller Samuel said the average sale price of a Manhattan studio climbed 16.5 percent compared with the second quarter of 2005. The average for a one-bedroom climbed by 18.4 percent and a two-bedroom by 5.9 percent.

Apartments with three bedrooms, which make up about 6 percent of the market but appeal to an ever-more-moneyed class of buyers, rose by 17.9 percent in the same period.

Major brokerages, including Halstead Property, Bellmarc Realty, Brown Harris Stevens, Prudential Douglas Elliman and the Corcoran Group, say they are recording sales and profits that rival boom-time results. In fact, Douglas Elliman and Corcoran predict that this will be their most lucrative year by far.
Whether this momentum can be sustained remains to be seen, particularly in light of the recent gyrations in the debt market, which have led to a reduction in the availability of large mortgages and to an increase in their rates. A deepening credit-market crisis and national housing slump could squeeze the economy, the stock market and bonus pools.

“For the first time in over a year, there is some negative talk — about the credit markets and whether or not this will permeate the New York City real estate market,” said Pamela Liebman, president of Corcoran. “As of right now, it hasn’t. There has been no slowdown.” She said the biggest concern among her agents is finding enough inventory to satisfy demand.

But a buying binge alone does not a housing boom make. “I’m still not characterizing the market right now as a housing boom except in the upper echelon,” said Jonathan Miller, president of Miller Samuel.
So how has Manhattan (and, to a lesser extent, sought-after pockets of Brooklyn) managed to avoid a slump?

“Obviously, the market was helped first by the rumor and the reality of bonus money,” said Frederick W. Peters, president of Warburg Realty. He was referring to the fourth straight year of substantial bonus increases, particularly on Wall Street, that along with a rising stock market helped push buyers off the sidelines at the end of 2006 and caused some agents to cancel their winter vacations.

“But I also think we’re just in one of those demographic upswing periods,” Mr. Peters added. “More people are moving into the city, fewer people are moving out, and the rental market got much tighter over the course of 2006, which once again made buying a more attractive option. You put all those things together, and the market sort of entered the narrow part of the hourglass.”

There were other factors to consider, too. Tourism is at record highs, and the local economy is doing well in general. And it’s nearly as hard to find premium office space or a spot in private school as it is to find a family-size apartment.

But that’s exactly what more and more families have set their sights on.

It has been years since Samantha Kleier Forbes, a broker at Gumley Haft Kleier, lost a client to the suburbs. “My last casualty was in ’04,” she said. As two-career couples work longer hours and as the city grows safer and more family-friendly, there is a big demand for large apartments like Classic 6’s — a two-bedroom apartment with living room, dining room, kitchen and maid’s room (where children can be found bunking like sailors).

Families who want to stay, brokers say, are only one segment of the more stratified and well-heeled masses clamoring for a piece of Manhattan. While the dollar’s seemingly endless slide may have crimped the foreign vacation plans of many Americans, the purchasing power of Europeans has strengthened. They are increasingly matched, if not outmatched, by buyers from countries like China and India. And foreign buyers find Manhattan real estate very appealing when they compare prices in other large international cities like London.

“I’ve had 20 percent more business from international clients in the past couple of years,” said Sallie Stern, a senior vice president and managing director of Brown Harris Stevens. “They probably account for 30 to 35 percent. It’s a world market now.”

Shaun Osher, the chief executive of CORE Group Marketing, which is handling 11 condominium projects in Manhattan, said the number of foreign apartment-seekers had doubled since the end of 2005. Foreign buyers now constitute 5 to 10 percent of the sales in the buildings marketed by his firms.

“When you look at hotel rates and what it costs to come into Manhattan, it makes sense now to buy a pied-à-terre,” he said.

Besides foreign buyers, brokers say, more parents are snapping up apartments for their children, and some retirees are choosing Manhattan over the likes of Boca Raton.

“The baby boomer generation isn’t ready to give up and live in a swamp,” said Darren Sukenik, an executive vice president of Prudential Douglas Elliman. In fact, they are living the lives their nearby children would like to lead if only they weren’t working so hard, he said.

Meanwhile, renters have emerged as a force in the market, particularly for entry-level apartments. “Rents are rising again, and that pushes people back into the condo and co-op market if they have more than a one- or two-year time frame for living in Manhattan,” said Stephen G. Kliegerman, the executive director of marketing for new developments at Halstead Property.

Fanning the flames have been job and population growth, historically low interest rates and a trove of personal wealth minted by hedge funds, private equity firms and, to a lesser extent, the investment banks that serve them. Add to that the psychological comfort of knowing that Manhattan flourished after the Sept. 11 terrorist attacks, and further, that it appears to have shrugged off a national housing slump.
Even the condo glut that so many real estate executives feared has turned out instead to be a boon of sorts. “If we didn’t have new development coming on at the pace we did, we’d have a chronic shortage across all sectors, and we’d see 20 percent price growth,” said Mr. Miller, the appraiser.

Mr. Peters of Warburg Realty agreed. “You can’t even imagine how awful it would be,” he said. On the other hand, he added, things may feel pretty awful already for buyers who want a prewar apartment, since inventory in this sector continues to evaporate. In the last two years, co-ops, about half of which were built before World War II, have slipped from 63 percent of the market to 47 percent as new condos have been built, Miller Samuel said.

“There are so many new units coming on the market and being sold, but the real heart and soul of the co-op market is really depleted,” said Barbara Fox, the president of the Fox Residential Group, a Manhattan brokerage.

Consequently, brokers say, many prewar apartments in good condition, along with family-size apartments of any vintage, are being snatched up in bidding wars whose aggressiveness outrivals those of two years ago.

“The new rule is that there are no rules, and when you’re lying bleeding on your way to the emergency room, you’re still shouting, ‘Higher offer, higher offer!’ ” said Julie Friedman, a senior associate broker at Bellmarc.

She was among the many brokers who said that “best and final” offers have largely become neither, with buyers and sellers routinely negotiating after another bid has been accepted. “You remind sellers that there is a moral component, but my duty is to get the highest amount, and ‘moral’ and ‘the highest amount’ don’t necessarily overlap,” she said.

Some brokers complained that the demise of the sealed bid, which has been replaced over the last two or three years by e-mail offers to the seller’s agent, has further undermined fair play. “Buyers don’t trust them as much,” said Michele Kleier, president of Gumley Haft Kleier.

Whether Manhattan continues to be the land the slump forgot or is merely sunning itself before a hurricane is something of a guess. A strengthening dollar, a severe terrorist attack or a national economy hobbled by housing market woes could inflict blows of varying strengths.

More immediate is the worry about the availability of credit. “While I don’t think we were propped up to the extent other markets were by subprime and adjustable-rate mortgages, it does make credit hard to get for everyone to some degree,” said Gregory J. Heym, an economist for Brown Harris Stevens and Halstead Property. “Most people are probably expecting mortgages to be tougher to get.”

Mortgage lenders everywhere are going back to pre-boom lending standards, so obtaining a mortgage is harder for buyers with pockmarked credit or sketchy employment. But there is no panic over rising mortgage rates on jumbo loans (those exceeding $417,000), at least not now.

Large lenders like Chase and HSBC that typically sell mortgages after they make them can no longer do so because the credit crisis has dried up the secondary market, said Jeffrey Appel, a senior vice president and the director of new development financing at the Preferred Empire Mortgage Company in New York. Many large institutional lenders have raised their rates as a hedge against uncertainty, but rates at smaller regional savings banks, the so-called portfolio lenders who hang on to their loans, have hardly budged.

Last Monday, Melissa L. Cohn, the president of the Manhattan Mortgage Company, the largest residential mortgage broker in the New York, New Jersey and Connecticut, said her best rate on a 30-year $1 million mortgage was 6 7/8 percent, offered by a portfolio lender. And her worst rate, offered by a lender that sells mortgages on the secondary market, was 8 3/8 percent.

“Despite this incredible hysteria,” Ms. Cohn said, “there’s plenty of money for qualified borrowers.”

The credit-market meltdown could yet cloud Manhattan’s real estate prospects because of stock-market jitters. And an end to the leveraged buyout boom, if that happens, could trigger layoffs on Wall Street and eat away at bonuses.

But the fiscal year is far enough along that financial services workers can expect gains of 10 to 15 percent when bonus season rolls around later this year, said Alan Johnson, the managing director of Johnson Associates, a Wall Street compensation consultant. The real pain, if there is any to be felt, would come in the 2008-09 bonus season, he said, and a year or two later for private equity firms, which typically make their profits several years after a takeover.

“Pay is going to probably drop, but if it’s dropping from a really, really high level, we’re probably not going to have any charity dinners for these people,” Mr. Johnson said.

By then, too, the flow of new development is expected to slow significantly, judging from the dwindling number of construction permits filed this year. To the extent Manhattan’s housing market is threatened by a weak national economy and by declining bonuses, said Mr. Miller of Miller Samuel, “then the fact that we have a lower level of supply coming on would help keep the market from correcting.”

Neil Binder, a principal in Bellmarc Realty and a 30-year industry veteran, typically views upturns with a jaundiced eye. But in a residential market with tight supply and intense demand, he doesn’t see Manhattan’s real estate karma changing anytime soon, even in the face of mortgage-market turmoil.

“My brokers are saying their biggest frustration is to have buyers when there’s no product and that there’s nothing out there but new construction,” Mr. Binder said. “We may have bumps, but I don’t feel the underpinnings are weakening. My biggest problem this month is that I have all my salespeople taking vacations because they made so much money. My East Side office is a ghost town.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Cracks may appear in Manhattan apartment market Mon Aug 13, 2007 10:47AM EDT By Ilaina Jonas NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers…... Read more >

Cracks may appear in Manhattan apartment market

Mon Aug 13, 2007 10:47AM EDT
By Ilaina Jonas

NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were vying for a luxury apartment the Manhattan real estate broker was selling for a client at a $4 million asking price.
On July 27, the end of a week when the Standard & Poor's 500 stock index suffer its worst one-week percentage drop since 2002, she called the winning bidder with the good news. The next day he withdrew his bid for the Upper West Side home.

There is no sign of a downturn in sales figures for now, but Kory's experience may be an early sign of weakness in the robust Manhattan market that could be vulnerable to struggling stock markets, hedge fund losses and newly cautious lenders.

"I guess he called his mortgage person and found it wasn't going to be as easy as he thought for him to get what he wanted. He got nervous and decided not to proceed," said Kory, senior vice president of the Corcoran Group.

She also suspects he may have feared his bonus was going to be hurt by the market's slide. The bidder, like much of her clientele, works in the financial industry.

Manhattan is among the few U.S. real estate markets to remain buoyant. Elsewhere, demand for homes has slackened, numbers of homes for sale have swelled, and in an increasing number of markets, prices have declined.

Fat Wall Street bonuses handed out at the beginning of this year, a relatively strong New York economy, and foreign buying fueled by a weaker dollar, have driven Manhattan apartment prices higher. In the second quarter, the median price of a Manhattan apartment rose 1.7 percent to a record $895,000.

Other nearby markets with roots in the financial community, such as Greenwich, Connecticut -- the headquarters for many hedge funds -- and the summer playground of the Hamptons on Long Island, have also been resilient.

Real estate experts say the size of bonuses may be crucial and the market may meander until it becomes clear whether those sums will be slashed from the record amounts handed out in early 2007 -- an estimated $23.9 billion.

"They stimulate demand just because after a good bonus year there is so much more activity in the first few months of the year that sets the tone for the spring market," said Jonathan Miller, chief executive of appraisal firm Miller Samuel Inc.

"If this situation continues to erode ... I think compensation would be more impacted in '09 than '08, just because we've already had a good year," Miller said.

Credit tightening stemming from bad loans to less-than-creditworthy home buyers also has infected the market for mortgages for borrowers with better standing.

Given the expense of buying an apartment in Manhattan, many buyers use jumbo mortgages, defined as those over $417,000. Some risk-averse home lenders are curbing their jumbo lending or raising rates.

Jumbo mortgage rates are about a half a percentage point higher than they should be, said Eric Appelbaum, president and owner of Apple Mortgage. "If this isn't corrected, I think it could put a serous damper on two- or three- or four-bedroom apartments in the city," he said.
But real estate experts said it will take more than a couple of weeks of financial instability to put the brakes on Manhattan real estate.

And August is a slow time for real estate, as Manhattan's well-off head to summer retreats in places like the Hamptons, the Catskills and Martha's Vineyard. Any slowdown will be difficult to detect for now, brokers said.

"I still have people signing contracts, but it will be much easier to tell if there's impact a month from now," said Frederick Peters, president of Warburg Realty.

TIGHT SUPPLY, CO-OP BOARDS

A limited supply of properties in Manhattan and related markets has helped keep prices up.
"It's all about the inventory," said Andrew Saunders, senior vice president of Sotheby's International Realty in Bridgehampton. "In the $5 million-and-up market there is just not a lot."

In the Hamptons, tight rules about what can be built and the desire to be near the beach has limited supply. Meanwhile, the Greenwich market is relatively small with only about 900 sales a year, said David Ogilvy, president of David Ogilvy & Associates, a Christie's Great Estates affiliate. Prices for residential properties in Greenwich run from $600,000 to about $39 million, and many people buy with cash.

"Some of these hedge-fund people have made so much money, they're not looking to sell their homes," Ogilvy said. "If they have to cut back ... they don't use their jets."

Manhattan has another layer of protection: co-op boards. About two thirds of all the non-rental residential units in Manhattan are co-operative apartments.

In a co-op, the apartment building becomes a corporation. Instead of owning their individual apartments, buyers own shares in the corporations, which are governed by boards.

The boards can demand buyers put a large percentage of their own money down, often 25 to 50 percent. In addition to being asked about their current assets and income, buyers may also be asked about their career prospects.

"Most co-ops have always held a more stringent underwriting standard than even the most stringent bank," Appelbaum said.
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Cracks may appear in Manhattan apartment market Aug 12 2007 10:10AM EDT By Ilaina Jonas NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were…... Read more >

Cracks may appear in Manhattan apartment market
Aug 12 2007 10:10AM EDT
By Ilaina Jonas

NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were vying for a luxury apartment the Manhattan real estate broker was selling for a client at a $4 million asking price.
On July 27, the end of a week when the Standard Poor's 500 stock index suffer its worst one-week percentage drop since 2002, she called the winning bidder with the good news. The next day he withdrew his bid for the Upper West Side home.

There is no sign of a downturn in sales figures for now, but Kory's experience may be an early sign of weakness in the robust Manhattan market that could be vulnerable to struggling stock markets, hedge fun losses and newly cautious lenders.

"I guess he called his mortgage person and found it wasn't going to be as easy as he thought for him to get what he wanted. He got nervous and decided not to proceed," said Kory, senior vice president of the Corcoran Group.

She also suspects he may have feared his bonus was going to be hurt by the market's slide. The bidder, like much of her clientele, works in the financial industry.

Manhattan is among the few U.S. real estate markets to remain buoyant. Elsewhere, demand for homes has slackened, numbers of homes for sale have swelled, and in an increasing number of markets, prices have declined.

Fat Wall Street bonuses handed out at the beginning of this year, a relatively strong New York economy, and foreign buying fueled by a weaker dollar, have driven Manhattan apartment prices higher. In the second quarter, the median price of a Manhattan apartment rose 1.7 percent to a record $895,000.
Other nearby markets with roots in the financial community, such as Greenwich, Connecticut -- the headquarters for many hedge funds -- and the summer playground of the Hamptons on Long Island, have also been resilient.

Real estate experts say the size of bonuses may be crucial and the market may meander until it becomes clear whether those sums will be slashed from the record amounts handed out in early 2007, an estimated $23.9 billion.

"They stimulate demand just because after a good bonus year there is so much more activity in the first few months of the year that sets the tone for the spring market," said Jonathan Miller, chief executive, of appraisal firm Miller Samuel Inc.

"If this situation continues to erode... I think compensation would be more impacted in '09 than '08, just because we've already had a good year," Miller said.

Credit tightening stemming from bad loans to less-than-creditworthy home buyers also has infected the market for mortgages for borrowers with better standing.

Given the expense of buying an apartment in Manhattan, many buyers use jumbo mortgages, defined as those over $417,000. Some risk-averse home lenders are curbing their jumbo lending or raising rates.
Jumbo mortgage rates are about a half a percentage point higher than they should be, said Eric Appelbaum, president and owner of Apple Mortgage. "If this isn't corrected, I think it could put a serous damper on two- or three-, or four-bedroom apartments in the city," he said.

But real estate experts said it will take more than a couple of weeks of financial instability to put the brakes on Manhattan real estate.

And August is a slow time for real estate, as Manhattan's well-off head to summer retreats in places like the Hamptons, the Catskills and Martha's Vineyard. Any slowdown will be difficult to detect for now, brokers said.

"I still have people signing contracts, but it will be much easier to tell if there's impact a month from now," said Frederick Peters, president of Warburg Realty.

TIGHT SUPPLY, CO-OP BOARDS
A limited supply of properties in Manhattan and related markets has helped keep prices up.
"It's all about the inventory," said Andrew Saunders, senior vice president of Sotheby's International Realty in Bridgehampton. "In the $5 million-and-up market there is just not a lot."

In the Hamptons, tight rules about what can be built and the desire to be near the beach has limited supply. Meanwhile, the Greenwich market is relatively small with only about 900 sales a year, said David Ogilvy, president of David Ogilvy Associates, a Christie's Great Estates affiliate. Prices for residential properties in Greenwich run from $600,000 to about $39 million, and many people buy with cash.

"Some of these hedge fund people have made so much money, they're not looking to sell their homes," Ogilvy said. "If they have to cut back... they don't use their jets."

Manhattan has another layer of protection: co-op boards. About two thirds of all the non-rental residential units in Manhattan are co-operative apartments.

In a co-op, the apartment building becomes a corporation. Instead of owning their individual apartments, buyers own shares in the corporations, which are governed by boards.

The boards can demand buyers put a large percentage of their own money down, often 25 to 50 percent. In addition to being asked about their current assets and income, buyers may also be asked about their career prospects.

"Most co-ops have always held a more stringent underwriting standard than even the most stringent bank," Appelbaum said.

 

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May 2007 Q & A: Going for brokerage Firm management walk fine line in quest for profits By Melissa Dehncke-McGill If location, location, location is the core cliché of real estate success, the second…... Read more >

May 2007
Q & A: Going for brokerage
Firm management walk fine line in quest for profits
By Melissa Dehncke-McGill
If location, location, location is the core cliché of real estate success, the second is at least equally sound: Watch the bottom line. The Real Deal spoke to chief executives of Manhattan's top residential firms about running a brokerage in today's market.

Agents constantly push for better commission splits, and technology, space and advertising overhead costs continue to mount. Keeping operating costs down and revenue up is a tough proposition for any business, but it's especially hard in the competitive Manhattan real estate market.

Of course, brokerage heads are finding more ways to make money too, including the "gold rush" of new condo developments. Other firms are recouping some costs of doing business with new agent fees.

"It has never been overly profitable; it's a razor-thin business," says Neil Binder, principal and co-founder of Bellmarc.

Barak Dunayer
founder and president, Barak Realty

How profitable is the brokerage business now, and how has that changed over time?

If you know what you are doing, it's very profitable. Because of the intense competition, if you don't know how to manage your overhead, it's less profitable. A lot of people go from agents to brokers, but running a company is a completely different business. You are managing human resources, cash flow and administrative positions. A lot of people are coming into the business and opening their own shops and have no idea.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

That is huge. I think $1,500 per agent is outrageous. I think a lot of agents are not happy about that. It's going to get a lot of resistance. They still have the traditional commission split model, so they can have their cake and eat it too.

How important is marketing new condo development in the brokerage business today, and how has that changed in recent years?

That's been the gold rush of last five years. People got extremely wealthy marketing new developments. If it's a successful project, it's like selling pizza slices. On the other hand, there are firms that have entered into bad projects that were not successful. There is a huge risk in putting so much into marketing a new project. A lot of time and resources can be concentrated on that project, and if it's not successful and you neglect other areas, you can be in trouble. You have to select carefully and turn down bad projects.

What are the major costs to run a brokerage, and how has that changed over time?

Office rents are up, advertising rates go up every year, and payroll -- you have to keep managers on a salary.

What about desk costs?

We take the 30 desks at Barak Realty -- overall overhead plus phones, electricity, paper and administrative costs -- and divide it by 30, and we get the cost to run the desk. We say to agents that at a minimum assume $50,000 to run a desk. If the agent is on a 50/50 commission split, an agent at minimum has to make a $100,000 to break even, to make a minimum to maintain a desk. A handful of firms have popped up recently offering 100 percent commissions to agents, instead of a typical split with the brokerage. In exchange, the agents have to pay a monthly service fee to the brokerage.

Do you see this type of business model increasing in New York City?

The firms with fees have passed the risk of cash flow management to the agents. I don't think the agents are equipped to assume that risk. It's a nice novelty, though.

For the brokerages that follow the traditional commission model, what trends are you seeing in terms of commission splits?

I think as desk costs and overhead costs go up, the people in the middle of those firms who are at 50 to 55 percent commission splits are the bread and butter for the firms. That's how the firm makes money. The higher commission splits have a lot of activity, but the bottom line is that the firm makes much more money on the people in the middle.

Do you think you'll continue to see the biggest firms -- Corcoran and Elliman -- continue to get bigger, which it seems they certainly have in the past couple of years?

I think so. They are going to get bigger; I don't know if they'll get better, because it's harder to do quality control, but they will certainly get bigger. The key is quality control, which is extremely difficult.

Is there an overrated part of the brokerage business right now?

One thing the biggest firms sell you is the Web site. I think it's the most overrated part of the pitch, a lot of smoke and mirrors there. Mainly because 90 percent of the time property is sold broker to broker -- there's a seller broker and buyer broker.

How important is office location and spending money on an office? Is it important to have a retail presence?

I think it's very important to have some kind of retail presence. We are planning to open a storefront on the Upper East Side next year. But you have to look at it as half is rent for the space and the other is for advertising.

Dottie Herman
president and CEO, Prudential Douglas Elliman

What is the most interesting trend you see in the New York City residential brokerage business right now?

Ten to 15 years ago, if you did really well, a broker might decide to open his or her own company. Now the cost of opening one's own shop is astronomical, and it is prohibitive to do that and give the service that big companies provide, so sales agents are basically becoming a business within a business. They have their group or team that they run within the context of the larger company. In New York City it is new that agents are branding themselves a bit. Five or six years ago you would never see an agent's name in an ad.

How profitable is the brokerage business now, and how has that changed over time?

Traditionally the real estate brokerage business has been a very low-margin business, and it really still is. The costs are a lot more now with computers and technology. Years ago there was no secretary, and the demands of the consumer were a lot less. If anything it's a declining margin. That's why companies look for other avenues of income.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

At the end of the day I think that the whole industry has changed. The cost of being in business is much greater, and if companies intend to stay in business, they need to pass on some costs.

Are the broker ranks expanding right now or receding?

They're expanding. Being in this business is one of the hardest, most grueling careers, but if you are good at what you do, it looks easy.

Neil Binder
principal and co-founder, Bellmarc

What is the most interesting trend you see in the New York City residential brokerage business right now?

One trend is a much greater tendency toward image marketing rather than portraying apartments. [Some firms] would rather portray an awareness of who they are as an identity, as a participant in the game, rather than showing a slew of apartments in the newspaper for sale.

What are the major costs and how has that changed over time? What about desk costs?

Technology has become a larger cost year by year. The Internet is a huge expense. You can't just put up a site; you have to manage the site, manage the content, usability and the degree of services the site offers. My Internet consulting firm views me as one of its best friends. It's a marriage between in-house and out. We have a design development person who is not internal who does design for us. We also have an internal computer department of four people.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

Every firm has certain kinds of expenses in one form or another that they charge salespeople. This has become back-door income for a lot of companies, but I am not in favor of it, and it is not in our plans to do it. Some charge a computer fee of $1,500 a year and $1,000 a year for errors and omissions. Those are names given to those expenses; they are just mechanisms to get additional money for the company, in my opinion. At the end of the day, it's more money in my pocket rather than in yours. It's a device used by certain firms in order to tell people they can have a higher commission split because they are not focused on all the ancillary costs that are not being deducted from every deal. Marketing high commission splits but getting more increases in fees is just a device. That's how I read it.

What surprises you most about the brokerage business currently?

How well we are doing. I can't believe how many transactions there are compared with the rest of the country and world. In 1990, many firms went under, so Manhattan does not always do well.

Frederick Peters
president, Warburg Realty Partnership

What is the most interesting trend you see in the New York City residential brokerage business right now?

I think the major trend in recent years has been small companies going out of business or being swallowed up by bigger companies. As with other industries, consolidation seems to be the word of the day.

A handful of firms have popped up recently offering 100 percent commission to agents, instead of a typical split with the brokerage. In exchange, the agents have to pay a monthly service fee to the brokerage. Do you see this type of business model increasing in New York City?

That model requires brokers to focus on running more like a small business. It distracts them from doing what they are likely to do best, which is selling real estate.

How profitable is the new development marketing part of the business compared with regular resale brokerage?

On a unit-per-unit basis, it's probably slightly more profitable. If you are the agent for that building, you get a boatload of exclusives to sell. In one negotiation you can get access to 20, 50 or more exclusives. From the agent's perspective that's extremely desirable.

What trends are you seeing in terms of advertising? In terms of amount spent, design of ads, branding, etc.?

Every year there is less interest in classified advertising. The major trend has been the Internet, and most of us, firms that do significant business, are increasingly interested in directing traffic to our Web site as well as marketing properties and ourselves most effectively.

Are the broker ranks expanding right now or receding? Are firms changing their hiring patterns in general?

I basically urge them not to go into the business. It is a very hard time to become a broker unless you have a big sphere of influence and can get up to speed with information and be committed to surviving a number of months without money. People are exiting the business, and fewer are coming in, and I think that's all to the good.

Do you think you'll continue to see the biggest firms -- Corcoran and Elliman -- continue to get bigger?

Yes, that will continue if you are part of a public company. It is all about year-over-year growth.

Any changes you see ahead in how brokerages will expand their business model?

Throughout the country, there are on-site mortgage services and the one office that does everything. That has never really caught on in New York City. My personal feeling is that the people who do best in any industry are the ones who stay focused. Speaking for myself, I really want to remain a brokerage business. I don't want to be distracted by doing other stuff.

Jim Mazzeo
president, Weichert Realtors Mazzeo Agency

What is the most positive trend you see in the New York City brokerage business?

The industry in the city is more cooperative. The Real Estate Board of New York's regulations requiring members to co-broker their listings has pulled the industry together a bit and standardized some of the ways we do things. It has also increased education and member events, which in general are good things for the industry.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

The larger companies have greater difficulty with advertising because they are unable to monitor each individual ad, and instead of monitoring, they put their agents on a budget. I think that makes it harder for the agent. I approve every ad I run, which actually allows me to run more ads for my agents because I can better monitor the results. I think you will see the larger companies continue to get tougher with their agents on advertising as they continue to try to maximize profits.

Is there an underrated part of the brokerage business right now?

The underrated part is that you really are having a positive effect on people's lives and they most often fare far better from having purchased than not.

Rick Hoffman
regional senior vice president for the East End of Long Island, Corcoran

What percentage of brokers have left the industry in New York?

I haven't seen the ranks diminish out here, but there are fewer coming in as newly licensed agents. We have the same number in the industry; it's just not growing the way it was with new people.

How important is a retail brokerage presence?

Retail is very important. Spending money is important; we have some of the best [retail] offices in the industry out here.

Jerry Weinstein
founder and president, Manhattan Apartments

What is the most interesting trend you see in the New York City residential brokerage business right now?

The most interesting aspect of the brokerage business right now is the motivation of most companies to continue to grow and expand as quickly as they can. This trend has been going on for a number of years and shows no signs of a letup.

What is the most negative trend in the brokerage business?

The most negative trend is that agents forget that they are the brokers of a deal, and the ones who make the deals happen, rather than the idea that they just "show" apartments through open houses and the opening of doors. They are tending to underestimate the value of their own participation in the transaction.

Are the broker ranks expanding right now or receding?

Right now the glamour of the brokerage business has receded, and fewer people are coming into the field. That requires more competition in marketing and hiring techniques. Still, most companies are looking to expand.

Is there an overrated or underrated part of the brokerage business right now?

The overrated part of the business is the continued drive towards luxury as the prime market, in a city that prides itself on the commonality of all.

The underrated part of the business is the steady presence of the rental business as a strong force in the New York real estate market.

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SPRING FEVER THIS AIN’T NO BUBBLE - MANHATTAN LUXURY IS BACK WITH A VENGEANCE By MAX GROSS April 26, 2007 -- Well, that didn’t take long. Whether you saw it as a bubble bursting or a dip or a slowdown,…... Read more >

SPRING FEVER

THIS AIN’T NO BUBBLE - MANHATTAN LUXURY IS BACK WITH A VENGEANCE
By MAX GROSS






April 26, 2007 -- Well, that didn’t take long.

Whether you saw it as a bubble bursting or a dip or a slowdown, whatever it was that was afflicting the housing market in 2006 seems to be over.

No, the market hasn’t quite gone back to those halcyon days when people were making wild-eyed offers on overpriced closets. We haven’t heard any recent reports of buyers slugging it out at an Alphabet City open house. But the high-end market has taken off into a stratosphere never before seen, with buyers going gaga over properties that cost $3 million and up.

Yes, the madness has returned.

Let’s throw out the requisite disclaimers: Interest rates might rise. A recession would hit housing extremely hard. Areas like the Financial District and much of Brooklyn are seeing an incredible amount of new development that will need time to be absorbed.

But consider this: The current Manhattan frenzy feels a lot more solid than the last time the market went into heat. Many recent eye-popping transactions involve buyers paying all cash for co-ops. Such transactions, of course, mean there’s no chance of defaulting on a million-dollar mortgage.

“Seventy percent of the housing stock in New York are co-ops,” says Hall Willkie, president of Brown Harris Stevens. “Co-ops are some of the best buildings in the city and you don’t even know the names of them. Every co-op restricts financing. So what you have is people paying $20 million in cash for an apartment.”

And Willkie and numerous industry insiders we spoke to have seen high-end properties not just selling, but selling for way over their asking prices.

“I’d say it’s much more of a frenzy” now than it was two years ago, says Shaun Osher, CEO of Core Group Marketing.

Osher points to an apartment he sold on West 23rd Street that Core had listed for $6.5 million. “It had been on the market for 3 1/2 or four years with five different brokers,” Osher says.

But shortly after taking it over earlier this year, Core had multiple offers above the asking price. The property went to contract for just under $7 million.

“The difference between now and two years ago is that two years ago the frenzy existed on any property anywhere,” says Pam Liebman, president and CEO of the Corcoran Group. “Today, it’s more of a focused frenzy. It’s really if your property is special, if it offers something unique . . . But where the frenzy exists, it’s just as strong as it was two years ago, and several brokers have told me it’s stronger.”

In the last year, the Corcoran Group saw a 31 percent price increase on lofts larger than 2,500 square feet. Prudential Douglas Elliman saw the price for apartments with four or more bedrooms jump 24.8 percent to an astronomical $8,957,570. And Brown Harris Stevens saw the average price per square foot for apartments with four or more bedrooms soar to $2,208. Last year, it was $1,615.

And if what’s happened in the last few months is any indication, those numbers are moving even higher.

“In December and January . . . we started [telling clients], ‘You have to be prepared to go 5 percent above asking price to get what you want,’” says Frederick Peters, president of Warburg Realty. “Then, more recently, we’ve been saying you have to go 10 percent. Just in the last couple of weeks, a few things have been more like 15 percent.”

“I just won a bid at 158 Mercer,” says Dolly Lenz, vice chairman of Prudential Douglas Elliman. “And the people just had to have it. They said ‘Whatever it takes.’ It was going for $8.9 million, they made an offer of $10 million. They just wanted to be sure it was theirs.”

Sellers have felt free to chuck an accepted offer in favor of a better one. Or they have made lavish demands like a 30 percent down payment. Immediately. In cash. Getting half a million dollars or even $1 million over the asking price is not so unusual.

And new condos like French architect’s Jean Nouvel’s 100 11th Ave. in West Chelsea have started out of the gate asking for $2,000 per square foot. This should hardly come as a surprise; Nouvel’s SoHo building, 40 Mercer, sold out with many units going for significantly more than $2,000 per square foot.
“If you have a three-bedroom in SoHo or TriBeCa,” says broker Darren Sukenik, an executive vice president at Prudential Douglas Elliman, “you can just make up a price and it will sell.”

“My heart is breaking for this one couple I have who have lost so many bidding wars,” says broker Wendy Maitland, a senior vice president at Brown Harris Stevens. “Every single loft that’s a good family loft in the West Village they’ve bid on and they keep getting outbid.”

And the frenzy is hardly limited to the super-trendy neighborhoods. A 3,721-square-foot penthouse above 100th Street listed by the Corcoran Group’s Deanna Kory and Karen Kelley, in a building with no doorman, sold for $4.95 million after just three days on the market.

Anecdotes aside, one can see this major uptick borne out by statistics.

According to real-estate appraiser Jonathan Miller of Miller Samuel, the average price per square foot of the top 10 percent of Manhattan apartments was $1,744 in the first quarter of this year - up 13 percent from the same quarter last year.

“The higher level of sales have really eaten into inventory,” says Miller, “especially at the high end of the market.”

And with less inventory, prices could continue to rise for a while.

How, exactly, did this happen? Part of it obviously has to do with the record $33 billion in bonuses on Wall Street last year. Another part has to do with how weak the dollar has been.

“There’s a ton of foreign money,” says Sukenik. “For Europeans, it’s like a 35-percent-off sale - a lot of these are foreign ego apartments.”

And Peters thinks it has something to with the fact that most potential buyers who stayed out of the market last year are simply tired of waiting around.

“No buyer wants to be the last person to pay a big price before the market goes south,” Peters says, “And people were apprehensive about how they were not going to be the last one to pay a lot. So you saw a lot of people sidelining themselves in ’06.”

But, Peters adds, “Successful people have only a limited tolerance for delayed gratification, and I think the tolerance was exhausted by the end of 2006. Maybe they got that big bonus and said, ‘You know what, we waited, the market didn’t go south and we’ve got to go on with our lives.’”

Also, it might have something to do with the fact that the suburbs are becoming a less attractive alternative for workaholic families.

“One of the things that’s really driven our boom has been the fact that moving to the suburbs was always predicated on a 9-to-5 work day,” says Peters. “Nobody has one of those anymore. If you’re working 9-to-8, adding a two-hour commute really affects the shape of your day, it affects spending time with your family, and I think that’s an influential factor for a lot of people to stay in the city.”

“People who used to buy in Armonk or Scarsdale or Greenwich . . . [now] want New York because it’s convenient for both parents,” says Sukenik.

Another part of the surge has been that despite all the new construction, there is surprisingly limited inventory for big apartments.

“There’s a really good supply of two-bedrooms that have been selling quickly, but developers didn’t want to develop too many large luxury products,” says Osher. “Basically, they didn’t want to put all their eggs in one basket. Luxury was kind of ignored by developers.”

“When we did the Time Warner Center and were offering 8,000-square-foot penthouses, people thought we were crazy,” says David Wine, vice chairman of the Related Companies. “But we saw the demand. You can get a tremendous amount of money from people with large families - well, wealthy families, not necessarily large. But they’re demanding the space.”

Does this mean that the era of the big buildings filled with small studios is coming to an end?

“We’ve thought about [designing bigger apartments], but we’re not sure if we’re going to do it,” says Elad Dror, director of residential property for the Moinian Group, developer of buildings like the Atelier, where buyers can use their American Express card for their down payment. (Think of the miles!) “There’s still a demand for more efficient-sized homes in the city ... If the market turns, we don’t want to be stuck with four-bedrooms. You’re better off with one-bedrooms.”

And Dror has seen why: If buyers can’t get a four-bedroom, they’ll just buy three apartments next to one another and build their own.

“I saw someone come into the Atelier and try to buy eight apartments - six two-bedrooms, and two one-bedrooms,” says Dror.

Despite the demand, developers like Related and Moinian aren’t rushing out to build complexes with 300 multimillion-dollar units. For many, this latest market move doesn’t feel like irrational exuberance. It feels more sustainable than what happened two years ago.

“I see right now a much more stable market,” says broker Jacky Teplitzky, an executive vice president at Prudential Douglas Elliman. “A crazy market is much more dangerous.”
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Playing the Waiting Game Two-bedroom penthouse, for sale, cheap! Unbudgeable tenants included. By S.Jhoanna Robledo  (Photo: William Mebane) April 16, 2007-- There’s nothing wrong with the spacious,…... Read more >

Playing the Waiting Game
Two-bedroom penthouse, for sale, cheap! Unbudgeable tenants included.
By S.Jhoanna Robledo 

(Photo: William Mebane)
April 16, 2007-- There’s nothing wrong with the spacious, bright apartment at 328 West 86th Street. So why is it priced at $549,000, barely half what it’s worth? You can buy it, but you can’t move in. The current occupants have a rent-controlled lease, and they can stay put for as long as they pay the bill. Which means a ghoulish calculation: “You pretty much have to wait for them to pass away, which could take five years or 30,” says listing agent Ray Kiswani of Bellmarc Realty.

For the very patient, an “encumbered” apartment can be a rare bargain. How else could one get a two-bedroom Sutton Place penthouse for less than a million? “The payoff is really terrific!” says Prudential Douglas Elliman agent Jerri Sherman, who’s representing two such apartments on West 13th. Of course, doing so “absolutely doesn’t make any sense for the typical buyer,” says Frederick Peters, president of Warburg Realty. Those old leases aren’t likely to cover the mortgage, let alone monthly charges. (The lucky soul in the Sutton Place penthouse pays $1,080 a month; the maintenance is $1,900.) These purchases are considered investments, which require commercial loans with higher interest rates than standard mortgages. You can try buying out the tenants, but they usually say no, says developer Andy Field, who co-owns the West 86th Street apartment.

How do you figure the price? It depends on three assumptions: how long the resident will stick around, what the real-estate market will do over that time, and what real dollars will do as well. Let’s say you think you’ll take possession in twenty years, and assume a 5 percent annual increase in the market, and expect a 10 percent compounded return on the investment—all decent guesses. An apartment that would ordinarily be priced at $500,000 today will, under those conditions, be worth $1.32 million twenty years hence. That amount, calculated backward into today’s dollars, with a risk factor calculated in, is about $200,000, which is how much you should offer.* Suggest less if your tenant jogs, and more if he or she loves bacon.

You also need to remember that you’ll pay any difference between the tenant’s rent and the maintenance fees. And remember that you’re gambling: If rent-control or -stabilization laws change radically, or if the lease is about to be destabilized, all your computations go south. (On the upside, there’s that luxury-decontrol clause: If your tenant makes over $175,000 for two years in a row and the rent edges past $2,000, you get to hike it as high as you want.)

All-cash buyers are the best candidates, because they can park money in these properties, treating them like a 401(k), says Kiswani.  No matter what kind of buyer you are, though, Peters says, you’re still betting that real estate will continue to appreciate. Besides, “in the event your analysis goes awry, it could be a very expensive mistake. Actuarial tables aside, your 90-year-old tenant could live to 105.”
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March 2007 Open houses become full houses By Lauren Elkies Heavily attended open houses are the place to be in Manhattan, and the constant crowds are more evidence that the residential market is resurgent.…... Read more >

March 2007
Open houses become full houses

By Lauren Elkies
Heavily attended open houses are the place to be in Manhattan, and the constant crowds are more evidence that the residential market is resurgent.

They "are mobbed, with 50 people, 70 people," said Frederick Peters, president of Warburg Realty Partnership.

Some people say that an unusually warm winter has spurred more open-house activity.

But Peters does not subscribe to the seasonality argument. He said he has seen as many people frequenting open houses on bitterly cold days as on warmer ones. Any connection between weather and real estate is merely a correlation, he said.

Nellie Wilson, a senior associate in the Carnegie Hill office of the Corcoran Group, said buyer interest is once again resulting in bidding wars.

"We've had very, very active open houses and some of those visits have resulted in offers," Wilson said.

"We're beginning to see a bidding war" climate, although not like the same frenzy of a year and a half ago, she said.

The recent spurt of activity follows a long stretch of inactivity that began in the second quarter of 2005, when potential buyers waited on the sidelines -- in many cases opting to rent -- for prices to drop.

Starting in November, sellers started pricing their apartments more realistically, real estate pros said.

"Buyers and sellers have finally come onto the same page," said Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty.

A stable economy, good wages, flat interest rates, the Nov. 7 Congressional election and buzz about record Wall Street bonuses reignited interest in the market.

It's those buyers, partly, that waited out the market by renting who are attending the open houses.

"[They are the ones] soaking up the sales inventory," said Jeffrey Jackson, co-founder of appraisal firm Mitchell, Maxwell & Jackson.

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March 2007 Call it a comeback Slowdown gives way to boom as NYC's residential market rebounds By Stuart W. Elliott   To paraphrase Mark Twain, the rumors of the death of New York City's residential…... Read more >

March 2007
Call it a comeback
Slowdown gives way to boom as NYC's residential market rebounds

By Stuart W. Elliott
 
To paraphrase Mark Twain, the rumors of the death of New York City's residential market were greatly exaggerated.

After a year-and-a-half slowdown, apartment sales have clearly sprung back to life -- part of a revitalized bull market where open houses are crowded once again.

This month, a spring roundup by The Real Deal takes a look at the new environment from multiple angles -- at the change in pricing that has helped sellers lure buyers, how New York City stacks up against the national market (favorably), the best and worst case scenarios going forward, as well as the prospect for a new condo development glut now.

A strong fourth quarter of 2006 -- when the market came back to life, with a jump in sales and a sharp drop in homes on the market -- was followed by more strong sales activity in January, up 20 percent from the same time a year prior, according to Miller Samuel appraisers.

Bidding wars are back, brokers say, and the uptick is clearly visible at open houses.

They "are mobbed, with 50 people, 70 people," said Frederick Peters, president of Warburg Realty Partnership.

Stacking us up against the national market, New York City's unique position comes into greater relief.

Nationwide, the median sales price of a home inched up only 1.1 percent in 2006, according to the National Association of Realtors.

In Manhattan, the median sales price for an apartment was up nearly 10 times that amount. Prices were 10.7 higher in 2006 compared to 2005, even though sales were generally slow for most of the year because buyers didn't want to pay high prices.

Sellers have been pricing properties more competitively in recent months, and because sellers are lowering their prices, buyers appear to be taking the bait. But pricing discounts could be on the way out again, as a study by property listing Web site Streeteasy.com found.

Still, there are some storm clouds on the horizon, including a rising number of foreclosures and more new development coming on the market, which could cause oversupply and drag down prices. The stock market and economy are another concern.

Not everyone is a believer that New York is immune from the general national slowdown. For some, the revival may be short-lived. "New York is the anomaly," said Barry Hersh, associate director of the Steven L. Newman Real Estate Institute at Baruch College. "I just think it won't continue to soar while the rest of the country is going down. How can New York be an island?"

 

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The Real Deal March 2007 Will this rise be followed by a fall? By Lauren Elkies What goes up must come down, so the proverb goes. If that's the case with New York's real estate market, experts…... Read more >

The Real Deal
March 2007
Will this rise be followed by a fall?

By Lauren Elkies
What goes up must come down, so the proverb goes. If that's the case with New York's real estate market, experts are wondering whether the recent residential sales revival is only a brief pause on a downward slide that pulls the city into line with the rest of the country.

The market is also watching whether the amount of new development coming online will play a part in a decline.

"Right now we're seeing fairly robust activity, more than we did last year at this time, and that's contrary to a large portion of real estate markets in the rest of the country," said Jonathan Miller, president and CEO of Manhattan appraisal firm Miller Samuel.

Barry Hersh, associate director of the Steven L. Newman Real Estate Institute at Baruch College, said the pace inevitably will slow down again.

"New York is the anomaly," Hersh said. "I just think it won't continue to soar while the rest of the country is going down. How can New York be an island?"

Some market observers have warned that new condominium development could result in a glut, with an oversupply of units driving prices down. The number of construction permits issued for residential units in the city in 2005 and 2006 was the highest for any two-year period since 1965, and many of those projects are coming to completion now. Despite the slowdown in the market in the past year, only 2.1 percent fewer permits were issued in 2006 than in 2005, according to U.S. Census Bureau figures.

But Frederick Peters, president of Warburg Realty Partnership, doesn't think there is a problem.

Market saturation is unlikely because fewer new developments are coming online now than near the end of last year, he said.

"It looked more gluttish probably in September and October of '06 than it does now," Peters said.

Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York real estate company Charles Rutenberg Realty, said, "There are more than enough people out there that are interested in buying."

Still, by historical levels, condo inventory is high.

Between 2000 and 2006, condo inventory grew by 83 percent, Miller Samuel found. The number of available co-ops rose only a modest 8 percent during that time period.

Last month, there were practically the same number of condos on the market as co-ops, despite the fact that there are three times more existing co-ops in Manhattan than condos.

Looking at both condos and co-ops, overall inventory has been generally shrinking recently, but it is a far cry from the lower availability seen over the last six years.

February 2007 inventory was still higher than February 2001, 2002, 2004 and 2005, and just below the number in February 2003, according to Miller Samuel.

On the other hand, the absorption rate, which is a good barometer of the market, was 7.3 months in the fourth quarter of 2006, according to appraisal firm Mitchell, Maxwell & Jackson, a positive drop from the 10-month rate seen in prior fourth quarters.

"When inventory is above eight months you are in an oversupply situation and prices start to come down," said Jeffrey Jackson, co-founder of Mitchell, Maxwell & Jackson.

Others remain bullish on the future of the developments soon to hit the market.

Because of the volume of interest, at least two of the 10 new developments Warburg Realty Partnership is marketing -- one on the Upper East Side and one in Harlem -- are looking to raise prices, Peters said. Granted, the two projects are already almost sold out.

New development -- and the prospect of a condo glut -- will be hindered, also, because of the changes to the 421-a tax abatement program, to take effect at the end of the year.

"People are clearly taking a second and third look at their decisions to acquire a new site and are recalculating the numbers," said Steven Spinola, president of the Real Estate Board of New York.

Spinola estimates that that there will be 7 to 12 percent price growth this year.

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REAL ESTATE SHOWCASE: SPRING PREVIEW February 26, 2007 Point of View “New developments are hotter than ever,” says Frederick Peters, president of Warburg Realty Partnership. “But these…... Read more >

REAL ESTATE SHOWCASE: SPRING PREVIEW
February 26, 2007

Point of View





“New developments are hotter than ever,” says Frederick Peters, president of Warburg Realty Partnership. “But these days they seem less about over-the-top amenities and more about great design and relative value. A good example is our

Diamond House development on the Upper East Side where buyers are offered solid, well-designed family-size spaces at reasonable prices. At the end of the day, it’s the apartment that counts.”

 

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Market Overview Housing Bubble and Real Estate Market Tracker Posted on Feb 19th, 2007 Housing Market Heats Up Again in New York City Since the new year began, a burst of activity has broken out in Manhattan…... Read more >

Market Overview
Housing Bubble and Real Estate Market Tracker
Posted on Feb 19th, 2007

Housing Market Heats Up Again in New York City

Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.

Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.

Real estate brokers and statisticians are quick to point out that not every single apartment is flying into contract. During the last quarter of 2006, the major real estate agencies differed on which way prices were headed.

But now, the three largest real estate companies in the city agree: for January, at least, both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006.

With higher Wall Street bonuses, a strong regional economy and pent-up demand from New Yorkers who were once worried that the city’s real estate market would crash, buyers’ attitudes have done an about-face. “Their psychology has changed,” said Frederick W. Peters, the president of the Warburg Realty Partnership. “For almost two years, they’ve been scared that the market would plummet and they’d end up like fools who paid too much.”

Real estate experts say they see no reason for the trend to not continue, with economists predicting stable mortgage rates and a continuing city budget surplus. However, other factors may alter New Yorkers’ renewed interest in buying real estate, including an expansion of the Iraq war, a changing employment picture or another terrorist attack.

Yet, there is “cautious exuberance,” according to Steven L. James, director of Manhattan sales for Prudential Douglas Elliman.

A week ago, one open house attracted 100 people to an Upper West Side one-bedroom; a $2.475 million house in the Park Slope neighborhood of Brooklyn sold in a day.

Across the board, the prices of Manhattan apartments are rising. Jonathan Miller, the president of Miller Samuel, an appraisal firm, said the number of contracts signed this January was 19.4 percent higher than in January 2006. Prices were up 14.4 percent in the same time period. Inventory, which was mounting last summer, is shrinking fast.

Now, according to Mr. Miller, statistics showed that sales of studio and one-bedroom units, stagnant over the past year, were up 13.7 percent in January. “It’s not like a lot of huge sales at the high end skewed the average up.”

According to a report released last week by the National Association of Realtors, prices are falling in many other metropolitan areas around the country. The report covered only the last quarter of 2006, and showed a modest increase of 3.1 percent for the New York area, which includes parts of northern New Jersey.

Anecdotally, there isn’t much talk of falling prices in Manhattan and in the most sought-after neighborhoods in Brooklyn, where young people looking for a break, empty nesters looking for a guest room and foreigners looking for a pied-à-terre say they want to live.

Katalin Shavely, a 30-year-old bedding designer in Manhattan, devotes her weekends to scanning the classifieds and attending open houses, searching for just the right one-bedroom apartment for less than $750,000. She can’t find it. “I made a mistake,” she said last week. “I should have started looking before Thanksgiving.”

Mr. Miller said New Yorkers had been reluctant to buy because of the feeling of an impending crash. “Last summer, a lot of information was being dumped on the consumer: stories about the glut of condos in Miami, Washington, D.C., and Las Vegas, exacerbated by the constant debate on the blogosphere about housing bubbles, mixed together with a barrage of negative predictions,” he said in a telephone interview.

Although no one can pinpoint the moment when New Yorkers started feverishly buying again, Kirk Henckels, the director of the private brokerage division of Stribling & Associates, said he thought the luxury market picked up after Labor Day.

He and others said the resurgence was partly fueled by the fall’s record-setting (and well-publicized) sales of a few multimillion-dollar apartments and town houses, like the Stanford White limestone palazzo at 25 East 78th Street bought by Mayor Michael R. Bloomberg for $45 million and the Harkness mansion at 4 East 75th Street sold in October for $53 million.

Then came this year’s stratospheric Wall Street bonuses, and the market exploded, real estate executives said.

“The plunger that freed up all the hesitation at all price levels was those bonuses,” said Diane Ramirez, the president of Halstead Property. “It cleaned the pipes and gave confidence to even small apartment buyers.”

Within the last month, the Corcoran Group, Halstead and Prudential Douglas Elliman, three of New York City’s largest real estate sales firms, say they have recorded double-digit increases in contract prices and in the number of transactions.

In a real estate market where 18 and 22 percent price increases were recorded in 2004 and 2005, last year’s 6 percent increase was depressing, Mr. Miller said.

Pamela Liebman, the president of the Corcoran Group, reported that the company’s contracts for this January totaled $1.3 billion, an increase of 53 percent from January 2006.

Prices in many areas of Brooklyn are going up, too. According to Marc Garstein, the president of Warren Lewis Realty in Park Slope, prices in what he called the downtown neighborhoods — including Brooklyn Heights, Park Slope, Carroll Gardens, Cobble Hill, Prospect Heights and Windsor Terrace — are now approaching 2004 highs, after being off about 10 percent in the last two years.

A town house at 171 Garfield Place in Park Slope, priced at $2,475,000, sold for the asking price one day after it was put on the market. Fifty people had shown up at the open house, Mr. Garstein said.
Customers said they had expected a buyer’s market in which they could call the shots, but found a race track, instead.

Jane LaFarge Hamill, a 25-year-old painter who lives in a “small, kind of stinky” studio in Chinatown, said she had looked at 60 apartments over three months, trying to take advantage of the lull she had noticed. “We decided to look while sellers were still worried that the market was crashing,” she said.

When she started looking last fall, there was still “wiggle room,” she said. But now, there is frenzy, said her mother, Leita Hamill, who, with her husband, Bill, is helping her daughter search for and buy a new home. The Hamills had gotten into a bidding war, one of many reported by brokers these days, for a two-bedroom co-op in Gramercy Park. They had started bidding above the asking price, but it wasn’t enough.
“There were people bidding on the apartment sight-unseen,” Mrs. Hamill said. The victors got the co-op through a sealed bid, she said. “It was like a pair of shoes that you absolutely had to have,” she said.
Real estate executives say they do not know how long the market’s heat will be turned up, although they say the regional economy looks strong.

They also say that the first two quarters of the year — the spring market — are traditionally stronger than the last two. Thus, the average for the whole of 2007 may or may not show the double-digit growth that the first part of the year is showing. “It’s all about price now,” Ms. Ramirez said. “The market is not in a spike mode, when anything, for any price, will sell.”

Ms. Ramirez, who has sold real estate for more than 30 years, said she expected that the current rocketing growth would be followed by a period of slower yet steady increases. “I don’t want to hear, ‘Oh my gosh, the market is slowing up again,’ ” she said. “With the number of deals we had last week, it has to calm down. But I feel much more confident than at any time in the last five years when the market had fits and starts and there was always a certain underlying nervousness.”

Toward the end of 2004, the real estate market in the city was booming. But then, brokers started seeing “great concern among clients that mortgage rates were about to jump and that house prices would suffer a sharp correction,” Mr. Miller said.

Since then, there has been change of leadership in Congress, Mr. Miller noted. In the region, unemployment has dropped. Mortgage rates didn’t soar. “Two years ago, we were predicting they’d be up to 8 percent now,” he said. (Rates for a 30-year fixed loan on a New York City co-op hover around 6.25 percent, according to the Manhattan Mortgage Company.)

After months of trying to push shoppers over the edge of indecision, brokers now say they spend time warning house hunters not to rush in heedlessly — advice the would-be buyers don’t always listen to.
“When my wife and I got into the market in mid-December, people told me there was a glut of one-bedroom apartments and I could take my time,” said Shelly Cohen, 51, an empty-nester. “When we actually got into the market, I found it was just the opposite.” He just found a newly created condominium in a beige brick high-rise at 1438 Third Avenue at 81st Street and quickly signed the contract. He said he felt he had to.

Mrs. Hamill, the mother of the young artist in Chinatown, offers her own advice to friends.
“Now I tell everybody: Be ready to write the check the minute you see something you love,” she said. “If it’s any good, it’ll be gone by the next day.” She paused. “Or, even by that same day.”

 

 

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Bucking nationwide trend, New York City  housing market hot again The Associated Press Monday, February 19, 2007 NEW YORK: New York City's housing market is hot again in spite of a tepid market…... Read more >

Bucking nationwide trend, New York City  housing market hot again

The Associated Press
Monday, February 19, 2007

NEW YORK: New York City's housing market is hot again in spite of a tepid market in many other urban areas around the U.S., according to preliminary indications from real estate firms, The New York Times reported in Monday's edition.

Droves of people are hunting for co-ops, condominiums and townhouses in New York City, sending prices higher, sparking bidding wars and jamming open houses, the newspaper said.
Both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006, according to the city's three largest real estate companies.

Experts pointed to higher Wall Street bonuses, a strong regional economy and pent-up demand for the hotter-than-hot market. "For almost two years, they've been scared that the market would plummet and they'd end up like fools who paid too much," said Frederick W. Peters, the president of the Warburg Realty Partnership.

The market is hot across price ranges — from studios in the East Village to mansions on the Upper East Side.

A report released last week by the National Association of Realtors showed that prices were falling in many metropolitan areas around the country.

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February 19, 2007 Housing Market Heats Up Again in New York City By TRACIE ROZHON Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers…... Read more >

February 19, 2007
Housing Market Heats Up Again in New York City
By TRACIE ROZHON

Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.

Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.

Real estate brokers and statisticians are quick to point out that not every single apartment is flying into contract. During the last quarter of 2006, the major real estate agencies differed on which way prices were headed.

But now, the three largest real estate companies in the city agree: for January, at least, both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006.

With higher Wall Street bonuses, a strong regional economy and pent-up demand from New Yorkers who were once worried that the city’s real estate market would crash, buyers’ attitudes have done an about-face. “Their psychology has changed,” said Frederick W. Peters, the president of the Warburg Realty Partnership. “For almost two years, they’ve been scared that the market would plummet and they’d end up like fools who paid too much.”

Real estate experts say they see no reason for the trend to not continue, with economists predicting stable mortgage rates and a continuing city budget surplus. However, other factors may alter New Yorkers’ renewed interest in buying real estate, including an expansion of the Iraq war, a changing employment picture or another terrorist attack.

Yet, there is “cautious exuberance,” according to Steven L. James, director of Manhattan sales for Prudential Douglas Elliman.

A week ago, one open house attracted 100 people to an Upper West Side one-bedroom; a $2.475 million house in the Park Slope neighborhood of Brooklyn sold in a day.
Across the board, the prices of Manhattan apartments are rising. Jonathan Miller, the president of Miller Samuel, an appraisal firm, said the number of contracts signed this January was 19.4 percent higher than in January 2006. Prices were up 14.4 percent in the same time period. Inventory, which was mounting last summer, is shrinking fast.

Now, according to Mr. Miller, statistics showed that sales of studio and one-bedroom units, stagnant over the past year, were up 13.7 percent in January. “It’s not like a lot of huge sales at the high end skewed the average up.”

According to a report released last week by the National Association of Realtors, prices are falling in many other metropolitan areas around the country. The report covered only the last quarter of 2006, and showed a modest increase of 3.1 percent for the New York area, which includes parts of northern New Jersey.

Anecdotally, there isn’t much talk of falling prices in Manhattan and in the most sought-after neighborhoods in Brooklyn, where young people looking for a break, empty nesters looking for a guest room and foreigners looking for a pied-à-terre say they want to live.

Katalin Shavely, a 30-year-old bedding designer in Manhattan, devotes her weekends to scanning the classifieds and attending open houses, searching for just the right one-bedroom apartment for less than $750,000. She can’t find it. “I made a mistake,” she said last week. “I should have started looking before Thanksgiving.”

Mr. Miller said New Yorkers had been reluctant to buy because of the feeling of an impending crash. “Last summer, a lot of information was being dumped on the consumer: stories about the glut of condos in Miami, Washington, D.C., and Las Vegas, exacerbated by the constant debate on the blogosphere about housing bubbles, mixed together with a barrage of negative predictions,” he said in a telephone interview.

Although no one can pinpoint the moment when New Yorkers started feverishly buying again, Kirk Henckels, the director of the private brokerage division of Stribling & Associates, said he thought the luxury market picked up after Labor Day.

He and others said the resurgence was partly fueled by the fall’s record-setting (and well-publicized) sales of a few multimillion-dollar apartments and town houses, like the Stanford White limestone palazzo at 25 East 78th Street bought by Mayor Michael R. Bloomberg for $45 million and the Harkness mansion at 4 East 75th Street sold in October for $53 million.

Then came this year’s stratospheric Wall Street bonuses, and the market exploded, real estate executives said.

“The plunger that freed up all the hesitation at all price levels was those bonuses,” said Diane Ramirez, the president of Halstead Property. “It cleaned the pipes and gave confidence to even small apartment buyers.”

Within the last month, the Corcoran Group, Halstead and Prudential Douglas Elliman, three of New York City’s largest real estate sales firms, say they have recorded double-digit increases in contract prices and in the number of transactions.

In a real estate market where 18 and 22 percent price increases were recorded in 2004 and 2005, last year’s 6 percent increase was depressing, Mr. Miller said.

Pamela Liebman, the president of the Corcoran Group, reported that the company’s contracts for this January totaled $1.3 billion, an increase of 53 percent from January 2006.

Prices in many areas of Brooklyn are going up, too. According to Marc Garstein, the president of Warren Lewis Realty in Park Slope, prices in what he called the downtown neighborhoods — including Brooklyn Heights, Park Slope, Carroll Gardens, Cobble Hill, Prospect Heights and Windsor Terrace — are now approaching 2004 highs, after being off about 10 percent in the last two years.

A town house at 171 Garfield Place in Park Slope, priced at $2,475,000, sold for the asking price one day after it was put on the market. Fifty people had shown up at the open house, Mr. Garstein said.
Customers said they had expected a buyer’s market in which they could call the shots, but found a race track, instead.

Jane LaFarge Hamill, a 25-year-old painter who lives in a “small, kind of stinky” studio in Chinatown, said she had looked at 60 apartments over three months, trying to take advantage of the lull she had noticed. “We decided to look while sellers were still worried that the market was crashing,” she said.

When she started looking last fall, there was still “wiggle room,” she said. But now, there is frenzy, said her mother, Leita Hamill, who, with her husband, Bill, is helping her daughter search for and buy a new home. The Hamills had gotten into a bidding war, one of many reported by brokers these days, for a two-bedroom co-op in Gramercy Park. They had started bidding above the asking price, but it wasn’t enough.
“There were people bidding on the apartment sight-unseen,” Mrs. Hamill said. The victors got the co-op through a sealed bid, she said. “It was like a pair of shoes that you absolutely had to have,” she said.
Real estate executives say they do not know how long the market’s heat will be turned up, although they say the regional economy looks strong.

They also say that the first two quarters of the year — the spring market — are traditionally stronger than the last two. Thus, the average for the whole of 2007 may or may not show the double-digit growth that the first part of the year is showing. “It’s all about price now,” Ms. Ramirez said. “The market is not in a spike mode, when anything, for any price, will sell.”

Ms. Ramirez, who has sold real estate for more than 30 years, said she expected that the current rocketing growth would be followed by a period of slower yet steady increases. “I don’t want to hear, ‘Oh my gosh, the market is slowing up again,’ ” she said. “With the number of deals we had last week, it has to calm down. But I feel much more confident than at any time in the last five years when the market had fits and starts and there was always a certain underlying nervousness.”

Toward the end of 2004, the real estate market in the city was booming. But then, brokers started seeing “great concern among clients that mortgage rates were about to jump and that house prices would suffer a sharp correction,” Mr. Miller said.

Since then, there has been change of leadership in Congress, Mr. Miller noted. In the region, unemployment has dropped. Mortgage rates didn’t soar. “Two years ago, we were predicting they’d be up to 8 percent now,” he said. (Rates for a 30-year fixed loan on a New York City co-op hover around 6.25 percent, according to the Manhattan Mortgage Company.)

After months of trying to push shoppers over the edge of indecision, brokers now say they spend time warning house hunters not to rush in heedlessly — advice the would-be buyers don’t always listen to.
“When my wife and I got into the market in mid-December, people told me there was a glut of one-bedroom apartments and I could take my time,” said Shelly Cohen, 51, an empty-nester. “When we actually got into the market, I found it was just the opposite.” He just found a newly created condominium in a beige brick high-rise at 1438 Third Avenue at 81st Street and quickly signed the contract. He said he felt he had to.

Mrs. Hamill, the mother of the young artist in Chinatown, offers her own advice to friends.
“Now I tell everybody: Be ready to write the check the minute you see something you love,” she said. “If it’s any good, it’ll be gone by the next day.” She paused. “Or, even by that same day.”
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United Press International News. Analysis. Insight. February 18, 2007 Sunday 10:37 PM EST Housing sales spike in New York Real estate sales -- and property values -- are rising in New York so far in 2007,…... Read more >

United Press International
News. Analysis. Insight.
February 18, 2007 Sunday 10:37 PM EST

Housing sales spike in New York
Real estate sales -- and property values -- are rising in New York so far in 2007, at a time when sales are sluggish in many other cities.

Sales activity is spiking in Manhattan and several Brooklyn neighborhoods, as New Yorkers step up the hunt for co-ops, condominiums and town houses, The New York Times reported.
Real estate firms say the activity -- which features well-attended open houses and even some bidding wars -- has occurred across all price ranges.

During the fourth quarter of 2006, the newspaper said, major real estate companies differed on which direction the market was taking. Now, however, the three largest real estate companies in New York agree that in January, there was a double-digit increase over the same month in 2006, both in prices and the number of signed contracts.

The increase is being attributed to factors including a strong regional economy, pent-up demand and higher year-end bonuses on Wall Street.

Frederick W. Peters, president of the Warburg Realty Partnership, said homebuyers' psychology has changed.

"For almost two years, they've been scared that the market would plummet and they'd end up like fools who paid too much," he said.

 

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February 18, 2007 The Psychology of Pricing By TERI KARUSH ROGERS IN a market where buyers and sellers circle one another warily — each certain that he or she is being taken advantage of, no matter…... Read more >

February 18, 2007
The Psychology of Pricing
By TERI KARUSH ROGERS

IN a market where buyers and sellers circle one another warily — each certain that he or she is being taken advantage of, no matter what the conclusion of a deal — the asking price of a property is rarely a straightforward reflection of comparable values. While comparables may be a starting point, the price at which a seller offers a property is often also based on wishful thinking, propaganda and ploy.

Buyers, in turn, parry by deconstructing the price. They aim not merely to assess a dwelling’s fair value but also to plumb a seller’s bottom line and vulnerabilities. How a price tracks with similar properties, how large and hasty any reduction is, and even how parsed or rounded a number is — all these are grist for concluding, rightly or not, whether a price is firm, desperate or a sign of painful dealings to come.

Or even a sign of delusion.

Despite whispering advice like courtiers into the ear of a monarch, brokers say some sellers have delusions of grandeur, stemming from a failure to grasp that what they want for their home has nothing to do with what it’s worth.

“Most of the time a seller will start to talk about what they want, and I will say, ‘I don’t care — don’t tell me,’ ” said Andrew M. Phillips, a senior vice president of Halstead Property, who teaches classes on pricing to Halstead agents. “I will do my analysis and come back to you with quantitative information.”

Even when the seller and broker reach an agreement on a home’s value, it is often wise to adjust the asking price downward, and not just because buyers like bargains.

An equally compelling reason to fly low is to adhere to psychological “break points.” These are dollar thresholds that buyers are most likely to select as the top amounts they are initially willing to spend or to use in Internet searches.

(“Initially” is the key. Once buyers set foot in a house or apartment and make an emotional connection to it, they are more vulnerable to budget creep, by which a $25,000 increase can be rationalized as a little bump of $30 or $40 a month in the mortgage.)

Major break points occur at $500,000, $1 million, $1.5 million and so forth. Smaller ones occur every $100,000 and then at every $20,000 or $25,000. So, for example, if the market value of an apartment is around $610,000, brokers generally advise sellers to round down to $600,000 so that the property lands within a buyer’s budgetarily myopic field of vision.

(For each type of apartment, there are other contextual break points. For example, Mr. Phillips noted, many studio buyers say they won’t look at anything over $300,000, while buyers of small one-bedrooms often hover below $500,000 and, for larger one-bedrooms, below $750,000.)

Many brokers tweak break points even further, counseling their clients to name a price just under a break point — for example, choosing $599,000 rather than $600,000. While buyers intellectually recognize the lack of meaningful difference, the lower amount is said to appeal on a less conscious level. (It works in reverse, too: buyers in a bidding war are often counseled to offer an amount just above the next break point.)

“I always joke with people that I’m a department store pricer, because I think that psychologically the first number has an impact,” said Frederick W. Peters, the president of Warburg Realty. “Even though it may seem cheesy, it actually works.”

As an example, Mr. Peters said that it’s wiser to price a property at $4.995 million if it’s worth $5 million. “People are influenced by the first number,” he said, adding, “It’s the 4 that influences the way they perceive the price. Also, if you stay under a threshold, you are going to be found by more computer searches.”

Barbara Fox, the president of Fox Residential Group, suggests pricing a property slightly below a threshold but a little higher — say, 5 percent — than its market value. “Everybody likes to be able to negotiate a little bit,” she said.

Some brokers reject the relatively common $99 or even 99-cent endings. They argue that marching to a more distinctive rhythm — like $487,500 instead of $499,000 — may not only sweep aside listing clutter but also telegraph that the asking price has been so carefully calculated as to be nonnegotiable, assuming that is the desired message.

Theoretically, with a carefully calculated figure, “the power would be much more on the seller’s side in terms of a negotiating position,” said Joan Sacks, an associate broker at Stribling & Associates, “whereas when you get to the more typical type of pricing, rounded numbers, like $995,000 or whatever, the instant perception is that this is just the first asking price.”

A highly specific price reduction that follows a rounded original listing price may lead some buyers to more strongly infer nonnegotiability, which may or may not be the seller’s intention. But affixing a truly oddball number can also send that message.

“I’ve seen prices like $433,779,” said James Lake, a vice president of Bellmarc Realty. “It indicates it’s going to be a difficult transaction from beginning to end.”

Ms. Sacks agreed. “That would be a real turnoff,” she said. “Then, you’re talking about someone who’s going to be arguing about leaving a curtain rod.”

Even if round numbers invite negotiation, proponents say, they are more effective than fractional ones because soliciting bids of any amount is exactly the point, leading to snowballing and competing interest. (An exception: dwellings valued around $1 million. In New York and other states where buyers of properties priced at $1 million and higher pay a “mansion tax” of 1 percent of the purchase price, a listing of $999,999 is a better choice than $1 million.)

Using round numbers that catapult a listing to the top of a break point may confer an additional, subtle psychological advantage merely by being the first to trot onto the stage after an online search.

“The higher up you show up in the search engines, the better off you seem,” said Ravi Dhar, a professor of marketing and management at Yale and the director of the Yale Center for Customer Insights. He pointed to studies of voting habits that demonstrate a slight advantage to the candidate listed highest on the ballot. “The first few options you see are a reference point, a starting point, and all of the advantages of that apartment loom larger.”

Still, sellers are almost certainly at a disadvantage if their price towers over comparable properties’. Prices of more than 5 percent over the market will probably have a chilling effect on buyers, said Confidence Stimpson, a senior vice president at Stribling.

Sellers who think that buyers will simply show up and make their best offer do not understand how the market works. “The challenge is getting buyers to see it in the first place, because their broker is doing the search at $5 million, and you’re at $5.2 million,” Mr. Peters said.

The buyers who do see it, meanwhile, will be disposed to make negative comparisons with better endowed dwellings in the same price range. Even apartment hunters who like the place may shy away from making an offer at what they believe is a fair, but lower, amount.

“They feel like they’ll be rejected,” said Mr. Lake, “and they don’t want to be financially embarrassed.”

Sellers who have priced too high can still salvage the situation. Brokers say they must act quickly — ideally within a few weeks — and make sure there are buyers around to take notice. (“In July, a one-bedroom price drop will get activity, but a Classic 6 probably won’t because families are away,” Mr. Phillips said.)

Second, to be effective, the lower price must tempt a whole new group of buyers, which means slimming down to at least the next break point.

“Something dropping from $949,000 to $899,000 will suddenly show up on someone’s radar,” said Lisa Strobing, a Bellmarc executive vice president who teaches classes on pricing to agents.

For sellers already hovering just above a break point, the reduction can be small though psychologically significant, like going from $2.01 million to $1.95 million. But in general, Ms. Fox said, “small reductions are a waste of time.” She recommended whittling down by 5 to 10 percent, or more depending on the situation.

Of course, Mr. Phillips said: “A good broker will interpret certain things if a property’s been around for a month at $1.5 million, and then dropped by $100,000. If another couple of weeks go by and there’s no action, you will know a little bit of negotiation is possible there.”

Still, proper pruning can elicit a swift reaction.

Last February, Wendy Maitland, a vice president at the Corcoran Group, listed a client’s SoHo loft for $1.695 million, because her client “really wanted room to negotiate it.” The one-bedroom, two-bathroom co-op, which was newly renovated, languished for six months until the seller, motivated by a job transfer to London, dropped the price by $200,000, to $1.495 million. It went into contract for $1.48 million in October, less than two weeks after the reduction.

“In that case, it was a dramatic price drop because I didn’t want to drop it little by little,” Ms. Maitland explained. “It’s much more effective to do a one-time significant price correction than to drop something in dribs and drabs. It ends up staying on the market for too long and can become somewhat of a white elephant even if there’s nothing wrong with it at all.”

But problems can’t always be cured by price cuts alone.

Charlie Summers, a senior associate broker at Bellmarc, had a one-bedroom co-op in the Gramercy Park area listed last May at $499,000. “People looked at it as an overgrown studio, and we just couldn’t sell it,” he explained. Over the next six months, the sellers, Stacy Jessup, a 33-year-old accountant, and her husband, Cooper, a 33-year-old business analyst, dropped the price to $479,000 and then to $450,000, their bottom line all along. But they worried that buyers would bide their time waiting for further reductions. They knew from looking that that could happen.

“Sometimes you watch a place, and you see the price drop, and you think, ‘I’m not even going to look at it yet,’ ” Mrs. Jessup said.

Their concern seemed justified. “We still were getting nothing but nonserious offers,” Mr. Summers said. “People would smell blood, a stale listing and a desperate seller, and put in lowball offers like $360,000, $370,000.”

By December, with their first baby expected any day, the Jessups dropped the price to $399,000 and issued a public ultimatum with their listing: if their apartment didn’t sell by Dec. 20, they would take it off the market altogether.

“We were serious,” Mr. Jessup said. “We weren’t going to risk bringing all sorts of strange germs into an apartment with our baby there.”

The final two open houses, spaced two days apart, drew a total of 55 people, versus the meager turnout of 5 or 10 the previous showings had drawn.

“People could see it was obviously attracting a lot of attention, and their brokers were telling them it was underpriced so they should come in over the ask,” Mr. Summers said. “By that Wednesday I had collected six prequalified offers.” The apartment is in contract for substantially over the $399,000 asking price, and the Jessups, now the parents of a son, are house hunting on Long Island.

Like the Jessups, other sellers agonize that rather than whipping up buyers’ interest, cutting the price will dim a property’s luster and make them look desperate.

Professor Dhar suggested that some anxiety may be warranted.

“If we start getting a good deal on something, we always think, ‘Is there something wrong there?’ ” he explained. “It makes you look at the apartment through a more critical eye and notice the deficiencies, like buying products on sale in the marketplace.”

On the other hand, he said, “if you give people a reason why you’re dropping a price, then psychologically they interpret it differently.” Sellers could neutralize a buyer’s negative reaction, he suggested, by explaining that they were moving to another state.

As for brokers, many argue that seeming eager to sell — even if you aren’t — is a canny strategy.

“There’s always new infusions of people into the market, and it’s not like you’re soiled goods,” said Neil Binder, a principal in Bellmarc. “It would be good to let buyers perceive that you’re desperate so that they say, ‘Let’s run in and make a bid.’ I want to get a lot of people in there to develop a crescendo of activity and create a bidding war.”

Price reductions also work by making buyers feel more in control.

If, for example, an apartment is not drawing offers at $450,000, Mr. Summers said, then as a buyer, “you’re afraid to put in an offer for $410,000, possibly because you don’t see anyone else making offers, and you’re afraid you’re overpaying even at that price.”

 

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Playfuls.com - Targu Mures,Romania Housing Sales Spike In New York Real estate sales -- and property values -- are rising in New York so far in 2007, at a time when sales are sluggish in many other cities.…... Read more >

Playfuls.com - Targu Mures,Romania

Housing Sales Spike In New York

Real estate sales -- and property values -- are rising in New York so far in 2007, at a time when sales are sluggish in many other cities.
Sales activity is spiking in Manhattan and several Brooklyn neighborhoods, as New Yorkers step up the hunt for co-ops, condominiums and town houses, The New York Times reported.

Real estate firms say the activity -- which features well-attended open houses and even some bidding wars -- has occurred across all price ranges.

During the fourth quarter of 2006, the newspaper said, major real estate companies differed on which direction the market was taking. Now, however, the three largest real estate companies in New York agree that in January, there was a double-digit increase over the same month in 2006, both in prices and the number of signed contracts.

The increase is being attributed to factors including a strong regional economy, pent-up demand and higher year-end bonuses on Wall Street.

Frederick W. Peters, president of the Warburg Realty Partnership, said homebuyers' psychology has changed.

"For almost two years, they've been scared that the market would plummet and they'd end up like fools who paid too much," he said.

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February 2007 In post-boom, who's best and worst Harlem, Washington Heights top list of areas with largest gains By Lauren Elkies The first part of the winter in New York City was unseasonably warm. So…... Read more >

February 2007
In post-boom, who's best and worst
Harlem, Washington Heights top list of areas with largest gains

By Lauren Elkies
The first part of the winter in New York City was unseasonably warm. So was Manhattan's residential market in the last three months of 2006.

After a cooling-off period of more than a year as the housing boom receded, sales activity increased.

The uptick helped Manhattan's various neighborhoods, but not uniformly. The Real Deal looked at which areas have fared best and worst in the post-boom market, and found some wide variations in Manhattan's 16 neighborhood areas.

Upper Manhattan prices saw a bigger jump than any other section of Manhattan between the fourth quarter of 2005 and the fourth quarter of 2006, part of a decade-long rise in the area's fortunes.

Washington Heights experienced the largest percent increase in average apartment price, hitting $543,100 in the fourth quarter of 2006. Harlem and East Harlem saw the biggest rise in average price per square foot, which some brokers view as the most reliable yardstick of the market; it climbed 43 percent, from $474 to $678.

The price information was provided by the appraisal firm Miller Samuel, which cautioned that price data can fluctuate more widely for individual neighborhoods than for Manhattan as a whole, because there are fewer sales to form a comparative basis. Included below are charts showing the number of deals collected for each neighborhood.

The big Uptown increases come at a time when the average Manhattan price continues to edge up incrementally, rising 3.2 percent from the end of 2005 to the end of 2006.

"In Harlem, the neighborhood is improving, and the quality of the product that is available is improving," said Brett Grabel, an associate broker who works in the Harlem office of the Corcoran Group. "I think you can expect to see another increase."

Frederick Peters, president of Warburg Realty Partnership, which has an office in Harlem, said prices would likely keep climbing and would be positively affected by the small resale market.

"Inevitably, in a less mature market, people are more influenced by how people are pricing the units than the history of sales, because there is little history," Peters said.

After Washington Heights' 92.4 percent gain in average sales price over the last year, Hamilton and Morningside Heights finished second with a 42.6 percent rise.

While the gains may seem astronomical, they jibe with long-term trends in the area.

According to a 2005 report by Miller Samuel, median apartment prices in Uptown Manhattan rose 349 percent from 1995 to 2004, going from $68,000 to $305,000 -- twice as fast as in other parts of Manhattan.

Once-depressed sections of Downtown also saw a significant pickup in 2006, despite a slower overall residential market in Manhattan.

Co-op and condo prices in the Financial District climbed 21.5 percent for all of 2006 compared to all of 2005. (Full-year figures weren't included in the charts because not all neighborhood information could be obtained as of press time.)

Trendy Soho and Tribeca also notched large gains. Average prices for co-ops and condos were 20.9 percent higher in the fourth quarter of 2006 versus the fourth quarter of 2005. The average apartment price reached nearly $2.5 million, higher than in any other neighborhood. The high average price is also a function of the typical apartment size in loft-dominated Tribeca, which runs larger than apartments in other neighborhoods.

In last year's strong rental market, Soho and Tribeca fetched the highest average rents among Manhattan neighborhoods, too. According to Citi Habitats, fourth-quarter average rents for studios were $2,616; one-bedrooms hit $3,493; two-bedrooms, $5,079; and three-bedrooms came in at $8,772.

Warburg's Peters said differences between the neighborhoods were emerging: "I don't actually think they're really the same market anymore." Soho has remained steady, he said, but Tribeca has had a burst of activity.

Average prices per square foot were down in several prime neighborhoods, according to Miller Samuel. Between the fourth quarter of 2005 and 2006, the number dropped 2.3 percent in Chelsea, 2.6 percent in Greenwich Village, 2.8 percent on the Upper West Side, 2.9 percent in Midtown East/Turtle Bay and 3.9 percent on the Upper East Side.

For Manhattan as a whole, the average price per square foot was down 0.4 percent for the year, even while the average total price edged up a bit. The divergence between these two indicators was also seen with a number of neighborhoods, which may indicate that a few large sales drove up the average price while the average price per square foot remained unaffected.

Overall, the market ended the year on a positive note, with fourth-quarter sales up 55 percent compared to a year earlier, and inventory down, even if prices declined slightly for the quarter (see Big numbers bode well for '07).

"The increase was likely due to the expenditure of record Wall Street bonuses and the continuing rise of new development," said Jonathan Miller, president and CEO of Miller Samuel. "You'll see more of that."

The 2007 outlook for Manhattan real estate remains strong, and activity has been brisk since the beginning of December, said Peters.

Peters attributed price increases to the strength of the upper end of the market, which thrives on bonuses. "It's the luxury product that's bringing up the numbers," Peters said. The ripple effect of two consecutive years of record Wall Street bonuses will show up in the first two quarters of 2007, though Peters cautioned that "bonuses in and of themselves are not the only market driver."

 

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February 2007 Residential firms, from staid to splashy Manhattan brokers offer behind-the-scenes look at their office cultures By Lauren Elkies Anyone in the midst of a shop talk conversation knows…... Read more >

February 2007
Residential firms, from staid to splashy Manhattan brokers offer behind-the-scenes look at their office cultures

By Lauren Elkies
Anyone in the midst of a shop talk conversation knows that it's not just what you do that makes you happy; it's where you do it. New York real estate brokerages are as varied as the properties they represent, though some differences are more obvious than others.

The Real Deal talked to residential brokers and their bosses last month, conducting an unscientific survey that sought to explain how corporate culture reflects each firm's work. Questions ranged from dress codes to where they dine to how agents do business.

Our findings aren't set in stone, but the results helped The Real Deal divide the brokers into five different categories: Upper East Side boutique brokers that talk about how the rich -- often including the brokers themselves -- are different from the rest of us; the brokerage behemoths that dominate much of the market; the ranks of young, energetic rental brokers who are sometimes looked down on by their sales broker colleagues for their inexperience; mid-sized firms, some of which are more corporate and maintain mass market appeal, as well as others that are slightly more upscale; and Downtown boutique brokers that mirror their hip clients in Chelsea and farther south.

For the most part, the cultures of the firms mimic the demographic they serve -- Upper East Side brokers will dress and act like their clients and the same thing is true Downtown. Most brokerage executives touted their comfortable offices and low employee attrition rates. While the Uptown boutique firms said that they only hire people they know, mid-size and large companies recruit to help fill their ranks. Citi Habitats is the most aggressive recruiter, giving weekly pitches to students at New York Real Estate Institute.

Differences between brokers and management, and the vibe in a firm's offices, can affect the bottom line. A poisonous office culture can drive brokers away and repel top talent. A supportive and dynamic culture -- mostly conveyed through the firm's leadership -- motivates agents to get deals done.

But it's probably better to let the brokers and executives speak for themselves. We'll start at the top drawer:

Uptown boutique firms

It's clubby at the top. Uptown boutique firms rely on reputation, their hold on a niche market and their sophisticated sales associates. They get their employees the same way they do their clients -- referral and reputation.

Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles
Rutenberg Realty, said that these small companies "are the last holdouts" in a consolidating market where bigger is better.

In a climate where mergers and buyouts are shrinking the number of brokerages doing business in Manhattan, some of these long-established -- and perhaps a little uptight -- boutique firms are discovering that in order to survive, they need to modify the way they do business.

Upper East Side firms such as Alice F. Mason, Fox Residential Group and Gumley Haft Kleier, for example, have expanded from their traditional areas of focus to doing business in the Downtown market.

It's a business where customers are friends, and even potential employees. Edward Lee Cave, owner of the brokerage that bears his name, lives on Park Avenue and has a house in Connecticut where he retreats for weekends. One of his 20 employees has an apartment on Sutton Place and a second home in Connecticut. Another broker lives on Fifth Avenue, has a place in Maine and visits her family frequently in London. "That goes right down the line with our people," Cave said. "We live the life we sell."

Cave has been known to boast, "Our clients, we either know them socially, we went to school with them, or we once were married to them."

Cave has roots in the art world, and maintains his own collection. He was the first American to be offered a senior position at the real estate arm of the storied British auction firm Sotheby's. He was the senior vice president in charge of operations at the auction company and became the founding chairman of their international realty company.

He started his real estate company in 1982, and soon broke some records. He sold Dino de Laurentis' Beverly Hills mansion, which was the highest price paid for a private residence in the country at the time.

Cave focuses on selling "superior" homes rather than just large units or a simple studio or two-bedroom apartment.

"We're like the private banking division in a bank," Cave said.

In this niche, work often imitates life. Barbara Fox, president of the 40-agent Fox Residential Group, said new employees tend to imitate her style, wearing dark-colored jackets and pants, but there is no dress code. Unlike some of the other Uptown boutique firms, Fox Residential Group is a little more relaxed. Employees can wear jeans when they don't have appointments, and they generally eat lunch in the office, often getting the food from the restaurant EAT, a neighborhood diner or sushi.

"They're very down-to-earth businesspeople. That's who I hire," Fox said.

Some Fox agents specialize in neighborhoods outside of the Silk Stocking District, including Downtown and far Uptown. Her agents tend to live in the areas they cover, Fox said.

"I try to have a very well-rounded group, so there's someone for everyone. There's a broker for every buyer," she said.

Fox lives on the Upper East Side and has a country house in Connecticut; other employees have second homes in Connecticut, Westchester, Columbia County and Long Island, including the Hamptons. Her agents have vacationed recently in Mexico and the South of France.

"I'm the only one that doesn't take a vacation," she says.

Brokers range in age from their 20s to their 70s. Fox said, "again -- something for everyone."

Michele Kleier's shop, Gumley Haft Kleier, is known for its high-end Upper East Side business, but with her two young daughters on board in addition to other family members, the company is a little more easygoing.

At the 2005 Gumley Haft Kleier holiday party, held in Kleier's Park Avenue apartment, "The parlor and living room were filled with chic-looking middle-aged agents and their spouses. There were some younger brokers looking like Junior Leaguers and some real estate reporters happily munching food," according to an article in the New York Times.

Still, like at other Upper East Side boutiques, the brokers at Gumley Haft Kleier reflect the client base.

There is no one working there that "I haven't known" in some way, said Kleier, the company's president and chairman. "I don't like dealing with strangers."

Kleier and her husband, Ian, run the 40-person company -- she is a broker, and he handles advertising and the business end. Kleier's best friend and son-in-law work there. And daughter Sabrina Kleier Morgenstern is executive vice president, and her sister Samantha Kleier Forbes is vice president.

Upper East Side natives Morgenstern and Forbes graduated from the prestigious Horace Mann School and the University of Pennsylvania. They both still live on the Upper East Side. Morgenstern started her career at NBC's Access Hollywood before going into the family business.

Two other firms that are holding the old line are Phyliss Koch Real Estate and Alice F. Mason.

Technology, for example, has not been a huge boon to these brokerages, though it's transformed the business at mass market shops.

Alice Mason of Alice F. Mason and Phyliss Koch of Phyliss Koch Real Estate do not rely on e-mail for communication. "I like to speak to people," Koch said. "A lot gets lost in an e-mail."

Koch said that while Corcoran and some of the other big firms will hire "anyone," she only hires people she knows who have a built-in network and knowledge of the city's apartment buildings.

The youngest of her nine agents is in his 40s, Koch said. Koch depends on referrals for customers and her husband and employees for technological matters. She said the Web isn't the answer in real estate because you need to see a property to buy it. "I believe in the personal touch."

Koch lives in the San Remo and vacations in tony Atlantic Beach on Long Island. Known for her focus on the West Side, Koch also does a fair number of deals on the East Side. It's not that Koch hasn't broken any ground. "We've always been up at Columbia when no one would go up there," she said.

She said all the big firms have approached her to buy her out, but she has rebuffed their offers. "We do what we do and we do it fine," Koch said. Besides, she said, "people don't necessarily want to work with a larger firm."

Mason has been in the business since 1953, a time when tony cooperative apartments only sold to people in the Social Register, a directory of the privileged class. At the time, shut out of the social elite, Mason capitalized on Manhattan's rental market. She even found Marilyn Monroe a rental apartment at 2 Sutton Place in 1956 (see How it feels...).

Mason is known for having hosted celebrity-packed dinner parties with guests including Presidents Bill Clinton and Jimmy Carter. She has maintained a stronghold on the Upper East Side high-end market, but as luxury real estate development has extended to Downtown Manhattan, her company is following suit. She says her agents also will handle deals below $1 million.

Times have changed, but Mason still relies solely on the telephone to communicate with her office. She has stayed in her Upper East Side rental apartment for 44 years, where she also works. While many companies are hiring fresh, young talent, most of the 12 employees at Mason's office are in their 50s. All came with built-in networks. Her daughter and senior vice president, Dominique Richard, 45, has worked with Mason for 23 years.

Rental firms

Manhattan's large rental firms are at the other end of the spectrum, with their brokers working to house large numbers of people as fast as they can be put into apartments.

Rental firms attract young employees that need a steady income and are drawn to the promise of a quick paycheck. In contrast to the exclusive, top-drawer mores of the boutiques and sales-oriented firms, turnover is greater and payouts are smaller. Sales agents tend to dismiss rental agents as professional novices.

At the top of the rental food chain is Citi Habitats, the biggest rental company in the city.

Founded by Andrew Heiberger, Citi Habitats has grown from two agents to 680 employees, spread out across 16 Manhattan offices, according to Gary Malin, the chief operating officer since 1998. The company is also the on-site leasing and sales company at 12 buildings in Manhattan.

"Citi Habitats has evolved since its inception in 1993," Malin said. "We're not the new kid on the block."

The company proved the value of its high market share in 2004, when Heiberger sold it to NRT, a subsidiary of the public Realogy Corp. The company, which owns the Corcoran Group, Sotheby's International Realty and Coldwell Banker Hunt Kennedy, paid $49 million for a mix of quantity and quality. Heiberger is now president and CEO of developer Buttonwood Real Estate.

Citi Habitats has served as the breeding ground for many brokers that later went on to start their own rental firms, including Bond New York, Kurland Realty, A.C. Lawrence and Company, and the Real Estate Group New York.

While some agents drew criticism for their business methods in the early years of the firm, Malin's guiding hand improved Citi Habitat's reputation, according to brokers.

Malin said he still hopes to maintain a family-like atmosphere. He said he sends a congratulatory e-mail to agents when they make their first sale and their commission cut increases.

Bond New York, co-founded six years ago by Bruno Ricciotti and Noah Freedman, aims for widespread appeal, as reflected by its employees.

In the company's Greenwich Village office, there are artists, actors, musicians, former Wall Street guys, real estate building managers and even an art professor, said Shane Kramer, 36, the rental manager in the office.

The sales associates dress in Downtown-chic clothing, Kramer said.

"We do have a dress code, but we allow the agents to have their individuality," Ricciotti said. "We're definitely not a robotic operation."

Most of its employees are between 28 and 37 years old, though they range up to 69 years old.

Ricciotti and Freedman are in their early 30s. Freedman likes to surf.

"A lot of people that come here think we're very young and tech savvy," said Ricciotti. "We are super, super cool," he said, tongue-in-cheek.

Benjamin James Associates president Douglas Wagner said his firm "in some ways is the anti-broker in that we've never established a corporate culture. Instead we've always attracted the more sort of freelanced, entrepreneurial, somewhat creative profile in our agent ranks."

Today, the 14-year-old, Downtown-oriented firm's business is 65 percent rental and 35 percent sales. Because of its rental focus, the company appeals to young people, some of whom have been with the company since its inception, Wagner said. Its 80 agents are mostly in their mid-20s to mid-40s, though some agents are in the 50s and 60s, Wagner said.

The company's founder and Wagner's partner, James Ferrari, helped produce a film that debuted at the 2006 Tribeca Film Festival, the romantic comedy "Kettle of Fish," which starred Gina Gershon and Matthew Modine.

"That also influences the creative factor at Benjamin James," Wagner said.

Large firms

The city's biggest firms have an advertising and marketing presence so ubiquitous that casual observers might see them as indistinguishable brands, along the lines, say, of the car rental companies Avis and Hertz.

The Corcoran Group and Prudential Douglas Elliman continue to vie for the top dog spot, said Braddock, a former general sales manager for Douglas Elliman turned consultant.

She says the struggle for the No. 1 spot puts each at risk of losing its unique identity.

"For the broker they're all beginning to feel like they are a Bloomingdale's," Braddock said. "They're the place you can go to get a little bit of everything. You're not going to be blown away by anything, but you won't be lacking either."

But it's nearly impossible for apartment hunters to disregard Corcoran and Elliman, which command huge total market share across a wide spectrum of residential property types. In April 2006, together they accounted for more than 60 percent of listings among the 10 biggest residential firms -- 2,658 out of 4,426, according to a survey by The Real Deal.

Elliman had the most agents of any firm in Manhattan -- 1,337 at the time of the survey. Corcoran had the second-highest total, with 877 agents. The other firms in the top 10 biggest list were (in order of size) Citi Habitats, Halstead, Brown Harris Stevens, Bellmarc, Coldwell Banker Hunt Kennedy, Stribling, Warburg and Sotheby's.

Even in a large organization, a dynamic leader can make a big company feel a lot more like family. When Corcoran founder Barbara Corcoran sold the company to NRT six years ago and Pamela Liebman became the president and CEO, conventional wisdom -- and employee chatter -- indicated that the company went from a family-run business to a corporate environment.

Under Barbara Corcoran, agents were offered in-house weekly massages, manicures and shoeshines. The perks have disappeared and so has a bit of the spirit, some brokers say.

"She was a leader that people followed. She appealed to many people," said an industry source who requested anonymity.

Corcoran herself described the company she ran: "It was very much a family atmosphere because I knew every agent and we put every agent first. The agent was the God we served, not the customer."

The insider added that Pamela Liebman is more businesslike and buttoned-up.

But, the culture shift at Corcoran is not really about Liebman versus Barbara Corcoran, Braddock said. It's about being a part of a public conglomerate rather than a private entity.

But real estate pros still praise aspects of Corcoran's operations, particularly the strength of the brand name and the company's comprehensive Web site.

Brokers that stayed at Corcoran or joined since the NRT sale have benefited from Liebman's no-nonsense style, which is responsible for expanding the firm significantly in the Hamptons and Florida. The Corcoran Group declined to comment for the story.

In many ways, Corcoran's rival Elliman shares a similar atmosphere.

They are both large companies under the leadership of a strong woman. CEO Dorothy "Dottie" Herman is seen by some as dynamic and similar to Barbara Corcoran.

"Dottie Herman is like what Barbara Corcoran used to be," said Leonard Steinberg, a Downtown broker who has been with Prudential Douglas Elliman for five years. But, unlike Corcoran, Steinberg added, there is the advantage that Herman is a broker. "She's definitely a broker's broker."

Elliman also declined to comment for the story.

Esther Muller, who runs the Real Estate Academy for Continuing Education, said Herman and chairman Howard Lorber run the company like a mom-and-pop shop despite its size.

While some people thrive on just being with a large company, others at big brokerages strive to create the boutique feeling by partnering up with other sales associates.

"The teams are taking over," Braddock said, "I think much more so." Like individual imprints at large publishers, the giants offer room for branding and individual identities through these groups. At Elliman, that's evident in the Bracha Group and the Jacky Teplitzky Team.

Others, including Michael Shvo and Shaun Osher, have ridden on the coattails of their success at Elliman to start up their own firms. Shvo headed the top producing group at Elliman in 2003, and Osher did the same in 2004.

Osher left two years ago to start up Core Group Marketing.

"I created my firm to provide individual attention," Osher said. "The larger these companies grow, the more they have to operate like a corporation. And buying a piece of real estate is a very personal and not corporate decision."

At another large firm, Halstead, sister company to Brown Harris Stevens, there are still some personal touches.

Richard Hamilton, a senior vice president in the Halstead Village office, gets a five-figure ad budget -- and access to a refrigerator filled with cold drinks, he said. "They put Diet Dr. Pepper in there for me."

Higher-end mid-sized firms

For agents who like the small-company feeling but find a boutique firm to be too stifling and a large brokerage too impersonal, a mid-size company is often a good option.

Mid-sized firms roughly divide into two categories in Manhattan -- the mostly independent, Upper East Side higher-end firms that are cousins of the Uptown boutique brokerages, and middle-market firms aimed at the bulk of the market.

At these mid-sized firms, management is still able to have an influence on the day-to-day affairs of every broker.

Frederick Peters, president of Warburg Realty Partnership, does not concern himself with providing free soda, juice and ice for agents.

"As far as I'm concerned, a lot of that stuff is gimmicky, and that's not what we're about," Peters said.

Peters is more concerned with the preservation of his company's image. "We certainly have high behavioral standards," he said. Keeping his finger on the pulse of the company is important to Peters -- he manages 150 agents in the company's five Manhattan offices and interviews job candidates personally. He also runs office meetings.

Similar to many other high-end brokers and managers interviewed at large and small firms, Peters has a second home in northwestern Connecticut.

"We are an intimate pick that is still a status pick," Peters said. He said Stribling, a rival firm, is most like his own company.

Venturing a bit beyond the company's traditional areas of coverage, Warburg established a luxury brokerage office in Harlem in 2004, and has recently added Downtown offices as well. Peters has expanded the company from 60 to 150 brokers, and from one to five locations since acquiring and renaming the 95-year-old firm Albert B. Ashforth in 1991.

Elizabeth Stribling, owner and president of Stribling & Associates, is as famous for her stylish suits -- all made by French designer Christian Lacroix -- as she is for the zip codes of the homes she markets, including the residences at the Plaza Hotel.

That concern for presentation filters down to her employees. A dress code is strictly enforced in the 200-person company, whether agents are hanging around the office or out showing property. "Jackets for men and a suit or a dress for the ladies," Stribling said via telephone from France. "I'm an old fashioned gal."

Like Cave, Stribling lives the life she sells and the business follows suit. She owns a townhouse in the East 80s and retreats to her two homes in France to escape. Likewise, Stribling & Associates has a Manhattan and European presence. The company has three Manhattan offices -- on the Upper East Side and in Tribeca and Chelsea -- and conducts business in the West End of London and the South of France, Stribling said.

Of all the firms, Stribling said, Brown Harris Stevens most closely matches her company. "I think Brown Harris puts a lot of emphasis on professionalism, comportment, service."

More upscale and smaller than its sister brokerage Halstead Property, both part of privately held Terra Holdings, whose owners include two members of the Zeckendorf real estate family, Brown Harris Stevens focuses on the high end of the market.

Brown Harris is the biggest of the white-shoe brokerages and among the most respected. The firm had 264 agents at the time of The Real Deal's biggest firms survey in April 2006.

"I think in most ways we try to be the luxury brand," said Jim Gricar, an executive vice president and director of residential sales for the West Side division of Brown Harris Stevens. "We tend to have the most luxury, white-shoe image."

Of the department stores in the city, Bergdorf Goodman most closely reflects the image of Brown Harris Stevens, Gricar said, "in terms of size and presence."

Brown Harris Stevens' agents work in seven New York City offices on the East Side, West Side, Downtown and in Brooklyn. The company also has offices in the Hamptons.

Brown Harris Stevens has always been "considered a little bit more buttoned-up," and Halstead is a bit cozier, said Braddock of Braddock + Purcell.

Sotheby's International is another high-end firm with a mid-sized presence in Manhattan. It is different than Stribling, Warburg and Brown Harris Stevens because it is part of the NRT national conglomerate, which includes Coldwell Banker Hunt Kennedy, the Corcoran Group and Citi Habitats -- even if it is a high-end part of that chain.

Kathryn Korte, the new president and CEO of Sotheby's International Realty, said the firm is known for its 200-year history as a luxury brand name and its art auction business, which often refers collectors to buy multimillion dollar homes from the brokerage.

"The Sotheby's auction client is the Sotheby's real estate client," said Korte, who has spent her 22 years in real estate at the firm.

Like Manhattan's boutique firms, Sotheby's hires through word of mouth, and its employees tend to live the lifestyle they sell, said Korte.

Sotheby's Manhattan brokers live on the East and West sides and Downtown, except for one agent who resides in Locust Valley on Long Island, Korte said, and many have second homes in the Hamptons; Litchfield, Connecticut; and Millbrook, NY.

Elliman's Steinberg described the Sotheby's Downtown office as friendly, but "Uptown it's cold, it's like the temperature is on 40 degrees."

Middle-market, mid-sized firms

In a rapidly consolidating market, the future looks grim for middle-market, mid-sized firms, some observers say. Buyouts may soon swallow firms of this size until the market is split between behemoth brokerages and boutiques. Managers at these firms disagree, though it seems that mid-market prosperity comes with affiliation with a larger company.

One mid-sized firm backed by national real estate conglomerate Century 21 is trying to grow into a larger firm by assembling pieces of smaller firms.

The marriage of two distinctly different brokerages, Dwelling Quest and Century 21 Kevin B. Brown, resulted in the 140-person Century 21 NY Metro, which is split between two Manhattan offices, one on East 57th Street and the other in Harlem. The franchise, which does not specialize in the high end of the market, includes Dwelling Quest's hip, tech-savvy brokers and Century 21 Kevin B. Brown's more seasoned and mature brokers.

"The young, upstart side of the business has really carried us," said Michael Simon, president of Century 21 NY Metro.

But the two sides have found a common ground, with Dwelling Quest employees turning to their older colleagues for experience and training, and the Kevin B. Brown folks looking to their younger colleagues for their Interne t know-how, Simon said.

Also part of a franchise with worldwide connections, Coldwell Banker Hunt Kennedy has more than 275 agents in the New York City division, at the company's three Manhattan offices.

Like Century 21, Coldwell Banker is not necessarily a super-luxury market specialist, but JoAnne Kennedy, COO of Coldwell Banker, said that agents at the brokerage will make money and get stock options.

About 20 percent of the New York City business is rentals, Kennedy said. The downtown office is the most laid-back, young and fun of the three Manhattan offices, Kennedy said.

Kennedy lives on Riverside Drive and has a house in Dutchess County. If she had to pick a department store that best represented Coldwell Banker, "we're probably Saks," she said.

Not every middle-market firm is part of a conglomerate. Bellmarc, which has 250 agents in six Manhattan offices, has been going strong for 27 years. Janice Silver, executive vice president and sales manager of Bellmarc's East Side office, said that only about 5 percent of the company's business is rentals.

Neil Binder and Marc Broxmeyer established the Bellmarc Companies in 1979.

While Broxmeyer focuses on the company's real estate investment acquisitions and management, Binder guides the direction of the company, develops the new agent training curriculum and leads many of the seminars.

Muller, of the Academy for Continuing Education, said that Binder is a "born teacher," and likes to hire new agents so he can train them himself. Muller said that Binder's emphasis on education is evident in that agents cannot take a buyer out to see a property unless they have memorized the contract of sale.

Downtown specialists

Just as Uptown has its boutique brokerages, so does Downtown. Like with other firms, their companies' cultures tend to line up with the types of clients they serve. In this case, it's the more artsy Downtown demographic.

Among the many boutique brokerages Downtown, DG Neary Realty and its 30 or so agents (according to the firm's Web site) have had a hold on the Chelsea market for 20 years. In addition to the company's sales and rental business, it's also one of the only residential real estate companies that explicitly caters to the gay community and helps run the Gay Roommate Information Network.

"Pretty much everybody lives in the neighborhood and works in the neighborhood," said managing partner Gil Neary. "We're kind of neighborhood people. I rarely leave the neighborhood."

Neary and his partner Dan Gerstein run a mom-and-pop shop, sitting just an arm's length away from the agents.

The agents can dress very casually; even Neary wears jeans and sneakers when he has no appointments with clients.

Another firm with a big Downtown presence, JC DeNiro & Associates, has 12 agents in its Chelsea office, where Christopher Mathieson, partner and co-owner, is based; 11 in the West Village; and six on the Upper West Side. The other three agents work from home.

Mathieson, who co-founded the four-year-old company with Florida-based 82-year-old Jack DeNiro (who is also Robert De Niro's uncle), puts an emphasis on the appearance of the storefront offices and the appearance of the block.

He is involved in street beautification and designs and buys the furniture for the offices himself. Each desk and chair is unique.

"People think it's a gallery or a furniture store," Mathieson said.

The agents range in age from 24 to the mid-40s and hail from the neighborhoods where they work. Part of the company's business model, Mathieson said, is "where we have offices is where we hire agents. They're part of the fabric of the community."

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Real Estate The September Factor September 18, 2006 Amid talk of “plateaus” and “softening,” the real-estate world is watching this month extra closely. • By S.Jhoanna Robledo   It’s…... Read more >

Real Estate
The September Factor
September 18, 2006
Amid talk of “plateaus” and “softening,” the real-estate world is watching this month extra closely.
• By S.Jhoanna Robledo
 

It’s been a funny sort of summer in the real-estate world, as the July and August doldrums have felt less like the usual quiet and more like the beginning of something bad. Ask Prudential Douglas Elliman broker Lisa Wong, who admits to a little survivor guilt. Though she’s been able to buy and sell properties for a steady trickle of clients—a big difference from the deluge a year or two ago, she does admit—many of her colleagues have found themselves with more time on their hands to agonize over the flattening market. Will it get better? Or worse? “I’ve heard that it’s dead,” she says.

April may be the cruelest month, but many agents say it’s September that’s make-or-break time for them. “It’s a litmus test for what the rest of the year will be like,” says Christopher Mathieson, managing partner at JC DeNiro. “This one’s really important because we want to see if the market’s going to continue to plateau.” And they’re hoping the news is good, given all the pessimism out there. A recent Halstead Property report showed that prices dipped 12 percent from June to July this summer; brokers say August was even more sedate. To make deals stick, “you have to work two or three times harder,” says Wong. “You’re getting lowball offers and calls you’d never get before. For something worth $1.9 million, you’ll get an offer for $1.6, something crazy.” Which explains why many agents look forward to the early fall, when beach homes have been shuttered, kids are back in school, and vacation days are used up. “It’s a renewal,” says Barak Realty’s Catherine Holmes.

Or maybe not. “September is clearly a better gauge than July or August. That being said … brokers are like everybody else. They’re looking for benchmarks. Obviously, if you can create some kind of benchmarking for September [and you reach it], it’s reassuring,” explains Frederick Peters, president of Warburg Realty. But if not, says broker Barbara Fox, it’s no reason to reach for the panic button, either. “We’re coming off the most frenetic market in history, and what we’re seeing now is more normal,” she adds. “This is what people who’ve been in business a while are used to.” Besides, says Mathieson, the calmer market may actually be a blessing. “It can be a little boring,” he says, laughing, “but it’ll give us an opportunity to have a life.”

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September 10, 2006 When a Deal Turns Sour By TERI KARUSH ROGERS THOSE who bought an apartment in the last dozen years or so — and who may well have fought to get it — may be shocked and very likely…... Read more >

September 10, 2006

When a Deal Turns Sour
By TERI KARUSH ROGERS

THOSE who bought an apartment in the last dozen years or so — and who may well have fought to get it — may be shocked and very likely offended to learn that they are actually living in a lemon. They are hardly alone.

“The concept of anything being hard to sell is completely unfamiliar at this point to a whole generation who have grown up in the market since around 1992,” said Frederick W. Peters, the president of Warburg Realty, referring to the fact that in a rising market, buyers are more likely to snatch up flawed properties. “A 20 percent increase in your value of real estate was like a constitutional guarantee, kind of like life, liberty and happiness. But buyers are more anxious in a slower market.”

That anxiety is creating a more expansive crop of so-called lemons, Mr. Peters explained. Defects like airshaft views are becoming deal killers as buyers agonize about how such shortcomings will affect price when it’s time to sell. And with so much more on the market to choose from, buyers are favoring blue-chip properties over cubic zirconia or even diamonds in the rough.

So what is a lemon these days? Rising construction costs and more onerous construction rules in some co-ops have made a lemon out of anything that needs a gut renovation, once a mainstay of up and down markets alike. But many problems — like impaired views, lack of light and high maintenance or common charges — retain their repellent qualities in any slow market.

Other immutable lemons include properties with extraordinary flip taxes, which may limit sellers’ ability to negotiate, and buildings that don’t own the ground beneath them.

Consider the young couple who bought an apartment in an Upper East Side postwar building with a land lease in April 2004. They thought they had negotiated a good deal, paying around $600,000 for a two-bedroom, two-bath unit on the 11th floor with open city views and a full dining room.

Then they executed “the perfect renovation for this kind of apartment,” said Audrey F. Ruden, the Prudential Douglas Elliman broker who recently attempted to sell it. “They didn’t overimprove it — they paid a lot of attention to the details that matter, installing a washer/dryer, a great kitchen and bathrooms, and windows with extra insulation in the master bedroom so it was soundproofed.”

The couple listed it in April for $1.15 million. The apartment sparked intense interest from the 40 or so buyers who saw it, Ms. Ruden said. But the building itself sat on leased land scheduled to be revalued in December and every six years thereafter, an unusually short period for land leases, which are normally recalibrated every 20 or 30 years, or even longer.

Because of rocketing real estate values in recent years, much higher land-lease costs could increase the apartment’s monthly maintenance of $2,170 by nearly $1,000. The apartment’s only bid, for slightly under its asking price, failed to go forward.

Meanwhile, the remaining would-be buyers drifted away wistfully as they — or their lawyers — noted the likely spike in maintenance, Ms. Ruden said. The sellers took the apartment off the market in June; they plan to try again once the land lease is recalibrated in December.

As with any citrus-y drawbacks, often the best strategy for a stricken seller is to offset flaws with a lower price. “There is a lid for every pot,” said Barbara Fox, the president of the Fox Residential Group. “Everything is salable for a price.”

Last year, Ms. Fox herself bought what she described as a lemon: a two-bedroom East 70’s penthouse with a wraparound terrace, owned by a 50-ish Austrian bachelor, that had been on the market for more than a year.

“Every wall had either some sort of gun or saber,” she recalled. “Also, every book on the bookshelves was about Adolf Hitler or the Third Reich. The apartment had not sold because the vibes were so negative.”

The asking price for the prewar co-op plunged from $4.3 million, to $3.99 million, to $3.650 million. Ms. Fox and her husband, James Freund, an author, mediator and retired lawyer, bought it for $3.3 million in June 2005. “We gutted every single interior wall,’’ she said. “We just purged it all.”

But pointing to a major turnabout in the market, Ms. Fox and other brokers say that fewer buyers are willing to shoulder increasingly grueling gut renovations. The shifting attitude toward fixer-uppers seems to contradict the proliferation of home-improvement shows on television over the past decade.

“In the early 90’s, during the recession, there was a whole cottage industry of people buying apartments, renovating and flipping,” said Jonathan J. Miller, the president of the Miller Samuel appraisal company. Next, during the housing boom, “there was such tight supply that people would buy anything,” he said.

One reason for the growing disinclination toward renovation is that while the discount for a wreck has remained steady at around 20 to 25 percent, the cost of construction has soared, Mr. Miller said.

Mr. Peters of Warburg Realty blamed Hurricane Katrina for the spike in the price of building materials. “It’s hard to do a decent renovation in New York now for much less than $200 a square foot,’’ he said, “and even that’s relatively low.”

But cultural change may also be forcing the fixer-upper’s fall from grace.

“In New York, every year it seems people work longer hours, so the truth of the matter is that the number of people prepared to undertake renovation seems to grow smaller and smaller,” Mr. Peters said. “They don’t want to devote their leisure time to supervising a renovation.”

Also, the intensive marketing sparked by thousands of new condominiums may have stoked a desire for immediate gratification and a tropism toward brand-new apartments. “I don’t know if all those new condos were built in response to a new demographic that just had no patience for renovation or if the new condos created the culture,” Mr. Peters said. “I don’t know if it’s the chicken or the egg.”

Ray Kiswani, a senior vice president of Bellmarc, faced a double whammy when he was hired to market “an absolutely unlivable” wreck, a 500-square-foot junior one-bedroom in a prewar co-op on West 86th Street. The sponsor had tried to sell it for almost a year.

“There was no kitchen, only a sink, and the wires were hanging from the ceilings,” Mr. Kiswani said. “There were no hardwood floors, just cracked concrete.”

In addition, he said, maintenance was more than $2 per square foot “because when the building was converted to a co-op, the attorney who did the offering plan thought that the attached terrace belonged to the apartment.” Standard maintenance charges run about $1.50 a square foot.

Mr. Kiswani asked an architect to create a set of renovation plans so that buyers could see past the dismemberment, and also persuaded the sponsor to offer a $300 per month rebate on the maintenance for three years. Two weeks after the apartment was listed for around $400,000, it sold in a two-way bidding war to Javier Frias, 27.

Mr. Frias is negotiating to buy the terrace from the building so that he can create a two-bedroom, two-bath apartment. But it’s taking months longer than he expected, which is another reason wrecks are less popular than ever.

Another reason is that building boards are taking a dim view of renovations. “The boards and the buildings have gotten so much tougher on their alteration agreements,’’ said Diane M. Ramirez, president of Halstead Property. “It’s almost like one building will think of something” — yet another rule — “and another will add it. On the top of the list is ‘summer renovations only.’ What if you buy an apartment in June?

“You have to wait till the next summer. So added to the cost of the apartment is a year’s worth of carrying charges. And if there is a renovation following yours, you sometimes have to go to the back of the list again to finish up.”

Just like apartments that need extensive renovations, a dreadful view can scare buyers away. The price penalty could be “10 to 20 percent if you’re looking at an airshaft or in very close proximity to a building, as compared to clearing the roofline of the adjacent building,” Mr. Miller said.

So how close is too close? “If you’re looking out the window and can read the headlines in the person’s paper across the way, it’s going to be tough to sell,” said Marc G. Windheuser, an associate broker at Prudential Douglas Elliman.

Jorden Tepper, a vice president and a managing director of Manhattan Apartments Inc. and of Manhattan Lofts Inc., said: “It’s not views especially but having some kind of openness. If you’re looking into a brick wall, it will take a lot longer to sell.”

Or not, with the right spin or the right buyer.

“I used to hold my breath and say, ‘This would make a great media room,’ ” said Harriet M. Norris, a sales agent at Prudential Douglas Elliman, who was referring to a bedroom that faced a wall in a $4.5 million Central Park West apartment she marketed last year. She eventually sold the apartment to a banker who planned to use the view-challenged bedroom for a small child.

Dim rooms have also been pitched as photographer’s darkrooms or meditation spaces. “Frequently you can compensate if you decorate well and have clever lighting,” said Mr. Peters, who suggested installing sheer curtains backed by small light bulbs that mimic daylight. “It improves the situation enormously. You’re less aware of something ugly outside the window, and you create the illusion of light coming in.”

Other properties prone to purgatory include walk-ups — particularly those on the upper floors, which are typically coveted by only a narrow subset of buyers. “Usually it’s a younger person who’s just out of school who’s maybe already lived in a walk-up building,” said Jill Sloane, a senior vice president of Halstead. But buyers accustomed to living in an elevator building or those with young children are much less interested.

The problem posed by a different sort of walk-up — the penthouse apartment, often one added later, that must be reached by a flight of stairs after an elevator ride — can occasionally be surmounted, literally: “Sometimes with rich people, what happens is they figure out a way to bring the elevator up to their apartment,” said Ms. Ruden of Prudential Douglas Elliman.

Brokers say apartments with tenants living in them, particularly messy tenants, are hard to sell, as are those owned by divorcing couples when one spouse is not in favor of moving and attempts to sabotage everything from showings (like canceling them at the last minute or loitering on the premises) to appraisals (pointing out the apartment’s every fault).

Overly customized apartments (“I’ve seen stuff like bathroom tiles bearing the faces of the owner’s kids,” Mr. Miller said) or overly improved apartments (a glorious renovation in a rundown building) do not fare well.

Maintenance much higher than $1.50 per square foot in a full-service building can also dull a buyer’s appetite, as can a prohibitively high flip tax that handicaps a seller’s willingness or ability to negotiate. A flip tax is money collected by a co-op board from a seller; it can be based on the number of shares held, although it is often a percentage of the sale price or of the seller’s profit. Although very high flip taxes can have a negative impact on a sale, the opposite could be true for a more modest flip tax, Mr. Miller pointed out, because it helps the building finance future capital improvements.

Ms. Sloane is currently listing a $499,000 one-bedroom co-op in move-in condition in a brownstone on West 88th Street. It has 12-foot ceilings, a $521 maintenance and a whopping 33 percent flip tax. It was on the market for eight months with two other brokers and after a $100,000 price reduction, has been listed with Ms. Sloane since June. She said it has received no offers.

Fortunately for sellers, it’s tougher nowadays to be disqualified on the basis of location. “There are no neighborhoods anymore — it’s just Manhattan,” said Ms. Ramirez of Halstead. “People have their preferences, but it’s just, ‘Find me a great apartment.’ Whereas in the past everything was advertised ‘East of Lexington.’ ”

While brokers contend that the one sure way to make lemonade is to lower an apartment’s price, sellers beg to differ. Much like parents who are blind to their children’s double chins, owners who were grateful to lay their hands on an apartment — any apartment — during the recent boom resist the notion that today’s buyers may be less willing to overlook its drawbacks.

“I have an apartment I absolutely love,” said Caroline Dawson, 30, who paid $379,000 two years ago for a duplex in a walk-up building on West 49th Street between Ninth and 10th Avenues. The 700-square-foot apartment has two full baths, high ceilings on the second level and a bedroom and sitting area in the partly-below-ground basement.

Ms. Dawson, who certifies fitness instructors, is moving to New England and has put the apartment on the market in May for $499,000. Her broker, Ms. Sloane, cited its ground-floor location as a turnoff for many buyers. “There’s been lots of interest,’’ she said, “but no one has pulled the trigger.”

Ms. Dawson said she didn’t look beyond the low maintenance (now $490 a month) and certain aspects of the apartment’s aesthetic appeal when she bought it, failing to consider how the ground-floor issue might downgrade the duplex’s charm.

“I never once considered the resale value of the apartment,” she said, pointing out the positive aspects of a basement bedroom insulated against the summer heat and winter chill. “Maybe I should have.”

 

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August 2006 Manhattan real estate feels pinch from stock market Link between Dow, New York real estate hard to pin down, but both now in rockier straits By Lauren Elkies    In normal conditions,…... Read more >

August 2006
Manhattan real estate feels pinch from stock market

Link between Dow, New York real estate hard to pin down, but both now in rockier straits

By Lauren Elkies 
 

In normal conditions, investors turn to stocks when real estate offers little promise, and head for property when equity returns taper off.

However, the last few months have shown an unwelcome correlation between two generally separate investment arenas: The benchmark Dow Jones Industrial Average of blue chip stocks sagged 4.3 percent from mid-April through mid-July and, at the same time, most key real estate market indicators sagged in New York City. Inventory rose and time on the market increased, though high-end properties kept median prices fairly constant.

But pundits differ on how stock market performance affects real estate prices.

How it affects New York real estate purchases is a bit more clear. It's more about the volume than its direction, said Jonathan Miller of appraisal firm Miller Samuel.

"It's a big misconception that the directions of indexes allow you to anticipate the real estate market," he said. "It's the churn, the volume of trades, that would likely have more of an impact on real estate."

Greater trade volume generates greater profits, and in a city where high-end real estate is bought and sold by the titans of finance, there's a link between yearly bonuses and apartment purchases.

"I think when you look at Wall Street, the first thing to zero in on is income and jobs," Miller said. "When everybody makes more money, it affects real estate purchases."

While the stock market is not on pace with last year's, the economy is doing quite well, said Susan Wachter, professor of real estate and finance at the Wharton School of business at the University of Pennsylvania. Indeed, the number of private sector jobs nationwide increased by 368,000 in June, according to a report released by Automatic Data Processing, a payroll services company.

Real estate established itself as a separate asset class in 2000, following the collapse of the stock market and the end of the technology boom, said Frederick Peters, president of Warburg Realty Partnership.

"Certainly [the market] affects real estate purchasing," he said. "It doesn't affect it precisely the way it used to." Before the crash, the real estate market would imitate the stock market six months later, Peters said.

"People, when they're unsure about the stock market's future, they want something they can see, touch, feel," said Gregory Heym, the chief economist for the brokerages of Terra Holdings, including Brown Harris Stevens and Halstead.

The Dow Jones Industrial Average and the average Manhattan apartment sale price have seemed to rise together over the years, a chart (below) by Miller Samuel shows. But Miller noted that there is no correlation between the two graphs; their similarity is coincidental, he said.

While there's uncertainty about what bonuses will be in December, people in the finance industry are more preoccupied with the amount Federal Reserve Chairman Ben Bernanke will raise interest rates, Heym said. Some economists worry that the Fed will overinflate interest rates.

At the end of June, the 30-year fixed mortgage rate was 6.8 percent, up from 5.8 percent at the same point last year, but still nearer to historic lows than prohibitive highs.

Rising interest rates don't just affect mortgage payments, but also affect the overall economy, which in turn affects real estate, Peters of Warburg said.

"I think the issue with interest rates is what are they a reflection of," Peters said. "To the degree that interest rate changes are a reflection of the Fed concern with inflation and to the degree that concern with inflation could slow down the whole economy, it definitely affects my industry."

Generally, economic factors work in concert and affect both the real estate market and stock market, rather than creating a direct correlation between stocks and real estate.

"Fluctuations on Wall Street always affect real estate buying," said Steven Spinola, president of the Real Estate Board of New York. "How Wall Street goes, so goes New York City real estate."

Sometimes the financial market does not seem to have any relationship to the real estate industry.

"The greatest increase in real estate was when the market was doing nothing between 2002 and 2005," said Ron Gallen, a Manhattan financial counselor. "That was an unbelievable boom."

On Wall Street, (bonus) size matters

Of course, bonus size is driving real estate purchasing decisions for Wall Street bigwigs -- and this year's dividends climbed to a record level.

The yearly payouts by Wall Street firms contribute more to decisions affecting New York real estate than the movement of the market, said Ron Gallen, a Manhattan financial counselor.

"The record bonuses are making people buy higher-priced apartments," said Debbie Baum, senior associate broker at the Corcoran Group.

Bonuses have "empowered those people that got really big bonuses to go ahead with the real estate they were already hoping to buy," said Frederick Peters, president of Warburg Realty Partnership.

A real estate purchase does not always immediately follow receipt of a bonus.

"People that are getting these bonuses and are buying real estate may not buy the first year," said real estate appraiser Jonathan Miller. "They have it in their purchase arsenal."

 

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Running the real estate numbers ragged Oft-quoted facts and figures about New York markets require second look and a critical eye By John McMurray In early summer, the Real Estate Board of New York issued…... Read more >

Running the real estate numbers ragged

Oft-quoted facts and figures about New York markets require second look and a critical eye

By John McMurray

In early summer, the Real Estate Board of New York issued a press release saying that median sale prices for Manhattan condominiums rose by 22 percent in the first quarter of 2006 relative to one year ago, while sale prices for co-operatives were up by 5 percent during the same period.

Although the figures in the REBNY release are correct to the extent that transaction data is available, those numbers don't tell the whole story about getting a correct interpretation of real estate data.

In Manhattan, where the majority of co-op sales data is private, most prices are not made public. So price data for co-operatives is often incomplete (though that looks likely to change under a bill expected to be signed into law by Gov. Pataki making co-op sales data public), and the numbers that circulate are inadequate. At the same time, median price figures can vary widely from quarter to quarter since one very large sale can raise the median significantly. Price-per-square foot is a much more reliable indicator, though that figure, too, is often not available for co-op sales.

"Whenever a market report is released, it's always possible to take a single statistic and harp on it," says Greg Heym, director of research and chief economist for Halstead Property in Manhattan. "People may say, 'Look, this area of the market is slowing, and here's the number that shows it.' That's why it's always important to use statistics like average or median price in conjunction with other indicators to get an accurate idea of what's happening."

Also, in Manhattan, many commercial brokerages do not use standardized neighborhood boundaries. As a consequence, the vacancy and rent data which brokerages publish in their respective real estate reports can differ widely over what may not be the same turf.

According to Maria Sciola, senior managing director for national research at Cushman & Wakefield, "When you see variations between companies, it's usually due to how the geographic boundaries are assigned and how spaces are defined. Do they include all buildings? Is it just buildings over a certain size? Is it only buildings that have space available? Answering those questions differently can yield different results. Even with these variations, though, companies agree on the overall direction that things are going 99 percent of the time."

Relying on national housing data can also be problematic to home buyers, says Frederick Peters, president of Manhattan-based brokerage Warburg Realty.

"Buyers should always rely on regional data because we're just too big a country for what's going on in Spokane or Miami to be germane to our market," Peters said. "After the oil bust, the Texas housing market was in the doldrums for decades, but that had no impact on what was going on in Manhattan. You also need to make distinctions about why people are buying and selling. A market where second-home purchasers and investors are putting no money down is very different from Manhattan, where people are regularly putting down 50 percent when buying co-ops."

Peters also believes that the news media should be vigilant in specifically defining the housing statistics that they discuss. Moreover, in writing about April closings, for instance, Peters contends the media should stress that those closings are really an indicator of housing activity two or three months earlier. By not doing so, Peters feels the media hypes the data as being inappropriately current.

"Making that distinction doesn't require rocket science," he says. "Nonetheless, it's rarely acknowledged."

In housing data, statistical variations abound, and the average buyer can feel overwhelmed. "You can never have too much data or too much information when it comes to housing," says Sciola. "The challenge is being able to interpret it."

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A REWARDING MARKET FOR SAVVY BUYERS AND SENSIBLE SELLERS 2006 Mid-Year Market Review By: Frederick W. Peters, President, Warburg Realty Partnership New York City in the first half of 2006 has seen a stable…... Read more >

A REWARDING MARKET FOR SAVVY BUYERS AND SENSIBLE SELLERS
2006 Mid-Year Market Review

By: Frederick W. Peters, President, Warburg Realty Partnership

New York City in the first half of 2006 has seen a stable active market with little real price growth over the last quarter of 2005. Supported by a strong national economy and local job growth fueled by a busy Wall Street, and controlled by rising interest rates and buyer caution regarding overpricing, this market has rewarded the careful buyer and the sensible seller. Well priced properties have sold briskly, many in overbids, as have both the highest end new construction in the luxury areas and those projects whose less traditional locations have been offset by reasonable pricing. Overpriced properties on the market in every part of the city have languished, causing sellers to lower these prices to more reasonable levels in order to become competitive. This phenomenon has been misinterpreted by the press, who tout it as an indication of a weakening market. It is not.

Certainly the market is much different from that of late 2004 and early 2005. We do not have runaway price increases. Every property, no matter its quality or provenance, does not attract several bidders who feel they must offer the asking price to even get into the game. As sellers continue to ask overly ambitious prices for their properties, they linger longer in the marketplace. Inventories rise. Thousands of new condominiums move into the marketplace, boosting the stock of available properties still more. Reports are no longer about the bubble bursting, but about gradual deflation, making buyers already fearful about making a mistake even more anxious.

Actually today’s residential market is filled with buyer opportunities. In the one bedroom and small two bedroom markets, ambitious sellers have priced many properties beyond their value. As a result there are many choices for the buyer, who can leverage one property against another to make sure he or she gets the best possible price. Buyers, who in recent years have been reluctant to make offers because they felt anything below the full price would fail to interest the seller, should now be prepared to negotiate. If a property has lingered on the market, it is frequently possible to offer 10% to 15% below the asking price and get a seller response. As rents have stabilized and increased, and landlords have become less flexible about giveaways, buying is once again a better and more intelligent financial option for many consumers eager to both build equity and get a stakehold in the New York market.

The family apartment market has expanded to every corner of the city. Conversions in northern Manhattan, new condominiums and conversions in Harlem, high rises appearing along the Broadway corridor between 90th and 106th Streets on the Upper West Sides, and cranes on every corner in midtown both East and West, in the East Village and on the lower East Side, in Tribeca, in Williamsburg and Greenpoint in Brooklyn, are all adding inventory to the options available for this demographic group. Families are being courted everywhere. While the prices of the traditional pre-war five, six, seven and eight rooms co-ops on the Upper East and West Sides have held firm and even risen slightly, there are opportunities at a wide range of different prices in the neighborhoods mentioned above, as well as Brooklyn’s exquisite brownstone areas, Long Island City, and for the adventurous SoBro, the newly rechristened South Bronx. And each, with its new and renovated housing stock, pocket parks and gradually increasing influx of services, is attracting its own enthusiasts.

The luxury end of the residential market has never been more active. Here there is never quite enough inventory along the fabled avenues and streets of the city’s most elite neighborhoods. Wall Street executives, hedge fund pioneers, and the wealthy from South America, Europe, Russia, Korea, China, and around the world wait anxiously for a new alternative and then rush to see it, once again bidding against one another to secure their piece of the top of the rock. The very large co-ops and condos in the most desired buildings are quickly bought up for prices at $4000 per square foot and higher, while the ultra luxury townhouse market is depleted. For these properties 2006 has been a record breaking year.

For the consumer the current market is difficult to penetrate. The press reports stable or slightly increased prices but uses increased inventories and slowing rates of increase to predict a downturn. The national economy is strong, but the Federal Reserve fears inflation and interest rates have mounted steadily for a year and a half.

At Warburg we recommend sticking to fundamentals. Do not buy if your goal is to double your money in twelve to eighteen months. New York real estate is a great investment, but it is best to have a time horizon of at least three to five years. There are a range of options, from introductory units to the most luxurious, in almost every neighborhood. Do your homework, both on line and through your broker, to determine which area and property type best suits your needs. Buy and sell in the same market. In our experience, those who try to sell at the top and buy at the bottom only outwit themselves 99% of the time. And don’t think of your home primarily as an investment. This is the world’s greatest city, with an extraordinary diversity of neighborhoods, of ethnic groups, of arts and culture, of restaurants, schools, and experiences. More than anything else, your home in New York is your passport to the richness of life in this amazing place.

 

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Are There Enough Buyers to Go Around? By JOSH BARBANEL CONDOMINIUMS have become a familiar sight in Manhattan in the last couple of years, punctuating the skyline from Battery Park to Harlem and most…... Read more >

Are There Enough Buyers to Go Around?
By JOSH BARBANEL

CONDOMINIUMS have become a familiar sight in Manhattan in the last couple of years, punctuating the skyline from Battery Park to Harlem and most neighborhoods in between.

But as these condos are marketed — each carrying sky-high prices and a competitive list of amenities — and still more are breaking ground, it is hard not to wonder whether there are enough buyers to go around.

Not only are there thousands of condos currently on the market, but a review of building plans submitted by developers to the state attorney general's office shows that this building binge has not yet slowed down and may produce a supply of new apartments that could be around for a while.

So far, applications have been submitted for more than 24,000 condominium apartments since January 2004, 7,000 of them in the first half of this year alone. This increase in filings comes as supply in the current market has been rising steadily, with broker listings nearly doubling since 2004. And since many developers list only a sampling of apartments in new buildings, the numbers of apartments available for sale is probably significantly larger than the inventory listed with brokers.

Still, despite caution by some lenders and some customers, many others, including condo developers, brokers and buyers who are still signing contracts and putting down hefty deposits, say they have an abiding faith in the resilience of the market in Manhattan.

Sales slowed sharply at the beginning of the year, when buyers hesitated because of the uncertainty about the direction of housing prices. But now brokers say that the pace is picking up, and they are seeing a slow but steady stream of visitors to sales offices and of contracts signed for new apartments.

Asking prices on new developments are no longer rising sharply, but confounding skeptics, they have remained fairly steady, at prices that are higher than buyers ever imagined five or 10 years ago. Developers say they are, for the most part, holding the line on prices, convinced that they have produced the right product for the right market.

"How strong is the market for $2 million apartments? Extraordinarily strong," said Gary Barnett, the president of Extell Development, which is currently marketing six condominium projects across Manhattan. "The market for $3 million and $4 million apartments is strong, too."

He said that the rising prices for land, soaring construction costs and careful reviews by lenders would eliminate weaker projects now under development, especially those by inexperienced developers, limiting the growth in supply over the next few years.

Jeffrey Jackson, the president of Mitchell, Maxwell & Jackson, an appraisal company, said he had been consulted on half a dozen projects that may be postponed or converted to rentals.

The Manhattan market is subject to the same laws of supply and demand as the rest of the country. But the bullish view of the Manhattan real estate market is based on the belief that it is unique. The first tenet is that it is a magnet for wealth from across the country and around the world. The second tenet is that there is a strong demand for larger apartments with higher ceilings, open views and well-designed kitchens and bathrooms — the type of apartments that have not been built in large numbers in a generation.

While rising interest rates may reduce the purchasing power of middle-income buyers, the market for the affluent will remain strong, brokers say, as the local economy remains solid; incomes for hedge fund managers, investment bankers and law partners remain high; and buyers from across the globe continue to view New York as a good place to invest.

"There is a tremendous amount of demand, and there is little housing in New York," said Stephen G. Kliegerman, the director of marketing development for Halstead Property. "There is a desire to live in New York City, and as fuel costs go up, even more people will want to live here."

Or as Mr. Barnett of Extell put it, "New York is the epicenter of the world, and everybody wants to own something here."

Of course, even the Manhattan market has had its low points. Park Avenue palaces faced foreclosure in the Depression, and town houses on the West Side sold for a pittance in the 1950's. In the 1980's, after a wave of apartment construction and conversions, many developers faced foreclosure. And the terrorist attack in 2001 sent rumbles through the market.

Frederick W. Peters, the president of Warburg Realty, said that he had experienced several downturns over the decades and likened the experience to driving off a cliff. And he does not see that occurring now. "The fact that we have experienced minimal price growth for a year suggests that the market has slowed down," he said. "The 'driving off a cliff' experience doesn't seem to be happening."

Jonathan J. Miller, an appraiser and the president of Miller Samuel, said he believed that many prospective buyers were ready to act but were holding back because of market uncertainty. At the same time, he said, Manhattan developers were holding the line on prices, confident that the new condos were worth their high prices.

"There are a lot of buyers, with money to spend, on the sidelines," Mr. Miller said.

Susan Petri, who works in communications for American Express, said that she and her husband have been shopping for a condo and that they found the same high prices at every place they looked. "This is New York — the demand will always exceed the supply," she said. "Everyone wants to live here."

But her husband, Roland, was more skeptical. They are trying to decide whether to settle in New York, where she now works, or in Scottsdale, Ariz., where he practices emergency medicine. He observed that the amenities touted in buildings in Manhattan were not that different from those found in new homes in Scottsdale and wondered whether they should wait to see if prices came down.

Julia Bohan said she carefully researched the housing market, systematically comparing prices per square foot, before signing a contract a few weeks ago to buy an apartment at the Ariel East, one of the two glass towers facing each other across Broadway at 99th Street. But in the end, she said she relied as much on intuition as cold, hard facts.

Two years had passed since her husband died, and she was in contract to sell their Upper East Side apartment, with a wraparound terrace and park views. The sale price was high enough to enable her to spend about $2 million at the Ariel for about 2,000 square feet of space, and put away some money for tuition, too. The apartment had lots of space at a better price than she found elsewhere in Manhattan.

"It is scary to do it alone after being married for 15 years," she said, "But I really feel confident that it is a solid investment. And it feels right, too.

During the years when prices were rising sharply and apartments were scarce, buyers were conditioned not to ask for concessions. If the price was too high, they would walk away. Today, Mr. Miller has this advice to buyers: "Always try to negotiate. Developers may be more open than in past years to negotiating. You have to ask."

Pamela Liebman, the president of the Corcoran Group, agreed but added that the developer's response would depend on "the mind-set of the building, how the building is doing."

"We have buildings where we have not done one penny of negotiation," she said.

During the ultrahot seller's market a few years ago, some developers would submit weekly or even daily amendments to offering plans, raising prices on new condominiums. Price increases come less frequently now, and a few developers have filed amendments lowering prices, though they attribute that to pricing errors, rather than to a faltering market.

At the Avery, which Extell is building on Riverside Boulevard at West 65th Street, buyers learned that many of the closing costs would be picked up by the developer, up to a total of 3.7 percent of the purchase price. But that's down from the 5 percent offered a few months ago.

Mr. Barnett, the Avery's developer, said that close to half of the apartments were now sold and as sales continued, help with closing costs would end entirely.

At 170 East End Avenue, Skyline Developers' 19-story glass tower near 87th Street, brokers were saying earlier this year that sales were slow. Orin Wilf, Skyline's president, disputed this but added, "We have been negotiable on our prices."

"We feel that our sales have been very steady because we are willing to work with customers," he said. "If a customer walks into our sales office and wants to spend $5 million on an apartment, and the apartment they want is $5.4 million, over 99 percent of the time the deal gets done."

He said that he had not offered to pay closing costs and expects prices to tighten in the future. "At almost 50 percent sold, we plan on doing less negotiations and more selling at higher prices."

When sales were slow at the Ariel East, Extell filed an amendment with the attorney general lowering prices on 42 apartments, with cuts ranging from $5,000 to $260,000 for one sixth-floor apartment. But prices on some upper-floor apartments were raised.

Mr. Barnett said that the price cuts were made because apartments in the Ariel West building had been selling faster, and that he wanted to encourage buyers to consider Ariel East. He said that when the price changes at the two condominiums were combined, prices actually went up.

At another smaller project, the Abbey, a former parish building on East 16th Street being converted to condominiums, most of the apartments sold for the asking price, or close to it. But according to property records, one apartment, a duplex on the top two floors, sold at a discount of $500,000, or about 27 percent below the asking price. Eight of 31 apartments are still listed as available.

The developer, Herbert Hirsch, said that he became convinced that a sloping triangular roof limited the use of some of the top floor of the duplex, so he reduced the price to account for this. He said buyers were out there looking but were worried by press accounts about the market and were postponing purchases.

"From the developers' standpoint the market talks to you," he said. "The market tells you what your property is worth, to the extent that people come through and love your product and pay the prices."

The New York Times reviewed condominium plans for larger projects — those with at least 30 units or those valued at more than $20 million — filed with the attorney general's office, which oversees all co-op and condominium offering plans for their compliance with state laws. But in addition to apartments, the listings of condominium units provided by the state often included retail stores, storage lockers and parking spaces, sometimes even wine cellars. So to get an accurate estimate of the number of apartments in the pipeline, those filings were compared with records from the New York City Buildings Department.

The review found that applications for 24,400 apartments in 240 larger projects in Manhattan and 5,000 apartments in 75 projects in Brooklyn had been submitted since January 2004. Of these, by the middle of June more than 13,000 had been approved for sale in Manhattan and 2,900 in Brooklyn. It is not known how many of these apartments were actually built and, if built, how many have been sold.

What is known is that the 24,400 applications far exceed the number of apartments actually on the market.

Last week, a report by Prudential Douglas Elliman put the current inventory at 7,640 apartments, both co-ops and condominiums, up from 3,922 in 2004. In recent years, the total number of annual apartment sales in Manhattan has been estimated at 10,000 to 12,000.

The filings with the attorney general's office also show that many newer projects, including conversions of rental buildings, are also in the works. There were 10,800 apartments in large Manhattan projects still awaiting approval for sale, including the 7,250 apartments in 59 projects submitted this year. About 2,300 apartments in Brooklyn are also awaiting approval for sale. If all these apartments are actually built, they could weigh on the market for several years to come.

But many developers said they believed that the condominium market was beginning to correct itself, and that the weakest projects may never get built. Banks, worried about overbuilding, have tightened up on financing. The boom in construction has pushed up land prices and construction costs, making fewer projects profitable.

In the meantime, some developers are not cutting prices no matter what. At 165 Charles Street, Izak Senbahar thought he had his finger on the pulse of the market when he put up a 16-story glass building designed by Richard Meier along the Hudson River, next door to two other Meier projects, and set prices as high as $20 million for the 31 apartments.

But last October, after about half the building was in contract, sales stalled. Not a single contract was signed for about six months, until April 2006.

Mr. Senbahar received a series of offers below the asking prices and could have sold out long ago, said James Lansill, a senior managing director of the Sunshine Group, which is marketing the building. Even brokers urged him to cut his prices, but he would not.

"He placed his bet and stuck with his bet," Mr. Lansill said. "He had a belief in his goal that is unwavering. He just said when the building is completed, people are going to come and buy this."

After vacant apartments were used for an exhibition of modern furniture earlier this year, sales took off once more, Mr. Lansill said. Since April, he said, five apartments have been sold, leaving five apartments available.

Two of those five apartments are being combined into a larger unit, he said, and a price increase was just filed with the attorney general's office.

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A Slower Market, With Wall Street Fizz By STEPHANIE ROSENBLOOM FOR four years, people feasted on Manhattan's robust real estate market with a kind of bacchanalian revelry, so when prophesies of a bubble…... Read more >

A Slower Market,
With Wall Street Fizz
By STEPHANIE ROSENBLOOM

FOR four years, people feasted on Manhattan's robust real estate market with a kind of bacchanalian revelry, so when prophesies of a bubble began circulating last year, many braced for the worst.

Today the state of the market is certainly more sober and measured. The pace has slowed, there is more inventory and buyers are taking time to shop around. And while some brokers report a significant bump in sales thanks to record Wall Street bonuses estimated at $21.5 billion, others say they have not noticed so much as a blip. Still, two months into 2006, a death knell has yet to chime.

In many ways the new year ushered in a better environment for buyers. There is more inventory to peruse (up 35.6 percent over January 2005 according to Jonathan J. Miller, president of the Miller Samuel appraisal firm). Properties are staying on the market longer (137 days in the fourth quarter of 2005, up from 96 days in the final quarter of 2004, according to Miller Samuel).

At most price levels, buyers are likely to enjoy more attention from their broker and more elbow room at open houses. And many sellers have accepted that the market is no longer red hot — and have priced their apartments accordingly. Brokers can schedule appointments in advance and show a half dozen properties instead of asking clients to make split-second decisions.

"Buyers find it much more comfortable," said Patricia Cliff, a senior vice president and the director of European sales for the Corcoran Group. "They can comparison shop."

Gone, too, are the sellers who put their apartments on the market solely to cash out. Those whose apartments are on the market today tend to want to do business and are often willing to negotiate.

"The problem was you really could not differentiate between serious sellers and those that were testing the market," said Jacky Teplitzky, an executive vice president at Prudential Douglas Elliman, referring to 2005.

Buyers seem to be more cautious now, a feeling that manifests itself in a desire to view as much inventory as possible.

"Even if they see the apartment and are in love, they want to see what is out there before they put in an offer," Ms. Teplitzky said.

Indeed, many brokers think a new class of educated buyers has emerged, one that refuses to overpay and has a good grasp on property values. "People are taking notes, pictures with their cellphones, coming back the next week and asking for building financials," said Richard J. Ingenito, an associate broker at Bellmarc Realty. "These buyers seem to really know their stuff."

That buyers do their homework, are able to see more inventory and have time to deliberate also means that fewer deals fall through because there are fewer last-minute cases of cold feet, Ms. Teplitzky said. She pointed out, however, that this is not the time to buy something with the intention of selling it next year. "This is a market you're in for the long haul," she said, meaning five to seven years.

Marc Marin, 39, a management consultant who signed a contract on his first apartment — a two-bedroom co-op on the Upper West Side — last week, did not know if it was the best time to buy, but he figured he would be living there for a while and would not be distraught if the market dips.

Brian Lewis, a senior vice president at Halstead Property, said Mr. Marin searched for apartments for about two months and bought his place on Riverside Drive, which is in the $900,000 range, for below the asking price.

"It never gets easier, it seems," Mr. Marin said. "You just need to take the plunge."

Taking the plunge felt a lot better now than it did six months ago, he said, adding that buying in 2005 was somewhat intimidating. "I was feeling a little bit more power in this market," he said. "You had some negotiating room."

While that may be good news for buyers, it can mean more work for brokers. "I feel like I'm showing like mad and it takes forever to get an offer," said Sarah Smith, a sales associate at Warburg Realty.

Ms. Smith, like other brokers, said the calmer market makes for a more pleasant work environment, though the offers she is getting are lower than they had been in recent years. Her open houses have been busy, yet she has not noticed an influx of Wall Street bonus money.

In January, State Comptroller Alan G. Hevesi estimated that Wall Street bonuses would be a record $21.5 billion in 2005 (the previous record, in 2000, was $19.5 billion). The average bonus was also estimated to be a record $125,500, up from $114,300 in 2004.

"We are so dependent on the money from Wall Street," said Mr. Lewis. "If Wall Street is a shark, the real estate industry is the thing that cleans its teeth."

Bonuses tend to trickle down and jump-start activity across the board. But not everyone is feeling the ripples of the lush payouts. Mr. Ingenito of Bellmarc said that while he has had about 30 to 40 people at recent open houses, he has not noticed a major impact from Wall Street money.

"There are a lot of people waiting to see what will happen," he said. "If it looks like interest rates will go up rapidly, that should change."

Many buyers are content to play wait-and-see, hoping prices will fall. Not surprisingly, no broker predicted that prices would continue to decline. Still, brokers have certain historical markers on their side.

Ms. Cliff noted that the New York market is so insulated that even after Sept. 11, 2001, it came roaring back. "To wait on the sidelines and try to second-guess the market, I think, is always a very dangerous game," she said.

Ray Kiswani, a senior vice president at Bellmarc, explained that in the previous three years, buyers thought that deliberating about an apartment for a few months would cost them 5 to 10 percent in price increases. Therefore, they were willing to borrow from their parents or from their retirement fund to seal a deal. Now, they do not feel they have to act quickly to avoid a price penalty.

"Today, the market is stabilized, and it's very unlikely a major change will occur in the next few months," Mr. Kiswani wrote in an e-mail message. "Therefore, buyers — understandably — feel a couple of more months simply won't make a significant difference."

That attitude could potentially backfire, though, if you want to buy in some of the new luxury buildings where Wall Street bonus money has been spent in the last few weeks.

"The bonus season came around and it was a great year for a lot of people," said Tim Wright, a 26-year-old stockbroker who is living in a rental. He said he "fell in love" with a one-bedroom, one-and-a-half bath apartment that he bought at the Link, a 210-unit, 44-story condominium tower being built in Hell's Kitchen. It is expected to be completed by late 2006. Opening prices for one-bedrooms (about 600 to 1,000 square feet) are $650,000 to $1 million.

Mr. Wright did not fret about the state of the market because, as he said, "If I held off to time the market and the place sold out, I'd probably regret it."

He described the Link sales office as "mobbed" and the competition as "fierce."

"There is almost no negotiation," Mr. Wright said. "Say it's a million and you want to pay $850,000, they can say 'go for a walk' because they're going to sell to someone the next day for $1.2 million."

Dolly Lenz, vice chairwoman of new development marketing and investment sales for Prudential Douglas Elliman, said she has seen a "big bump" from bonuses in the last three weeks at the Cipriani Club Residences at 55 Wall Street. "A flurry just came as they got paid," she said. More than half of the units in contract at Cipriani are from Wall Street bonus money, she said, adding that at a recent open house, nearly 50 people showed up for tours.

At the Hudson, a 20-story condominium on the Upper West Side that is scheduled for occupancy this spring, about half of the 40 contracts that have been signed are with Wall Street bonus spenders, said Ramona Mahtani, the director of sales and marketing for the Developers Group, which, along with Halstead, handles the sales and marketing.

Richard Cantor, a principal at Cantor & Pecorella, a sales and marketing firm that is handling sales in 10 new buildings around Manhattan, said some buyers are surprised there is activity in the market. He said that those who viewed apartments and then waited weeks to make an offer have sometimes wondered, how could it be sold?

Thomas Elliott, vice president of marketing and design at El Ad Properties, the developer of several condo projects, including the Link; the O'Neill Building, at 655 Sixth Avenue, between 20th and 21st Streets; and the Grand Madison, at 225 Fifth Avenue, between 26th and 27th Streets, said the feeling at some sales offices is that "the party's not over yet."

Still, property is not being snapped up as it was a year ago. Ms. Smith of Warburg said sellers should be realistic. "Don't have supercrazy expectations," she said. "The consumer is just not putting up with it."

Mr. Lewis of Halstead, who said a property will sell if it is marketed and priced well, recently helped the owners of a two-bedroom, one-and-a-half bath co-op on the Upper West Side get the price they wanted (around $810,000) by putting their apartment on the market for $789,000. Some 47 people arrived at an open house and now a contract is signed for more than $800,000.

Mr. Lewis told the couple what he said he tells all of his clients: "You can choose to play pool where the ball used to be, or you can play pool where the ball is now."

 

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Remembrance of springs past Seasonal anticipation for a deal-making spring comes with question: how busy will it get? By Tom Acitelli, March 2006   Spring blossoms this month, and its arrival will,…... Read more >

Remembrance of springs past
Seasonal anticipation for a deal-making spring comes with question: how busy will it get?

By Tom Acitelli, March 2006
 
Spring blossoms this month, and its arrival will, as always, bring change to the Manhattan housing market.

"There'll be a lot more choices for buyers than anything they've seen in the last two or three years [this spring]," said Jeff Wolk, president of brokerage Fenwick Keats. "There'll be a little more tug of war between buyers and sellers."

Spring might be the most memorable season in the Manhattan market, a collection of months after traditional winter lulls, when deals start to happen again with greater frequency and the market's tone can be set for the entire year. This spring may be especially telling, following a winter that marked the end of the housing boom nationwide and in the city, and which comes on the heels of a record Wall Street bonus season in December and January. Past springs, then, especially those that followed a tough winter, could provide lessons for the coming one.

Data shows that from the first quarter (winter) to the second quarter (spring), sales in Manhattan generally pick up -- often significantly.

Only in three of the last 10 years have sales from the first to second quarter declined, according to appraisal firm Miller Samuel. In 1996, the number of closed sales deals dropped 18.6 percent; in 2001, it dropped 10.1 percent; and, in 2000, sales dipped nearly 2 percent. In the other seven years, sales shot up by double-digit percentages from the winter to the spring. In 1999 and 2002, sales jumped more than 30 percent, according to Miller Samuel; last year, they increased 12 percent.

Overall, over the last 10 years, on average, sales in Manhattan have increased 10.6 percent from the winter to the spring, and, over the last five years, 11 percent.

Much of this sales activity that shows up in springtime is actually fomented in the winter, as deals recorded as closed during the second quarter of the year are often hammered out the quarter before. That means this spring may owe much to the current winter.

"The first quarter is generally our busiest time," said Frederick Peters, a broker since 1980 and president of Warburg Realty Partnership. "When you're talking about springs being strong, you're talking about first quarters being strong."

The first month of the first quarter of 2006 saw median and average sales prices for Manhattan
apartments scratch the levels of the summer of 2005, increasing over both December as well as January of last year, according to a report from Halstead Property.

The average sales price in January was $1,277,568, an increase over the year-end 2005 price of about $1.1 million -- and the highest price since June, Halstead reported, when it was more than $1.3 million. The median sales price for a Manhattan apartment in January was $750,000, up from $699,000 at the end of 2005.

Although handicapping the market month-to-month can be difficult, the Halstead numbers jibe with the trend in rising Manhattan sales prices borne out by year-end reports that showed an uptick in average prices from the third to the fourth quarter of 2005, after sizable declines the quarter before.

Generally, all sizes of apartments in locations throughout Manhattan experienced year-over-year price increases in January, according to Halstead. Two-bedrooms on the East Side, for one, ended January with a median sales price of $1.5 million, 30 percent higher than the median in January 2005. Studios and one-bedrooms on the West Side each ended January with median sales prices 29 percent higher than January 2005, and Downtown studios had a median price of $410,750, Halstead reported, a 31 percent increase over last January.

The number of new listings throughout Manhattan was also up in January, according to Halstead, except for apartments with four bedrooms or more on the West Side and Downtown. Fresh listings for studios, one-, two-, and three-bedrooms increased in January over December.

Based on the winter activity so far and the precedent that sales usually pick up in Manhattan in the spring, should brokers be bracing for a flurry of deals in April, May, and June? Probably, market observers say -- but not on the scale of the most recent springs.

"You never thought the spring of '04 could top the spring of '03, and then it did," Wolk of Fenwick Keats said. "And you never thought '05 could top '04, and then it did. I think now, for the first time in two or three years, we won't be outdoing ourselves."

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Warburg moving Tribeca, Greenwich Village offices By Tom Acitelli Warburg Realty Partnership will be moving both of its lower Manhattan offices to new locations by spring. The firm's temporary Tribeca…... Read more >

Warburg moving Tribeca,
Greenwich Village offices

By Tom Acitelli

Warburg Realty Partnership will be moving both of its lower Manhattan offices to new locations by spring.

The firm's temporary Tribeca office on Vestry Street will find a permanent home in an approximately 2,000-square-foot, office at 100 Hudson Street this month. It will support 21 brokers.

Warburg's Greenwich Village office, now at 795 Broadway, will move to a 2,750-square-foot storefront office at 65 West 13th Street by the spring, where 31 brokers will be based.

"Each of them has a different raison d'étre," Warburg president Frederick Peters told The Real Deal. "The Tribeca office is just a response to the fact that we wanted to be in Tribeca, and we saw it as an opportunity. The Village office, our lease was coming up, so we thought either we're going to renew it or we were going to do something else. And we decided we actually wouldn't mind having a little more space."

No stranger to office expansion in Manhattan, Warburg has since late 2004 opened locations in Harlem and the Upper East Side as well as the temporary location in Tribeca, which opened in September.

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The Telltale Party By Anna Bahney December 25, 2005   MOST people don't like to think about their real estate broker throwing back drinks and gyrating on a dance floor to ''It's Raining Men.'' But…... Read more >

The Telltale Party

By Anna Bahney
December 25, 2005

 
MOST people don't like to think about their real estate broker throwing back drinks and gyrating on a dance floor to ''It's Raining Men.'' But like the holiday party, it happens once a year, ready or not.

For a buyer or seller looking to discover what a firm values, its demographic, its ''personality'' (let alone its quotient for fun), much can be gleaned from the annual holiday party. While the success of the soiree is no indication of whether these real estate professionals can close a deal, the parties do give an indication of how the company may treat clients based on how they treat one another -- and themselves.

Some are over the top, like the $100,000 party given by Prudential Douglas Elliman, at which more than 1,000 guests stormed the Four Seasons 10 days ago. Others were intimate affairs at a broker's home, a traditional dinner party at a private club or a laid-back hangout session at a downtown lounge not yet open to the public. Still others involved draining mozzarella and singing drag queens -- although not at the same time or place.

Bellmarc Realty

Bellmarc was the early entrant, kicking the season off on Nov. 29 with a by-the-book holiday party at a TriBeCa party space, complete with holly-themed name tags.

A buffet dinner featured four kinds of pasta, baked chicken, filleted fish, carved roast beef or turkey. Dancing followed, heavy on Motown and ebullient wedding favorites like Kool and the Gang's ''Celebration'' and Aretha Franklin's ''Respect.''

This was a festive affair, not too showy, not too stingy.

And not surprising, because Bellmarc is a ''just right'' kind of company. With about 220 agents, it is squarely in the middle of the 10 largest companies. The agents tend to be older, ranging from about 30 to 70, many on their second or third career.

Most of the agents have accents that leave no doubt they grew up in New Jersey, Long Island, Manhattan or Queens -- like the owners of the firm, Neil Binder and Marc Broxmeyer.

People whispered that the party was held so early in the season because it was cheaper to rent the space.

But by the looks of the dance floor at TriBeCa Rooftop, awash in bodies swaying, shaking and twisting, no one thought it was a bad deal.

Gumley Haft Kleier

On Dec. 7, Michele Kleier, who co-owns and co-manages the boutique firm Gumley Haft Kleier with her husband, Ian, was host to a cocktail party for 40 people at the nine-room Park Avenue prewar apartment where they have lived for the last 25 years.

A beaming Mrs. Kleier greeted guests in the foyer flanked by her two smiling daughters -- and vice presidents at the firm -- Sabrina Kleier Morgenstern and Samantha Kleier Forbes. Each of the three held one of the family's Maltese dogs -- Lola, Roxy and Dolly -- bedecked in red and green collars.

There was a lot of cheek kissing and puppy nuzzling.

It felt more like a book party than a holiday event (and not just because the three Kleier women are writing a book about being a family-run David against the consolidated Goliath firms). The parlor and living room were filled with chic-looking middle-aged agents and their spouses. There were some younger brokers looking like Junior Leaguers and some real estate reporters happily munching food.

Partygoers sipped wine and ate chocolate-dipped clementines and cheesy jalapenos on tiny biscuits as Billy Joel and Frankie Valli played on the sound system.

Just as one would expect at a party held amid Kleier photographs, family and friendships are central to the company. They are the company. Ms. Kleier has been in real estate for 27 years, and in addition to having her daughters close, many of the brokers are old friends.

Brown Harris Stevens and Halstead

Brown Harris Stevens's annual party was held on Dec. 7 at Au Bar, a velvet-roped celebrity magnet in Midtown off Park Avenue, which reflected the company's idiosyncratic mix of the traditional and the trendy.

While there are agents at Brown Harris Stevens who have developed long relationships with prominent New York families, there are also young brokers who handle newer clients. Everyone's clients share one trait: wealth.

In a parlorlike party space, where several courses of food were served, including sushi, pastas, salmon and desserts, the younger agents gravitated to a dance floor with music ranging from rock to rap.

Expressly for the firm, and not for spouses or guests, the party was also attended by some principals of the parent company, Terra Holdings, including members of the Zeckendorf family.

Halstead, also owned by Terra, had a very similar party, held at the same place on a different night. Just a little bit later, for a crowd just a little bit younger.

Warburg Realty

Each Warburg agent donned a red apron on arrival at the Tuscan Square restaurant in Rockefeller Center on Dec. 12. They were assigned a culinary station -- fish, meatballs, mozzarella, tiramisu -- and worked with one of 10 chefs to learn how to prepare the dish for the dinner.

The party was in keeping with the creative and academic background of Warburg. Its president, Frederick Peters, has a master's degree in music from Queens College and went to Yale as an undergraduate. He likes to keep the firm ahead of similar-sized ones, and Warburg was the first to open a luxury property office in Harlem.

Jane Bayard, a vice president there who was charged with creating the party, said that she tries to come up with a new idea each year for the company's 150 agents.

''We're not a mega-giant, so we can have a warmer atmosphere,'' Ms. Bayard said. The best part, she said, was that ''we weren't talking real estate all night.''

Citi Habitats

The soiree for about 1,000 was held at the enormous and ornate Cipriani Wall Street. With a supper club theme, it felt more like a senior prom than an office holiday party.

The decoration committee did some impressive work with the palm-tree table-toppers with feathers for fronds and a silken trunk lit from within. There were hors d'oeuvres and a buffet dinner of sushi, shrimp, pasta, salad and grilled beef.

Gaggles of young women wore strapless, backless or deeply plunging formal dresses in all manner of black, red and sequin. The men, who also came in packs, were no slouches either, wearing velvet pinstriped blazers and black suits.

Professional swing dancers performed to ''Boogie Woogie Bugle Boy,'' inspiring some flirty shimmying by agents on the dance floor, before the band retreated to dance fare with a cover of Madonna's ''Holiday.''

A projection screen above the stage flashed pictures of those overachievers who made the real estate equivalent of the honor roll, earning the ''Top Sales Agent'' and ''Top Rental Agent'' titles. There were pictures of the company's extracurricular activities like team sports and service projects. It was shown without the accompanying misty-eyed Alphaville version of ''Forever Young'' playing in the background. Which is unfortunate because Citi Habitats is forever young, made up of a seemingly endless supply of new agents, and the turnover is high.

Agents tend to be in their late 20's or early 30's, which speaks to attracting the young people that are the firm's bread and butter. For many people arriving in New York fresh from college, Citi Habitats is their introduction to Manhattan real estate.

Stribling & Associates

Elizabeth Stribling loves throwing a party, and like the firm that bears her name she does so with a strong sense of tradition.

It is held each year at the same Upper East Side private club. There are cocktails and a buffet dinner. For the last five years, the event has been decorated by Renny Reynolds, a Park Avenue-based designer who has created spectacular spaces through flowers from Studio 54 to the White House.

This year the party took a Caribbean island theme, with oodles of orchids, parasols, pretend iguanas and lanterns with printed birds. Sheer fabric was hung across the room, giving it what Mrs. Stribling called a ''warm magic carpet feel.''

''It demonstrates her personal style,'' said Kirk Henckels, the director of Stribling Private Brokerage. ''I would never use the word 'classy'; I would say classic.''

Mrs. Stribling personally greeted the agents and staff members who arrived with their significant others. Some of the firm's 200 agents come from prominent Upper East Side families with educations from schools like Chapin and colleges like Smith and Vassar, while others are from Dubai, United Arab Emirates; Paris; London; and South Africa.

''People said I looked like a snowflake,'' Mrs. Stribling said, describing her glittering white gown with lace and silver sequins that was made for her by Pilar Rossi.

Dwelling Quest

The Dwelling Quest identity -- a hip, independent, boutique firm -- could be read in the party's invitation, which was a slick e-vite with stylized pictures of candy canes and a red drink in a martini glass. The firm has 80 agents spread out over three locations, in Midtown, Harlem and Brooklyn, but the sensibility of the firm, as well as the location of the party, is very downtown.

It partied in a new cafe in west SoHo called Giorgione 508 (owned by Giorgio DeLuca, co-founder of Dean & DeLuca), which would not be open to the public until a week after the party. The vibe was low-key hangout, with the men in dressy open-collared shirts and the women in clingy knitwear as music by the Killers, the White Stripes and Moby played.

Since the company is growing -- both the Brooklyn and Harlem offices opened this year -- Daren W. Hornig, its chief executive, said planning a party is a delicate balance.

''If you do too much,'' Mr. Hornig said, ''people say, 'Why did you spend so much money on one night when you could have put it back into infrastructure?' If you do too little, people say, 'You don't appreciate us?' ''

JC DeNiro & Associates

From the mountain of coats piling up in front of the quickly fogging windows, to the scented candles set on filing cabinets and the wrought-iron decorative pieces bedecked with garlands and tinsel, this party had the welcoming effects of coming into someone's home.

But it was held in the JC DeNiro & Associates' office at Ninth Avenue and 21st Street in a storefront designed by Christopher Mathieson, the managing partner of the company, with the attention many give to their own homes.

Without the budget for a big flashy party, this firm used its people and its creativity to pull together an elaborate and attractive party.

The catering crew handily balanced convection ovens on top of desks and put glass Pyrex pans on top of printers, setting up their kitchen in a raised and open office space in the back. Another open office became a stage where a D.J. set up his gear, playing high energy club music and tracks from the new Madonna album. Throughout the evening two drag performers, Sherry Vine and Hedda Lettuce, tag-teamed the stage for stand up and singing.

The agents, who seemed to be friends as much as colleagues, mingled amid the festive wrapping-paper detritus of a secret-Santa celebration. They were invited to bring whomever they wanted -- friends, boyfriends, girlfriends, spouses, parents -- and each category was represented.

Prudential Douglas Elliman

By 9:30 p.m., the doorman at the 52nd Street entrance to the Four Seasons had abandoned his duties to Julian Niccolini, an owner of the restaurant. Mr. Niccolini announced to the two dozen unhappy guests jammed into the vestibule with their fur coats that it would be a half hour wait.

For those fortunate or patient enough to get inside, the party was on corporate holiday overdrive. Hundreds of men in charcoal suits lifted glasses and screamed over the music at hundreds of women in formal gowns, cocktail dresses and pantsuits. Suits slid past, the guests with plates of lobster and curry in one hand, a cellphone in the other, trying to make their way through the sprawling venue.

Everything about the party said big -- the venue, the band, the buffet; the personalities, the crowd, the noise. And that was fitting, because the company is among the top in the city in terms of numbers of agents.

In Manhattan, the ''big 10'' firms are more like a fuzzy 11 or 12, with the companies changing rankings depending on the measurement, and who is measuring.

Typically, firms floating around the top include Prudential Douglas Elliman, the Corcoran Group, Halstead Properties, Brown Harris Stevens, Coldwell Banker Hunt Kennedy, Bellmarc Realty, Stribling & Associates, Warburg Realty, Fenwick-Keats, Citi Habitats, Sotheby's International Realty and Manhattan Apartments.

A study done by the trade publication the Real Deal last April showed how they ranked in various categories. At that time it was Corcoran for the highest dollar sum in total listings ($2.79 billion), Sotheby's for highest median price per listing ($5.09 million) and Fenwick-Keats with the highest percentage of brokers without listings (63.1 percent). Douglas Elliman had the highest number of listings and the most brokers.

Last year, Gloria Gaynor performed at the Douglas Elliman party. This year the hired band performed Ms. Gaynor's signature song, ''I Will Survive.'' But the dance floor hit its peak during a cover of Bon Jovi's ''Living on a Prayer.'' Perhaps a telling shift in the market place?

Coldwell Banker Hunt Kennedy, the Corcoran Group, Manhattan Apartments

These three firms are having their holiday party in January, a trend started by Corcoran a decade ago because the holidays are too heavy with competition for people's attention. Coldwell Banker Hunt Kennedy will have a different kind of party this year, a black-tie event with dinner and dancing at the Doubles Club at the Sherry-Netherland Hotel.

Manhattan Apartments, which seems to be trying to keep up with everyone else, doesn't know what kind of party it is going to have, but it will have one, it promised, on Jan. 11.

Corcoran will take over Cipriani Wall Street on Jan. 10 with a ''God and Goddess'' party. The party, which will include models in period costume, also reflects the company's inherent competitive spirit.

''Every year they try to outdo themselves,'' said Lara Berdine, vice president of public relations. ''The agents have pretty high expectations.''

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REBNY toasts brightest and best at annual “Oscars” Dubbed the industry Oscars, this year’s Real Estate Board of New York Residential Deal of the Year awards had all the ingredients of the annual…... Read more >

REBNY toasts brightest and best
at annual “Oscars”

Dubbed the industry Oscars, this year’s Real Estate Board of New York Residential Deal of the Year awards had all the ingredients of the annual Hollywood spectacular – and some.

The ladies dressed in their finest Dior and the men donned tuxedos to pay tribute to the most promising, most accomplished and most respected in the business at a gala event held in the Puck Building ballroom, where all talk was of the high drama surrounding the 2005 Deal of the Year.

Halstead Property broker Sandra Lauer found herself embroiled in a saga straight from a big screen blockbuster involving an FBI sting, money laundering and tabloid headlines. Over the course of 13 months, she worked diligently to sell a two bedroom Manhattan co-op, for which the client misrepresented the true ownership. Despite this and several other serious setbacks, Lauer ultimately managed to consummate the deal.

She explained, “the deal involved a client selling a two bedroom co-op which he transformed into a one bedroom without Board approval.

“There was misrepresentation by the seller as to the true ownership of the property, which resulted in demand that that the seller pay a five-figure donation to a charity to clear up the stock certificate ownership issues. The deal ended up involving a much publicized FBI sting for money laundering and my concern was that my conversations had been taped by the FBI and that I, an innocent broker, was being drawn into a series of federal investigations.”

Despite two failed bids on the property, Lauer’s professionalism, expertise and perseverance ultimately enabled her to close the deal for which REBNY recognized her this year.

“You have to persevere and know that you are doing things the right way, no matter what everyone else is doing,” said Lauer after the ceremony.

“The most important thing to me has always been my reputation to do everything with integrity. That’s the way I conducted myself in this transaction and I think that’s why I was able to close.”

Despite the drama of the past year, Lauer admitted her moment in the spotlight made it all worthwhile.

“The event itself really was like the Oscars and winning the REBNY award is an extremely big honor. I know how many transactions occur in a year and to receive this kind of recognition truly humbles someone.”

Two of Lauer’s co-workers also stepped up to the podium that night to receive awards.

Halstead’s senior vice president Christine O’Neal took home the second place award with Barbara Schwartz, of The Corcoran Group. The two co-brokered a deal that involved a labyrinthine series of events that ultimately led to a successfully brokered transaction.

And Halstead’s Pasquae Strippoli won for Rental Deal of the Year for the successful negotiation of a deal that was actually two deals for the same apartment and involved a high ranking UN diplomat.

“The fact that Halstead made such a strong showing at REBNY’s Deal of the Year demonstrates our agents’ command of the real estate market in New York City,” stated Halstead president Diane Ramirez.

The third prize sales award went to Shel Joblin and CB White of Stribling & Associates, and Carrie Chiang and Mark Baum of The Corcoran Group.

Edward F Johnson of Brown Harris Stevens Residential LLC, received the Most Promising Rookie Salesperson of the Year Award and Jane Bayard, of Warburg Realty Partnership was presented with the Henry Forster Award.

Bayard joins an illustrious group of real estate’s finest who have previously earned what is regarded as a lifetime achievement award, including Elizabeth Stribling, president of Stribling & Associates, Hall Wilkie, president of Brown Harris Stevens, and her colleague, Frederick Peters, president of Warburg.

“What’s nice about receiving this award is the respect it gains for the firm. Fred Peters won the award about 10 years ago, so I feel good about winning it for both myself and for the firm,” said Bayard, whose life is steeped in the real estate traditions of Manhattan.

Her father, Harold Uris, the well known builder, was enormously generous in an effort to improve the quality of life for the city he felt gave him so much.

Bayard herself has been active in residential sales since 1976, and has sold in almost every major co-op on the Upper East Side.

In 1991, she assumed her current position as partner and executive vice president at Warburg Realty Partnership and she continues her family tradition in real estate, as well as serving the city in the charitable fashion her family embraced.

Reflecting on her long and productive career, Bayard commented, “I think it’s a very competitive industry and there are a lot of brokers who feel its an easy way to make money, but they don’t do their jobs properly and they clutter the industry. The good ones are very good, though, and it’s a pleasure to do business with them.”

In recent years, Bayard has allowed her sales career to take a back seat to her involvement with the management of Warburg, which has grown from two to five offices in the past year.

“We are hiring new brokers and working with more developers. It’s very exciting to be involved with a company that is growing. And I have to say, it is exciting to rub shoulders with people who are so well respected in the industry.”

Paying tribute to the 2005 award winners, Steven Spinola, president of the Real Estate Board of New York, said, “With the continued strong activity in the residential market, the selection of these awards becomes increasingly difficult each year.

“But that is to the credit of this year’s recipients, who have stood apart as New York’s top performing brokers. Each of the winners deserves recognition for their hard work, ingenuity and creativity.”

Spinola called Bayard “a true professional and role model to others in the industry.”

“She built a career from the ground up, rising from a salesperson to broker and then climbing the management ladder to become Executive Vice President of Warburg Realty.

“Jane has always been involved with REBNY, serving in many capacities for the last 15 years from the Education Committee to the Ethics Committee and beyond.  She has a great reputation among brokers and is well known for her integrity and creativity. She is an ideal recipient for this award.”

The proceeds raised at the gala will be donated to the American Cancer Society Hope Lodge New York City, Project Find-Find for the Aged and the REBNY Foundation Katrina Relief Fund.

Proceeds also will benefit REBNY’s Member In Need Fund, which was created in 1997 and has already helped nine member brokers overcome financial difficulties since its inception.

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For Choicest Apartments, Many More Choices WHEN developers opened new buildings for sale in New York a year ago, brokers jostled for appointments, buyers camped out before open houses and people made…... Read more >

For Choicest Apartments, Many More Choices

WHEN developers opened new buildings for sale in New York a year ago, brokers jostled for appointments, buyers camped out before open houses and people made decisions to part with thousands of dollars in a matter of minutes. One sales agent famously sold five luxury condos from the back seat of her BMW in a day.

The frenzy has died down, but the buildings keep going up.

With close to 16,000 units being built in Manhattan alone this year and next, and another 23,700 planned, according to Yale Robbins, a real estate publishing company in New York, there is much to choose from, especially at the high end, where a disproportionate amount of building is going on.

The plentiful options mean that buyers can now return to a sales office repeatedly to examine floor plans before writing a deposit check. Where some buildings might have sold three or four apartments in a day, now developers are happy to sell that many in a month. And some buyers even feel bold enough to offer less than the asking price, though few developers are biting.

"I just feel like people are waiting to pull the trigger," said Ariana Meyerson, project manager at 225 Fifth Avenue, a 192-unit building with $1 million one-bedroom apartments. "They are waiting to see where the market goes."

Some brokers predict that sales will slow more as newer apartments, often with fancier amenities than the building down the street, come on the market. "I do think that there is going to be product sitting on the market a year from now," said Michael Shvo, a broker who markets new developments.

Citywide, developers applied for building permits representing 15,870 new units in the first six months of this year, census figures show. Last year they applied for 25,208 units, the most since 1971. A large proportion of the newest units are being marketed as "luxury" apartments, a term that has come to mean anything from $600,000 studios in Brooklyn to $40 million penthouses on Central Park West.

The bounty of choice includes the planned condominiums at the Plaza Hotel and in the Stanhope Hotel on Fifth Avenue near the Metropolitan Museum; chic new apartments designed by the French architect Jean Nouvel at 40 Mercer Street in SoHo; and the Philip Johnson-designed units at the Urban Glass House on Spring Street nearby.

"We do have a healthy amount of developments coming on stream," said Kirk Henckels, director of Stribling Private Brokerage in Manhattan. "And if there is one question mark" looming about the state of the market, he said, "that may be it."

Although condo prices are still increasing, brokers said buyers are being shrewder about what they are willing to pay. Six months ago the luxury market was so heated that "you could basically put a 3,000-square-foot coal chute on the market and three people would try to buy it," said Frederick W. Peters, president of Warburg Realty. Now, he said, buyers were being more selective about location and quality.

Stacey Silverman, 41, has been looking for a two-bedroom apartment in a new development for the past six months. She has yet to put down a deposit. "I think there is a lot to choose from, and there is more coming on the market," she said. "So I'm taking my time."

Some developers have not caught on to this new reality. "Sellers are in denial that the market has shifted," said Jonathan Miller, a New York appraiser. "On projects that appear to have stalled, the developer kept ratcheting up the prices systematically - which was the norm for the past few years - until it was priced out of the market."

Some new developments are still selling briskly, even at the superluxury end of the market. The developers of the condominiums at 15 Central Park West have had no trouble selling 74 units worth $650 million in the two months since the sales office opened.

William Zeckendorf, a partner in the development, said 12 of 16 penthouses, including one at $45 million, were under contract. A prominent Wall Street investor lost out on a duplex penthouse when he tried to buy at a discount and another buyer offered full price, Mr. Zeckendorf added.

But brokers said the scramble at 15 Central Park West, designed by Robert A. M. Stern in the spirit of such grand buildings as the San Remo and the Dakota, was largely a reflection of its irresistible location, lavish amenities and old-world charm.

Alex and Luba Rabey were not even looking to move from their apartment at the Grand Millennium on Broadway when they heard about 15 Central Park West. Mr. Rabey, a 65-year-old consultant, said they were attracted to the building's particular vantage on the park, its gym facilities and its 11-foot ceilings. They have signed a contract to buy a $4.87 million three-bedroom apartment.

Name architects have not necessarily spurred sales at either the Richard Meier tower at 165 Charles Street or Charles Gwathmey's undulating glass building at Astor Place. They are both in downtown locations that some brokers said wealthy buyers do not prefer.

The tower at 165 Charles Street, the third to be designed by Mr. Meier overlooking the West Side Highway, has been on the market for over 18 months. Out of 31 units, 24 have sold, including a $20 million penthouse. One broker who asked not to be named because she did not want to criticize a building where she might bring clients said it should have sold out by now. Izak Senbahar, the developer, said, "It's a very specialty product that sells at its own speed."

Despite extensive media coverage and a model apartment sponsored by Esquire magazine, the Related Companies, developer of the Gwathmey building, has sold only 24 of 39 units there. David J. Wine, vice chairman of Related, said he was perfectly happy with those numbers, given what buyers were paying: $1,400 to $2,600 a square foot.

But, he acknowledged, "buyers, at those numbers, because they have more choices, are being more cautious about where they buy."

Even at less lofty levels, buyers are hesitating. "It's taking longer to sell out buildings," said Richard Cantor, a principal at Cantor & Pecorella, a marketing firm that is handling 1,500 units in 10 new buildings around Manhattan.

It has taken 10 months to sell 43 of the 79 units at Beacon Tower, a high-rise condominium in the Dumbo neighborhood of Brooklyn, despite the lure of a Zen garden, a gym and high-end kitchens. Steve Rutter, who handles marketing of new developments for Corcoran Group in Brooklyn, said the developer, Leviev Boymelgreen, closed down the sales office for part of the summer because sales were sluggish, and reopened after Labor Day. Only four apartments have sold since then.

So far, nobody is predicting a glut or that prices will collapse. That is partly because today's building boom pales in comparison to the one that took place in the 1980's (developers built 125,623 units in Manhattan from 1985 to 1991, Mr. Miller, the appraiser, said). That building spree exacerbated the effects of the stock market crash and a severe recession, and median prices fell as much as 45 percent.

Since 1999 builders have put up only 13,374 units, about a tenth of what was built in the 1980's.

This time around, Mr. Miller pointed out, developers have focused on the upper third of the market, making it vulnerable to the impulses of one group of buyers.

For the moment, many remain in the game. Ali Akansu, a professor at the New Jersey Institute of Technology, recently bought an $815,000 one-bedroom apartment in Bryant Park Tower, a 94-unit condominium that will sit atop a hotel. He said he figured that it would be a good investment, and that maybe his college-age daughter would move in at some point. But when he was looking, he said, he saw several other projects that he deemed overpriced.

 

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‘MANHATTAN’S PREMIER BROKERS’ Manhattan is known for its real estate deals with jaw-dropping price tags, like Doris Duke’s 20,000 square-foot mansion (the last private mansion left on Fifth Avenue)…... Read more >

‘MANHATTAN’S PREMIER BROKERS’

Manhattan is known for its real estate deals with jaw-dropping price tags, like Doris Duke’s 20,000 square-foot mansion (the last private mansion left on Fifth Avenue) on the market for $50 million, the $70 million penthouse at the Pierre, three swank townhouses on Sutton Square for $42 million, the new terraced duplex penthouses at 15 Central Park West – and count on these elite residences being brokered by some of Manhattan’s superstar brokers.  With some 28,000 licensed brokers and agents selling real estate around town, these prestigious few remain at the pinnacle of their field year after year.  They are highly regarded, tremendously sought after, and always award-winning.

Who They Are

Manhattan’s top five power brokers are Prudential Douglas Elliman’s Dolly Lenz, Corcoran’s Robert Browne, Carrie Chiang, and Sharon Baum; and Brown Harris Stevens’ Kathy Sloane.

Managing Director Dolly Lenz is Prudential Douglas Elliman’s number-one broker nationwide (she garnered more commissions in 2004 than any of their 58,000-plus brokers and agents across the country).  Lenz has sold more than $4 billion worth of property in her 20-year career, at the rate of $400 to $450 million a year.

Sharon Baum, a senior vice president and director of the Exclusive Properties Division at Corcoran, has repeatedly reigned as their number one since joining the company in 1991.  A longtime specialist in luxury living, she’s brokered upward of a billion dollars of Manhattan’s most exclusive townhouses and residential buildings.

Carrie Chiang, also a senior vice president at Corcoran and director of the International Division, is sought after for her impeccable reputation.  She has consistently brokered deals to the tune of $100 million a year since signing on with them in 1990, making her a Corcoran number-one broker many times over.

Senior Vice President Robert Browne was honored as the number-one broker for Corcoran in 2004; he is known for closing some of the largest deals in Manhattan’s history.  Like Chiang and Baum, he is a perennial member of Corcoran’s $100 Million Circle, surpassing that number time after time.

Brown Harris Stevens’ Kathy Sloane was named Broker of the Year in 2004 as well as the top-producing broker, breaking all previous records.  With the firm since 1986, this senior vice president and managing director has brokered more than a billion dollars in real estate.

 

The Boutique Firms

Some premier boutique firms are Gumley Haft Kleier, Fox Residential Group, R.P. Miller & Associates, Inc. and Leslie J. Garfield & Co.

During the last 25 years Michele Kleier, President and Chairman of Gumley Haft Kleier has brokered more than a billion dollars of real estate.  She oversees more than 40 brokers, including her husband Ian Kleier, who is co-president of the firm, as well as her two daughters Sabrina and Samantha.  Kleier’s client roster includes Barbra Streisand and Katie Couric.

Barbara Fox founded her company, Fox Residential Group, in 1989.  Sixteen years later, with 40 brokers onboard and a client list that includes Robert Redford, Fox brokered more than $350 million in properties in 2004.  Despite the growth, Fox maintains a hands-on approach.

Reba Miller has been in real estate for more than two decades.  Establishing her firm, R.P. Miller & Associates, Inc. in 1998, Miller herself has brokered real estate in excess of $500 million for an impressive client list that spans the globe.

Leslie J. Garfield of Leslie J. Garfield & Co., Inc. specializes in townhouses.  An industry leader since the mid 1970s, last year, gross sales were more than $100 million.  Recent transactions include the Vanderbilt Fabbri mansion, both Jasper Johns homes, and the Richard Avedon residence.

Marketing the Newest Developments

When it comes to the latest and hottest new developments, top marketers include Louise Sunshine, Adrienne Albert, Richard Cantor, Dana Pecorella, Michael Shvo and Laura Cordovano.

Louise Sunshine, long associated with developments designed by world-famous architects, established the Sunshine Group in 1986.  Well-regarded in markets throughout the country, she was an executive vice president and partner at the Trump Organization before opening her company.  Current projects include 170 East End Avenue, 165 Charles Street, 205 East 59th Street, and 50 Gramercy Park North.

Adrienne Albert founded The Marketing Directors Inc. in 1980.  With its impeccable reputation well beyond the streets of New York, her company is a major player in development projects in cities including Los Angeles, New Orleans, Washington D.C., Boston, Philadelphia, and Houston, garnering sales in excess of $14 billion.  Current projects include 455 Central Park West, 200 Chambers Street, Sutton 57, Park Avenue Place and 1600 Broadway.

Richard Cantor and Dana Pecorella of Cantor & Pecorella, Inc. are marketing consultants and exclusive agents to some of Manhattan’s premier residential developers.  Cantor & Pecorella, Inc. and its predecessor Richard Cantor, Inc., has negotiated more than $1 billion in gross sales of co-ops and condos, and the rental of over 3,000 luxury apartments and lofts.  Current projects include 555 West 23rd Street, 1 York Street, Rutherford Place at 305 Second Avenue, 225 Fifth Avenue, and 325 Fifth Avenue.  They are also the marketing consultants for The Plaza.

After five record-breaking years brokering high-end, high-profile transactions at Prudential Douglas Elliman ($300 million in 2003 alone), Michal Shvo created SHVO Marketing in 2004.  Current projects are luxury towers like Bryant Park Tower, Fultonhaus, 20 Pine Street, and 16 West 19th Street.

Representing more than $1 billion in sales, Laura Cordovano has played a significant role in marketing and sales.  She first joined the Trump Organization in 1982, working with Donald Trump on Trump Tower and Trump Plaza.  She then went on to work for other Manhattan developers such as Peter De Savary (St. James’s Tower), Donald Zucker (30 East 85th Street), and Zeckendorf Realty (515 Park Avenue).  In 2003, Laura returned to the Trump Organization as director of sales for Trump Park Avenue.

What It Takes

So what does it take to be a member of this club aside from a highly competitive spirit? Is there a commonality among the best and brightest when it comes to character, personality, and work ethic?  Prudential Douglas Elliman’s CEO and president, Dottie Herman, says it takes determination, attentiveness, loyalty, long hours, and hard work.  “Real estate is a difficult business, and to be at the top, one has to be on call 24/7 and really understand the market and the inventory.  A good property doesn’t last, so to be able to know what’s available makes a broker stand out in a crowd.”  Barbara Corcoran, the founder of the Corcoran Group, who is famous for her tell-it-like-it-is attitude, said the classic sign for her of a top broker is the fear in their eyes.  “After finishing up their most successful year, they’re scared that they will never reach such success again and that their career is all but over.”

William Lie Zeckendorf, an owner and co-chairman of Terra Holdings, New York City’s largest residential firm and parent company of Brown Harris Stevens and Halstead Property, LLC, said power brokers love what they do.  “They are bright.  They relate well to their clients as well as their peers.  They are instinctive when it comes to matching a buyer with the right apartment.  They can also work quickly through rejection in order to move on to the next deal.”  Coldwell Banker Hunt Kennedy’s CEO David M. Michonski says he can spot a power broker among the newcomers within minutes of a first introduction.  “For me, it’s a combination of extreme likeability, clarity of expression, and an astute business sense.”  Elizabeth Stribling, CEO of Stribling & Associates, agrees with that, but adds that a top broker never gives up.  “They also have to be extremely organized and focused.  Be a real professional with up-to-the-minute market analysis and a cutting-edge ability to negotiate.  They also have to have the determination to conclude each deal, no matter what obstacles present themselves.”

Frederick W. Peters, president of Warburg Realty, summed it up: “In short, these power brokers are consummate professionals.  They’re knowledgeable, confident, extremely smart, dedicated, and hardworking.  They’re in the office by 8 a.m., often earlier, and they’re still on the phone or showing well into the evening.  They’ve devoted years to learning the ropes, so pricing, negotiation, and board preparation is second nature.  They do the research, know the economy and how it will affect the real estate market.”

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Warburg’s Crowning Glory   Warburg Realty Harlem, a division of Warburg Realty Partnership, has been appointed the exclusive sales agent for The Crown Condominium, located at 110th Street and Second…... Read more >

Warburg’s Crowning Glory
 

Warburg Realty Harlem, a division of Warburg Realty Partnership, has been appointed the exclusive sales agent for The Crown Condominium, located at 110th Street and Second Avenue in East Harlem.

The newly constructed nine-story luxury development will offer 30 residential condominiums and three retail stores to be marketed by Brian Thornton and Chris Halliburton. Frederick W. Peters, President of Warburg Realty, made the announcement.

Commented Peters, “The Crown Condominium offers the high-quality living buyers are coming to demand and expect. We are thrilled this developer and others have turned to Warburg’s luxury service, experience and professionalism to market these new properties.”

The Crown Condominiums will provide a combination of one- and two-bedroom luxury homes. Prices range from $249,000-$720,000 with the units available for occupancy in Fall 2005.

This is an exciting time for Warburg, with the planned opening of its newest storefront office in TriBeCa, as well as the overwhelming success of its Harlem and Real Property offices.

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There’s a glut of duplex apartments all over town. Some can be found in pre-war greats such as the Century on Central Park West and Gainsborough Studios on Central Park South.  Others- albeit the…... Read more >

There’s a glut of duplex apartments all over town. Some can be found in pre-war greats such as the Century on Central Park West and Gainsborough Studios on Central Park South.  Others- albeit the pricier ones- are in duplex-only buildings along Manhattan’s toniest avenues, while others may be offered up as “townhomes.”  And while duplexes may offer a dramatic and unique alternative to simplex dwellings, it’s important to remember they don’t automatically translate into roomier digs, or even sunshine-all-day penthouses.

Truth be told, they can be smaller than the more common one-level apartments.  “Townhouse and duplex residences give the illusion of more space and the feeling of living in a traditional home,” says Stribling’s vice president Linda Melnick.  But fair warning: one floor can very well be below street level. Interestingly enough, less space and windowless living rarely deters eager duplex buyers.

From to-the-max luxury living at Trump Park Avenue (a duplex can set you back some $30 million), buyers will find a myriad of choices, with the lower-floor dwellings fetching less dollars than their penthouse cousins.  On the other hand, no matter the location, features might include private entrances, private elevators, double-height ceilings, and personal outdoor space.

So what exactly is the allure? Warburg Realty president Fred W. Peters suggests, “Duplex living confounds the cookie-cutter expectations of the apartment dweller.  It is both glamorous and mysterious to enter an apartment foyer and see not just walls and windows but stairs.  Not only is it more like a house, but it also makes the totality of the space unknowable at first glance.  Both architecturally and emotionally, a duplex is always exciting.”

Here are some of our favorites:

Designed by Costas Kondylis, The Link at 52nd Street near Ninth Avenue is a well-appointed paradise. “We’ve tried to capture the fun and excitement of living in one of the city’s hottest neighborhoods by creating a building predicated on cutting-edge design and attention to detail,” stated Elad president and CEO Miki Naftali.  Starting at $2.9 million, the three-bedroom townhouses have huge terraces and unparalleled views of the Hudson River.  Loaded with plenty of extras, the building offers a lobby-level garden, fitness center and lovely 2,500 square feet interior garden. 

Consider one of the Adam Kushner-designed multi-level homes at Baxter and Canal Streets. Bells and whistles here include chromotherapy bathtubs, kitchens clad in steam ovens (read: healthy cooking), computerized refrigerator ovens that move cooled food to oven cooking, Internet refrigerators, and the coolest robotic garage.  “Kushner takes 21st-century design to a new level,” says Elliman’s managing director of new home developments Andy Gerringer.  “These homes will appeal to hip, young, computer-savvy professionals who relish time-saving, tech-friendly services.”  Price: about $3.24 million. 

The stylistic penthouse duplex at 79 Barrow near Hudson Street is so extraordinary that it’s been featured in Architectural Digest and on Fox News.  A labor of love also from Kushner, this two-bedroom masterpiece serves as the Kushner family home.  For $2.95 million, the lucky buyer will get 1,400-plus square feet of living space and terrace and roof access.  Notable features include log-cabin walls, exposed brick, a steel stairway, and an in-floor Jacuzzi.  The custom-designed kitchen has under-counter fridges and freezers, custom-cut drawers, and top-of-line appliances. 

The Lumiere on West 53rd Street near Ninth Avenue has 10 duplex townhouses and 6 duplex penthouses.  The penthouses have enormous terraces (as much as 1,300 square feet) with hot tubs.  (The townhouses offer the option of installing a hot tub on the terrace.)  Starting at $1.25 million, all have private entrances and none offer less than 1,144 square feet of indoor living space.  Topping the building amenity list is a Fresh Direct delivery-type refrigerated room at lobby level, a tree-lined garden, and a well-equipped fitness center. 

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The Industry Leaders:  Frederick Warburg Peters Frederick Warburg Peters is President of Warburg Realty Partnership, one of the oldest and most respected luxury residential brokerage firms in Manhattan.…... Read more >

The Industry Leaders: 
Frederick Warburg Peters
Frederick Warburg Peters is President of Warburg Realty Partnership, one of the oldest and most respected luxury residential brokerage firms in Manhattan. A graduate of Yale College with a Masters and extensive pre-doctoral work in music, Frederick entered the real estate business as a residential agent in 1980. After working as a Manager at Albert B. Ashforth for a numbers of years in the late 80’s he acquired and renamed the 95-year old firm in 1991.

During the past 15 years, Peters has expanded the company from 60 to 130 brokers and from one to four locations. In addition to leading the firm’s strategic initiatives he continues to work as a broker for two reason: he loves the thrill of making a deal, and feels it keeps his finger on the pulse of the marketplace, making him a more valuable resource to the firm’s agents. It is this daily involvement that enables Peters to insure that Warburg’s core philosophy providing extraordinary service and forging strong relationships between its professionals and the customers, clients and communities they serve is consistently fulfilled, and that the firm’s position as an independently owner major player in the New York City marketplace is maintained. Always attempting to think one step ahead, he has recently opened the first major luxury brokerage office in Harlem at Frederick Douglass Boulevard and the first office devoted to the sale of Real Property at 30 East 76th Street, in addition to Warburg’s existing Upper East Side and Greenwich Village locations. This trailblazer approach has consistently set the firm apart from its competitors and warranted Peters’ reputation as one of the most-quoted experts in the Manhattan residential real estate industry.

Peters’ dedication to the industry is also seen in his involvement as a Co-chair of the Board of Directors of The Real Estate Board of New York’s Residential Division and a member of REBNY’s Board of Governors. In 1996, he was the recipient of the Henry Forster Award, a lifetime achievement and contribution-to-the-industry award.  

The Deal Makers: Wendy Greenbaum
Wendy Greenbaum, began her real estate career in 1980, and joined Warburg Realty Partnership (previously Ashforth Warburg Associates) as one of the original eight partners in 1991. Her membership in this elite group combined with her 25 years in the industry, has warranted her reputation as a formidable dealmaker with enormous skill and experience. Year after year she’s among the top five performers at Warburg Realty, a success her client’s attribute to the direct approach and clear understanding of financial intricacies, enabling her to guide them through the most complex transactions.

Not surprisingly the majority of Ms. Greenbaum’s new business can be attributed to referrals, generated by a large network of satisfied customers who time and time again refer to her as the consummate professional.

In 2004, Ms. Greenbaum was the top performer for the firm, representing buyers and sellers in more than 20 real estate transactions throughout Manhattan.  

Rising Stars: Sarah Fiszel
Sarah Fiszel began her career at Warburg Realty Partnership in July 2001, after graduating with a Bachelor of Science from Cornell University in May 2001, joining a growing number of young Ivy Leaguers choosing residential real estate as their first career. At the time, it was unprecedented for Warburg to hire a real estate salesperson straight out of college, and she continues to be the youngest salesperson at the firm. Her intense passion for real estate was fostered by a constant exposure to the business from an early age. Both of her parents Renee Bross, Managing Director, and Richard Steinberg, Senior Managing Director, are two of Warburg Realty Partnership’s most notable brokers and have been in the business for over 20 years.

Mrs Fiszel works both alone and in partnership with both of her parent. Together they have created an entity capable of covering the entire real estate market by providing a strong and experienced team for all of their clients. She has developed a specialty serving professionals in the hedge fund community who require absolute efficiency, privacy, and expert knowledge of the current real estate market. In the last six months, Mrs. Fiszel has independently either closed or is in contract for $35.2 million of Manhattan properties, and presently had $17 million of exclusives listings. One of her most noteworthy deals in 2005 is the sale of two penthouse apartments at One Beacon Court for a total of $24.6 million, marking that as the highest single sale in Warburg’s history.   
 

 

< Read less

There’s a glut of duplex apartments all over town. Some can be found in pre-war greats such as the Century on Central Park West and Gainsborough Studios on Central Park South. Others—albeit the pricier…... Read more >

There’s a glut of duplex apartments all over town. Some can be found in pre-war greats such as the Century on Central Park West and Gainsborough Studios on Central Park South. Others—albeit the pricier ones—are in duplex-only buildings along Manhattan’s toniest avenues, while others may be offered up as “townhomes.” And while duplexes may offer a dramatic and unique alternative to simplex dwellings, it’s important to remember they don’t automatically translate into roomier digs, or even sunshine-all-day penthouses.
 
Truth be told, they can be smaller than the more common one-level apartments. “Townhouse and duplex residences give the illusion of more space and the feeling of living in a traditional home,” says Stribling’s vice president Linda Melnick. But fair warning: one floor can very well be below street level. Interestingly enough, less space and windowless living rarely deters eager duplex buyers.

From to-the-max luxury living at Trump Park Avenue (a duplex can set you back some $30 million) to more modest-but-perfectly-wonderful duplex digs at the Boulevard on the Upper West Side (one recent listing came in at less than a million), buyers will find a myriad of choices, with the lower-floor dwellings fetching less dollars than their penthouse cousins. On the other hand, no matter the location, features might include private entrances, private elevators, double-height ceilings, and personal outdoor space.

So what exactly is the allure? Warburg Realty president Frederick W. Peters suggests, “Duplex living confounds the cookie-cutter expectations of the apartment dweller. It is both glamorous and mysterious to enter an apartment foyer and see not just walls and windows but stairs. Not only is it more like a house, but it also makes the totality of the space unknowable at first glance. Both architecturally and emotionally, a duplex is always exciting.”

Here are some of our favorites:

Designed by Costas Kondylis, The Link at 52nd Street near Ninth Avenue is a well-appointed paradise. “We’ve tried to capture the fun and excitement of living in one of the city’s hottest neighborhoods by creating a building predicated on cutting-edge design and attention to detail,” stated Elad president and CEO Miki Naftali. Starting at $2.9 million, the three-bedroom townhouses have huge terraces and unparalleled views of the Hudson River. Loaded with plenty of extras, the building offers a lobby-level garden, fitness center and lovely 2,500 square feet interior garden.

Consider one of the Adam Kushner-designed multi-level homes at Baxter and Canal Streets. Bells and whistles here include chromotherapy bathtubs, kitchens clad in steam ovens (read: healthy cooking), computerized refrigerator ovens that move cooled food to oven cooking, Internet refrigerators, and the coolest robotic garage. “Kushner takes 21st-century design to a new level,” says Elliman’s managing director of new home developments Andy Gerringer. “These homes will appeal to hip, young, computer-savvy professionals who relish time-saving, tech-friendly services.” Price: about $3.24 million.

The stylistic penthouse duplex at 79 Barrow near Hudson Street is so extraordinary that it’s been featured in Architectural Digest and on Fox News. A labor of love also from Kushner, this two-bedroom masterpiece serves as the Kushner family home. For $2.95 million, the lucky buyer will get 1,400-plus square feet of living space and terrace and roof access. Notable features include log-cabin walls, exposed brick, a steel stairway, and an in-floor Jacuzzi. The custom-designed kitchen has under-counter fridges and freezers, custom-cut drawers, and top-of-line appliances.

The Lumiere on West 53rd Street near Ninth Avenue has 10 duplex townhouses and 6 duplex penthouses. The penthouses have enormous terraces (as much as 1,300 square feet) with hot tubs. (The townhouses offer the option of installing a hot tub on the terrace.) Starting at $1.25 million, all have private entrances and none offer less than 1,144 square feet of indoor living space. Topping the building amenity list is a Fresh Direct delivery-type refrigerated room at lobby level, a tree-lined garden, and a well-equipped fitness center.

< Read less

In Buying A Home, You Are What You Do By TERI KARUSH ROGERS CONSCIOUSLY or not, Manhattanites tend to subscribe to the you-are-what-you-do-for-a-living notion. So perhaps it's not surprising that from…... Read more >

In Buying A Home,
You Are What You Do
By TERI KARUSH ROGERS

CONSCIOUSLY or not, Manhattanites tend to subscribe to the you-are-what-you-do-for-a-living notion. So perhaps it's not surprising that from the vantage of real estate brokers who shepherd, coax, bully and pander to them, an apartment-hunter's behavior can play out in striking sync with his or her occupation.

Take Wall Street types, dissected with greatest avidity by real estate brokers asked to serve up generalities. While bubble phobia is hardly uncommon in this market, it haunts financial professionals the most, brokers say.

"They always think that they're buying at the top, and they want to buy at the bottom," said Charles Russell, a senior vice president at the Corcoran Group who has worked on Wall Street as a petrochemicals broker. "Every Wall Streeter I've worked with in the last five years, they say, 'I don't want to buy now, the bubble is about to burst,' and then they come back to me a year later and have to pay a million more for the same apartment."

Quantification is the name of the game for finance workers. "Some bankers, every time they look at an apartment they like, they say, 'We've got to go home and put it on the spreadsheet,' " said Mitzie Lau, a Corcoran sales agent, echoing her peers. "It is very funny because you start thinking: 'What else do they do with their life? Do they put everything on a spreadsheet?' "

Ann M. Kim, an agent at Halstead Property, said all her finance clients look for the same information. "When it comes down to putting their money in something, they're going to look at the yield basis, how much they're going to rent the property for if they were to move out, and what type of return they're going to get if they're going to own long term," she said.

In drilling down through the quantitative bedrock, this type of buyer can be oblivious to the gut appeal of a place. Bruce Bennett, another Corcoran agent, recalled the middle-aged private banker to whom he showed a two-bedroom, $1.1 million apartment at Fifth Avenue and East 35th Street in January. The client peppered him with questions about the building's reserve fund, price per square foot and amperage in the kitchen.

"This guy was buried into the listing looking into the numbers," Mr. Bennett said, but the client ignored the high-quality kitchen renovation and the south- and east-facing windows spilling sunshine into the corner dwelling. "I said, 'Have you noticed the view?' " Mr. Bennett recalled. "You have a Fifth Avenue address and Fifth Avenue view. He looked over and said, 'Oh, yeah, I guess that will be good for resale.' "

Those who toil at hedge funds amass fortunes by leveraging little-known information. Perhaps as a result, they suffer from a "need-to-know-more syndrome" - as in more than the broker - when hunting for real estate, said Frederick W. Peters, president of Warburg Realty. He compared this typically young group with the similarly youthful mergers-and-acquisitions bankers he dealt with in the 1980's.

"I'm not suggesting that the younger guys are disrespectful," Mr. Peters said. "It's more that they're sure they know what is going to happen." He offered his merchant-banking clients, in their 40's and 50's, as a study in contrast. "When I deal with people who are a little older, they're more comfortable knowing what they know and letting me know what I know," he said. "They don't sweat the small stuff. They just decided that they want what they want and they're prepared to pay what it costs to get it. The whole issue of winning isn't in the picture so much."

The propensity among the hedge-fund set for making large bets - combined with the Monopoly-money feel of overnight fortunes - can translate into bidding-war gusto. Not so for lawyers, whose comparatively thin bank accounts accrete more incrementally and whose jobs often depend on negotiating a meeting of the minds.

"The idea that there's anything that should be non-negotiable is extremely hard for them to deal with," Mr. Peters said. "A market like that of the first quarter, in which for many properties you only get to negotiate up, that's very hard for them." He added, "The main thing about lawyers is they tend to be kind of hypervigilant, since they're trained to think about every contingency, and it's very hard for them to turn that off when they're dealing on their own account. So my experience with lawyers is that you have to get every detail nailed down."

In general, some brokers say, older lawyers who have achieved major career milestones are easier to work with, just as older Wall Street executives tend to revel less in a masters-of-the-universe persona than do rising stars. "They know what they have to spend, what they want, and they'll negotiate but they're not unreasonable," said Susan Gerard, a broker at Halstead. "The ones who can be the most unreasonable are the junior associates who have just gotten a taste of a good salary but haven't quite made their mark yet. I find they can be a lot more demanding. They can have a whole laundry list of demands that are not always rational."

On the bright side, lawyers excel at providing the sort of minutiae required for board packages, unlike those in the creative fields, who are said by brokers to be less practical-minded - a minus when it comes to closing a deal, but a plus when finding a property to buy.

"Creatives are often more open on where they will go," said Kathleen M. Sloane, a vice president and director at Brown Harris Stevens. "They're more apt to say: 'Can you find me a penthouse in Hell's Kitchen, or one anywhere that's quirky? We don't care about the location; we care about being at the top of the building and having light.' They would be willing to buy the penthouse to which the elevator doesn't go. They're willing to make sacrifices in their lives."

The subset of creatives known as celebrities can be surprisingly pleasant to work with, brokers say, once the phalanx of money managers and advisers is pierced and communication occurs directly with the client. Perhaps because they're accustomed to listening to advisers, this group is said to be more trusting. "With people in finance, when the selling broker says they have another offer, the person in finance will always say, 'Do you believe that?' " said Wendy J. Sarasohn, a senior vice president at Corcoran "whereas the creative people will trust it."

Buyers from the media industry often try to "scoop" their broker with unpublicized information about recent sales. Ms. Lau of Corcoran says: "I think they do that because that's part of what they do every day, so even in their personal life they do the same thing. They always try to feel more justified and validated by something you don't know already." On the positive side, she said, "If you get one media person you get a whole bunch, because they tend to talk a lot with their friends."

Doctors tend to be viewed by brokers as an amenable if not particularly high-flying group, with location - near their practice - among their biggest concerns. After a typically half-hearted attempt to negotiate a lower commission, they tend to undertake a deliberate search.

"They are very good about seeing all the apartments and they remember very well the details," Ms. Lau said. "And then what they usually do is they tell you why they pass on the apartment rather than the other way around. It's sort of like a diagnosis. But once they find something they like, they really stick to it, because they've analyzed all the facts, but it takes them a little longer."

Yet once the diagnosis is made and a contract is signed, said Andrew A. Fine, president of the real estate brokerage A. Fine Company, doctors don't want to deal with the details. "They tend to think about things for a long time," he said. "And they seem to have an attitude that once they go into contract, they really don't want to deal with the details. They just want to snap their fingers and have it done."

Teachers pose a different kind of frustration for brokers. "Teachers are kind of hard because they like to study everything," Ms. Lau said. "I mean, they sometimes make you feel like you're the dumb one, because they take so long looking at a neighborhood that they even remember lines of the apartments and names of buildings and their numbers." On the other hand, she added, "Once they find something they like that they can live with, they will not be nickel and diming the price."

On the subject of nickel-and-diming, such behavior is also infrequent among captains of industry, according to Leighton Candler, a senior vice president at Corcoran whose clients include a fair number of such figures. Not that this crowd moves very often. "When you're in one of the rare, beautiful pieces of real estate in Manhattan, you don't give it up until you've found the one perfect thing that's a little different," Ms. Candler said.

Stereotypes are just that, of course, with many exceptions to the rule. But the canniest brokers recognize that one person's stereotype is another's marketing tool. Mr. Bennett of Corcoran said he positions properties according to buyers' occupations.

"If I know they come out of heavy-duty strategic, financial or analytical background, I start talking about what the building's financials are, the requirements financially they'll need to get into the building," Mr. Bennett said. "If it's a person who is a touchy-feely kind, you know, who works in entertainment or creative writing or that kind of stuff, then I will go into the sunlight and the spaciousness of the space and how oversized the windows are." He added, "When you position yourself that way, people end up thinking that you're very much connecting to them and listening to them."

And what of brokers turned buyers? Does their up-close view of others' peccadilloes translate into model buying behavior? Not by a long shot, says Mr. Peters of Warburg Realty, who has often observed the imperfect metamorphosis among his own agents.

"In general, the minute you put them in the position of being a buyer or a seller, they behave exactly like a buyer or a seller, and everything they know about the market goes completely out the window," said Mr. Peters, who has watched agents become huffy over routine board questions that suddenly seem invasive. "I say that to them all the time - 'You're acting like the client you wish you never had.' "

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An Iron Bubble: Housing Market Isn’t Deflating by Michael Calderone Russian-born finance billionaire Leonard Blavatnik isn’t used to being rejected. So when the board at 927 Fifth Avenue told him…... Read more >

An Iron Bubble:
Housing Market Isn’t Deflating
by Michael Calderone

Russian-born finance billionaire Leonard Blavatnik isn’t used to being rejected.

So when the board at 927 Fifth Avenue told him that he couldn’t buy Mary Tyler Moore’s 5,740-square-foot prewar co-op on the eighth floor, even with $18.5 million in hand, it must have smarted.

Soon insult was added to injury, when the board of Central Park West’s San Remo co-op board told Mr. Blavatnik that he couldn’t buy and combine three units into a massive aerie overlooking the park.

It’s just one way the real-estate market in Manhattan is different from the rest of the country. Elsewhere, who would turn away an investor with money to burn?

These days, though, the real-estate talk in Manhattan is the same as everywhere else: It’s all about the Real-Estate Bubble.

The chatter reached a summit when, on May 25, The New York Times ran a front-page news story about the bubble, followed two days later by Op-Ed columnist Paul Krugman’s gloomy economic forecast. The Princeton professor jumped right into the current real-estate fray, the "final, feverish stages of a speculative bubble."

As in many other "bubble" articles, Mr. Krugman focused primarily on nationwide housing statistics.

But what plays in Peoria, Miami or Syracuse may not play here. And when it comes to watching real estate, there are only three factors to consider: location, location and location.

That, at any rate, is the story the Manhattan real-estate world is eager to tell.

They say the tendency of co-op boards—a major force in the Manhattan market as nowhere else in the country—to weed out speculative investors is a major factor. So, too, are the city’s low crime rate; steady increases in population and immigration; and mounting construction costs. These factors, they say—and not the kind of speculative distance from real value—are what have been driving Manhattan’s real-estate values to dizzying heights. And while it won’t last forever, neither, they say, will it come crashing down on our heads like it did in the late 1980’s.

The Co-op Board

One study, conducted in September 2004 by Business 360, an economic-research firm regularly hired to issue assessments for corporations and investors, confirmed something New Yorkers have long believed: that Manhattan real estate operates on a fundamentally different economy from the industry in the rest of the country.

Training its focus on Manhattan, the study found that over 80 percent of co-ops in the United States are located in New York; what’s more, co-op apartments make up about 80 percent of New York’s residential real-estate market.

"One thing that makes the New York market different is co-op boards," said Frederick Peters, president of Warburg Realty Partnership. "There’s built-in protection in the co-op market against the kind of panic selling which is one of the byproducts of a bursting bubble."

Co-op boards don’t like financial "adventurers"; prospective buyers’ long-term financial security is as important as their bank balance at the time of purchase.

And the boards like it even less when investors come in to rent out or "flip" apartments—meaning they have no plans to occupy the place themselves, only to turn around and resell the place at a higher price than they paid themselves.

"The situation in New York is different in the sense that we don’t have the rampant speculation, the property-flipping," said Jonathan Miller, president and chief executive of Miller Samuel, a real-estate appraisal and consulting firm. "It pales in comparison to what is going on nationally."

Unlike in other hot markets, New Yorkers are primarily buying property for personal ownership rather than to turn a quick profit.

In the heavily investor-driven South Florida market, which has been a major focus of recent coverage, Mr. Miller believes that roughly 60 to 70 percent of sales are speculative purchases.

"I know Miami is a highly speculative market," said Pamela Liebman, president and C.E.O. of the Corcoran Group. "This is not Miami. This is people who want to be here. It’s not a flipper mentality in New York."

Indeed, in Manhattan, investors represent less than a quarter of apartment buyers, and most homeowners will ride the ebbs and flows of the market from the safety of their living room.

"People feel secure; they’re willing to invest their money," said Michele Kleier, president of Gumley Haft Kleier. "You’re buying something that, worse comes to worst, you’re going to live in."

The activism of New York’s co-op boards is one reason the Manhattan real-estate market seems to correlate so poorly to the stock market.

"[T]here has always been a propensity to correlate the housing market to the stock market, and they’re fundamentally different," said Mr. Miller.

For one thing, real-estate transactions take significantly longer than stock transactions. Co-op boards present difficulties regardless of capital that no stockbroker would present. And devalued stocks cannot provide a roof and four walls in the event of an economic downturn.

"Real estate has intrinsic value," said Mr. Peters. "Unlike tech stocks, there is always a there there."

But the more speculative the purchases—the greater the proportion of investing in real estate to actual home buying—the more the resemblance holds up.

"Up until 2000, it was the conventional wisdom that real estate followed the market," said Mr. Peters. "Real estate really is functioning as a separate asset class which doesn’t parallel the stock market."

In the past few years, many records have been shattered, especially in the high-end market, with Rupert Murdoch’s $44 million purchase of Laurance Rockefeller’s penthouse triplex at 834 Fifth Avenue being just the latest example.

But high demand—as long as it’s coupled with a limited inventory— can create a hot market without inflating a bubble.

Indeed, one of the downsides of this booming market has been the response time granted to potential buyers, who are forced into bidding over the asking prices, in many instances without time for careful consideration. There is some speculation that this could lead to an increase in shoot-from-the-hip stock-market-style speculation in real estate.

"In a normal market, it takes four to five months to sell an apartment in New York City," said Jacky Teplitzky, executive vice president at Prudential Douglas Elliman. "In the first quarter, it used to take 24 hours. Or 48 hours."

"It’s not just buying a few shares in G.E.—for the vast majority of us, it’s the most significant investment you are going to make in a lifetime. Now more than ever, in this turbo-charged market, people believe they have to bid instantly," said Sylvia Shapiro, author of The New York Co-op Bible.

But even then, the feverish sell-offs that characterize a stock-market crash seem unlikely.

"It’s an asset that takes, at a minimum, 60 to 90 days to trade," Ms. Liebman said. "The cycle of selling it doesn’t lend itself even to be spoken of as a bubble. You don’t have thousands of houses crowding the market because, one night, someone said the market crashed."

I Am an Island

Full-scale housing busts have occurred here before. But the bust of the late 1980’s happened under very different circumstances.

That crash was catalyzed by excessive condominium conversions during the Koch years. When the stock market dropped by a quarter (over 500 points) in October 1987, the supply of condominiums far outweighed the demand.

In today’s market, however, there is still a constrained supply.

"One of the factors that stimulates the market is supply and demand," said Daniel Douglas of the Corcoran Group. "Nobody told me about Manhattan getting enlarged. It’s a limited landmass. There’s a limit to the amount of things you can do."

Donald Trump’s theory is a bit different.

"That was driven by tax deductions," he said of the 80’s real-estate bubble. "This is driven by a market which is much safer. The late 80’s was driven by tax deals, and when they ended the tax deals rather abruptly, the market came to a screeching halt. The government actually made a big mistake, because it took down a lot of banks—a lot of people went down the tubes."

But he agrees with everyone else on at least one important factor that separates Manhattan from the rest of the nation: water.

"It’s a small little island surrounded by water," he said. "Anything on this island is going to become more and more valuable over time. In other places, you have stretches of land that go thousands of miles. Here, you have just a very small little island."

Unlike the housing market in Omaha, Neb., expansion must be vertical rather than horizontal. There are some areas slated for redevelopment—former factories becoming shabby-chic artists’ lofts—but Manhattan doesn’t offer developers miles of untapped land to build a few thousand McMansions.

"I think New York is a very unique marketplace," said Ms. Liebman. "We like to think of it as the capital of the world. It is an island. And it does not suffer from overdevelopment. We feel the demand in Manhattan is very strong and is still far outweighing the supply, which is causing the market to have a 23 percent increase in prices this year. Our company has had a record-setting sales month in March, April and now in May. All this talk of the bubble is purely fueled by the press."

But how long can the party really last? Will inventory always be in such short supply in Manhattan?

Some point to the fact that, last year, 25,208 new residential units were approved for construction granted—the most in over 30 years. Just 10 years earlier, only 4,010 were permitted. This is one area where there could be a substantial glut of new residences in the next few years, with the downtown condominium market viewed by some in the industry as a place to watch closely.

"There might be some concern down the road just because [downtown] has been the focus of development over the last five years," said Mr. Miller.

Indeed, most industry insiders agree that boutique condos, costing upwards of $2 million to $3 million, could be in jeopardy if supply begins to outweigh demand.

Recently, there has been property flipping in several new luxury-condominium developments (where savvy investors purchased sponsor units from floor plans), but that marks the exception rather than the rule.

"Because there is less financial scrutiny, [condo] buyers may have financial issues down the line," said Ms. Shapiro. "Co-ops are definitely better-protected than condos."

Slowdown Imminent

"There is no bubble! What has happened is, the incredible price escalation is a result of property being tremendously undervalued for a long period of time," said Leonard Steinberg of Prudential Douglas Elliman, a luxury property broker.

O.K., that might sound a bit crazy. But the Business 360 study concluded that the price of housing—still recovering from the early 1990’s decline—is indeed undervalued. The authors of the report predict that prices will rise about 10 percent per year through 2007, followed by a 5 to 8 percent annual gain through 2010.

There’s no question about it: That’s a slow-down.

"The experience we are currently having is a decrease in the rate of increase. The reason that leads to price reductions [is that] sellers invariably price ahead of the marketplace," said Mr. Peters.

While brokers may have obvious reasons to dismiss the rumors of an impending housing bust, many are willing to admit that the market has slowed down, which is admittedly not such a bad thing. Continuous double-digit gains, quarter after quarter, are a strong indicator that prices are inflated, and the market could then drop significantly. And although the percentage gain may drop a few points, it must be noted that there is still a net gain: Prices may rise, albeit not as quickly as in the previous quarter.

Another broker agrees that a slight slowdown isn’t the end of the world and should be expected in any market—but that, in such a case, properties would not be losing any value, only increasing in value at a slower rate.

"The market has slowed down, but what said has it slowed down from?" said Mr. Steinberg. "Has it slowed from a Ferrari to a Mercedes? Yes. It’s still going pretty quickly, it’s still going pretty actively, but it cannot be at full-throttle acceleration forever."
 

 

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Personality Profiles As talk of a real-estate bubble grows louder, difficult choices abound: How can you protect yourself and possibly even profit from what lies ahead? To advise some hypothetical New…... Read more >

Personality Profiles

As talk of a real-estate bubble grows louder, difficult choices abound: How can you protect yourself and possibly even profit from what lies ahead? To advise some hypothetical New Yorkers, we assembled a panel of experts: Frederick Peters, president of real-estate brokerage Warburg Realty; John Vessa, a financial consultant with Smith Barney’s Harbor Group; and Suze Orman, personal-finance doyenne, CNBC host, and author of The Money Book for the Young, Fabulous & Broke.

The Imminent Retirees
After losing a big chunk of their 401(k) money in the tech bust, this couple on the early edge of the baby boom invested in rental properties, buying a studio and a two-bedroom in the building where they already owned a three-bedroom worth about $1.8 million. That apartment is free and clear; the other two have mortgages. They’re counting on rental income to support their lifestyle in retirement.

Peters: Sell the bigger apartment and hold on to the studio. It’s judicious to have a little liquidity. And I think the rental market is going to remain robust, even if the market for sales cools off. If you can get $2,000 a month for the studio, that can be a nice piece of supplementary income.

Vessa: They were overly concentrated in tech stocks, and now they’re dangerously overconcentrated in real estate. If they’re reliant on rental income, an extended vacancy would cause a strain. So I’d advise reducing their real-estate holdings. How about selling the three-bedroom and moving into the two-bedroom to free up capital that can be invested to diversify their cash flow?

Orman: I don’t think they can really afford to own three pieces of property. They should move into the two-bedroom. They can either rent out the $1.8 million three-bedroom or sell it. They’ll get $500,000 of the profits free of capital gains, and pay 15 percent on the rest. They can pay off the mortgage on the two-bedroom—if their income is going to decline in retirement, the home-mortgage deduction becomes much less useful—and still have close to $1 million in the bank, but with no home-related expenses, save co-op fees.

The Splurger
A Wall Street kid bought a Tribeca loft for $3 million. He borrowed from family to scrape up the down payment, leveraged himself, and uses a significant chunk of his bonus to make payments throughout the year. His very low mortgage rate is fixed—but only for the next two years. If it rises by more than a couple percentage points and he doesn’t start making a lot more money, the monthly nut becomes unaffordable.

Peters: As a short-term investment, I’m not sure about a big Tribeca loft. I’d do a two-bedroom apartment, maximum. The current boom has been driven from the bottom. But there’s been a lot less construction of smaller apartments and a lot more construction of larger apartments. Once you get above $2 million, there’s more supply, especially downtown. If he wants to try to hold on to the property, he should convert to a fixed mortgage—the old-fashioned kind.

Vessa: This kid is really rolling the dice! He works in a high-risk industry in which bonuses fluctuate significantly. I’d encourage him to sell the loft and buy an apartment whose mortgage payments are more in line with his recurring salary plus a smaller chunk of his annual bonus.

Orman: He should sell—even if it means taking a loss. If the stock market turns sour, too, he could really be up the creek. These interest-only loans with teaser rates can be dangerous. If you’re paying 2.5 to 3 percent when going rates are 6, the difference is put on the back end. After a few years, not only will the interest rate rise, but he’ll start having to pay back principal. In a stagnant market, he’s got no upside and every risk coming at him.

The Expecters
A couple with a 3-year-old child—he’s in marketing, she’s a lawyer—has a small two-bedroom co-op in midtown worth about $750,000. But the wife is pregnant and they need more space. She plans to go back to work two years after the baby is born. They have about $200,000 in equity in their apartment and have saved up another $100,000.

Peters: They should plan to spend at least $500,000 for that third bedroom. But they shouldn’t rush. Getting past a co-op board with one income is going to be more complicated, and the baby does okay in the dining area for a few years.

Vessa: Even if prices come down, this isn’t the best time to be adding extra costs. Kids are expensive! They should budget for such items as private schools, camp, college savings, and child care. They may think they can afford the bigger apartment given their current expense level. But if they can’t afford it down the road without breathing room, they should consider staying where they are and making do.

Orman: They might be a good candidate for trading up. Sell the apartment, take the equity and the gain, and buy the most reasonable three-bedroom apartment you can find. Then take an option mortgage, which lets you change payments as your situation changes. For the next few years, they might go for the interest-only payment and switch to an interest-plus-principal or refinance when the second income kicks back in.

The Deeply Rooted
The last of the three kids just split for college, and the couple has a fabulous townhouse in Harlem all to themselves. They’ve lived there since the early eighties, have little debt on the house, and have no desire to move. But their home represents 95 percent of their net worth, and they’re worried that if it collapses in value, they’ll lose everything. Plus, with two kids in college and the third in graduate school, they’re strapped for cash.

Peters: They might not need the space anymore. But attachment matters, too. Harlem is a great investment. And if they sell, they’re going to pay a kick-ass capital gain. They should refinance and use some of the money from the mortgage to pay some college costs. Then use some to turn the ground floor into a rental apartment.

Vessa: The most reasonable course of action: Sell the townhouse, and downsize to a less fabulous place, perhaps in the same neighborhood. If they’re adamant about staying, they can still free up some capital by refinancing or taking a second mortgage.

Orman: They shouldn’t worry that their home represents 95 percent of their net worth, because it also represents 100 percent of where they go to every single night. Who cares what happens to the value of the home as long as it is paid for in full? Pay off whatever remains of the mortgage, since they’re not getting a tax break. Then they should tell their kids to take out student loans—rates are very low, and the payments can be tax-deductible—and redirect cash they’d spend on the kids’ education into diversifying.

The Discontented Renter
A single woman can barely afford the $4,000 a month she pays for a prime West Village one-bedroom. It’s where she’s been dreaming of living since she was a teenager in Dix Hills. She has about $100,000 in cash that she wants to use as a down payment. Brooklyn is out of the question. She’s been waiting for several years for the market to take a breather so she can jump in.

Peters: There’s always a problem with waiting around for prices to get better. We’re not always smart enough to know when it’s happening. People who wait for prices to improve often end up waiting for them to get even lower—and then they miss the bottom. So buy the best apartment you can comfortably afford now. Neighborhood snobs are getting more rare. We’ve seen people who would have been happy to live by Columbia wind up on 65th Street and First Avenue, and vice versa.

Vessa: The calculation isn’t just looking at the difference between monthly rent and a mortgage payment—there are closing costs and the carrying costs of ownership. If she really wants to own a piece of the rock, the rock may need to be either smaller, or outside Manhattan.

Orman: She should buy now. Find a place for $700,000 and put the $100,000 down—even if she thinks the market might fall further. As it is, she’s throwing away close to $50,000 a year in rent. That’s about 6 percent of the value of the home she can afford. So the worst she can do in the short term by owning is break even. And the housing market won’t drop 6 percent a year for several years in a row.

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Boom builds for housing  It doesn't matter whether it's near the Empire State Building or Eastchester Bay in the Bronx. Wherever they build it, people will come. The city's residential market has…... Read more >

Boom builds for housing 

It doesn't matter whether it's near the Empire State Building or Eastchester Bay in the Bronx. Wherever they build it, people will come.

The city's residential market has been going strong for so long - since a brief chill right after 9/11 - that buyers worry the bubble is about to burst, and their investments will lose value.

It hit record levels yet again in the first quarter of the year, with the average Manhattan apartment sale rising to $1.2 million, according to appraisal firm Miller Samuel.

But because of continuing low mortgage rates and a short supply of available apartments and houses, builders and brokers do not fear a market downturn this year.

"If people are thinking prices are going down, they're delusional," said developer Ran Korolik.

And he should know. At Lumiere, the condo project he's finishing at 350 W. 53rd St. near Ninth Avenue, he raised prices five times in the six weeks it took to sell 56 condos. He didn't even open a sales office. He started at $850 per square foot and ratcheted up to more than $1,000. That pushed the price of a two-bedroom apartment to $1.2 million.

The Bloomberg administration has sounded a rare note of pessimism about the residential market - by budgeting a drop in city tax revenue from residential sales and mortgages in the year starting July 1. The Office of Management and Budget bases its prediction in large part on a Mortgage Bankers Association forecast of a nationwide drop in mortgage refinancing and new-mortgage origination.

But experts said rates won't rise significantly and cause any slowdown until after January at the earliest.

And though the expected dip will lower tax revenues, they'll still be well above the levels for all but the last two years.

There is, however, one sign of moderation in the market. Among Manhattan's most expensive apartments, which cost more than $2 million, there's a slowdown in the pace of price increases, said Frederick Warburg Peters, president of brokerage Warburg Realty.

Last year, high-end sellers could charge 5% more than the last comparable sale and get their price - even if the prior deal was done only a week before, he said. This spring, they can get 1% more.

Still, bidding wars continue to occur. Broker Toni Haber of Prudential Douglas Elliman recently handled one for an apartment at W. 92nd St. and Riverside Drive that went for more than its asking price.

"There's a lot of frenzy, unless an apartment shows badly because it's really dark, or is in terrible shape, or if it's priced badly," she said.

New construction moves particularly fast. In five weeks, half the apartments at 250-unit 325 Fifth Ave. have been sold, and prices have been raised twice, said Steven Charno of Douglaston Development. So, available one-bedroom apartments now start at $800,000 instead of $660,000.

Developers Jeffrey Levine and Steven Fisch are just pouring the foundation of the 50-story skyscraper. The site's on the opposite corner of 33rd St. from the Empire State Building, in an untried nabe for condos - but buyers aren't deterred.

In three weeks, 20 of the 66 condos at Outlook Point Estates on Eastchester Bay in the Bronx have been sold, said project manager Sam Larca - from $525,000 two-bedroom units to a three-bedroom for $690,000.

"Every developer I see has a smile on his face," said Joshua Muss of Muss Development, who works in Brooklyn, Queens and Staten Island. Sales are moving swiftly at two new buildings at his Oceana complex on the boardwalk in Brighton Beach. A three-bedroom duplex at 125 Oceana Drive East sold for $2.7 million, the highest price to date among the 14 buildings in the gated community.

In the first week of marketing the apartments at Beacon Tower at 85 Adams St. in Dumbo, Corcoran broker Peter Noonan sold a penthouse for $2.4 million, or $1,344 per square foot - a record price for the Brooklyn neighborhood.

"I see no bubble in the real estate market," Noonan said.
 

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HIPPIE HOOD MATURES INTO AFFLUENT AREA Upper West Side rivals East Side with ritzy rents, restaurants and retail By Judith Messina Last year, when Jeffrey Lefcourt was searching for a place in the city…... Read more >

HIPPIE HOOD MATURES INTO AFFLUENT AREA

Upper West Side rivals East Side with ritzy rents, restaurants and retail

By Judith Messina

Last year, when Jeffrey Lefcourt was searching for a place in the city to locate an upscale seafood restaurant, he considered trendy streets downtown and on the affluent East Side. In the end, he chose an unlikely spot at West 84th Street and Amsterdam Avenue that had previously housed a troublesome bar.

In this neighborhood, Barney Greengrass, the Sturgeon King, used to pass as a fine dining spot--but not anymore. Mr. Lefcourt's Neptune Room, where a plate of rare tuna goes for $23, joins a bevy of urbane new eateries on the Upper West Side, including Aix, Ouest, Onera and Nice Matin.

"On the Upper West Side, it used to be that people were not comfortable going to a neighborhood restaurant and spending a little more money," says Mr. Lefcourt, who also owns Jane on Houston Street. "That mentality has changed."

Welcome to New York City's new gold coast. Dotted with elegant restaurants, upscale retail stores and high-living professionals, the Upper West Side has become an enclave for the wealthy. A recent analysis for Crain's by Claritas Inc. shows that ZIP code 10024, which runs from West 77th Street to West 91st Street, is the fifth-wealthiest neighborhood in the city--not far behind the tony zones of the East Side.

Not everyone is pleased with the area's transformation. Some longtime residents have resurrected the complaint that gentrification will destroy the diversity that has been the hallmark of the Upper West Side. The bigger threat is that skyrocketing rents and housing prices will crash, returning the neighborhood to its previous shopworn self.

Once the stomping ground of aging hippies and penniless actors, the Upper West Side was traditionally a low-rent neighborhood, prized by residents for its bohemian flavor but shunned by tourists and well-to-do New Yorkers.

In the early to mid-1990s, residential developments around Lincoln Center, such as the Millennium, brought young professionals and better stores to the southern end of the Upper West Side. Later in the decade, the trend pushed northward, aided by plummeting crime rates and the dearth of affordable apartments below 72nd Street.

It's true that the neighborhood has always had a handful of venerable apartment buildings on Riverside Drive and Central Park West, such as the Beresford and the Eldorado. But now practically every building is a destination as young bankers and lawyers stream to the area. Some are refugees from downtown, disheartened by the devastation of Sept. 11. Others are dual-income couples looking for space to raise a family, or empty nesters from the Upper East Side hankering for a neighborhood with a more relaxed ambience.

"It really still is a lifestyle choice," says Frederick Peters, president of Warburg Realty Partners. "The West Side is perceived as less formal and hipper."

Daren Herzberg, a former commodities trader who is now a real estate broker, recently moved to the neighborhood from downtown digs. He and his wife bought a four-bedroom, four-bath apartment on West 86th Street for their family, which includes a year-old child.

Convenience counts
"We love it because it's very convenient and has lots of programs and activities (the baby) can do," Mr. Herzberg says. "I don't think any neighborhood is more convenient than the Upper West Side."

Central Park West remains the prime Upper West Side address, with the best apartments there going for $8 million to $10 million, up from $2.5 million in the mid-1990s. In fact, brokers say, a flat on Central Park West facing the park can sell for 10% to 15% more than comparable space on Park Avenue. But even on less swanky streets, prices are soaring. In February, the median price for a one-bedroom apartment was $577,000, well above the $492,500 that a similar apartment would command on the East Side.

"Everything is a bidding war now," says Abby Gellert, director of West Side sales for Halstead. "You have to prepare buyers that the first bid must be the asking price."

The influx of well-heeled professionals is transforming shops and neighborhood restaurants as well, sending commercial rents to Upper East Side levels and beyond.

"There are strong demographics and new spending power," says Faith Hope Consolo, chairman of retail leasing and sales for Prudential Douglas Elliman. "You have people there now who spend money and don't just hang out on a park bench."

Retailers that formerly spurned Broadway as too dowdy are now willing to pay more than $250 a square foot for a chunk of that terrain, according to Ms. Consolo. As for restaurants, Upper West Side residents are practically giddy savoring the options now available to them.

Gourmets galloping in
"Now you have all these people on the Upper West Side who are eager to eat out, and their idea of a gourmet meal isn't pizza or Chinese," says Warburg Realty's Mr. Peters, who lives in the area.

Enter restaurateurs such as Didier Virot, a veteran of such celebrated eateries as Jean Georges and defunct La Côte Basque. Mr. Virot and his backer Philip Kirsh opened Aix at West 88th Street and Broadway in 2002. The restaurant features Provençal cooking; a plate of roast lamb will set you back $36.

"It was a risk, but it turned out well. We're making money," says Mr. Kirsh, who has invested $1.2 million in Aix.

Aix draws about 60% of its clientele from the neighborhood. Others come from the East Side, Westchester and downtown--a trek that few New Yorkers could have imagined making five years ago.

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STRONG GROWTH IN EXCITING NEIGHBORHOODS By Frederick W. Peters The pace of the 2004 real estate market was extraordinary. While the rate of increase in prices slowed during the second half of the year,…... Read more >

STRONG GROWTH IN EXCITING NEIGHBORHOODS
By Frederick W. Peters

The pace of the 2004 real estate market was extraordinary. While the rate of increase in prices slowed during the second half of the year, inventory remained low. Trading in all markets maintained a brisk pace with prices reaching record levels from brownstones in Fort Greene and Boerum Hill in Brooklyn to condominiums in Harlem and lofts in TriBeCa.

Throughout the City, mint condition properties were still strong sellers, as busy professionals and families shied away from construction projects, unless strongly motivated by price differentials.  Tight pricing remains the best approach to foster competitive bidding, while overpriced units continue to languish on the market for months.  Some of the biggest news has been the record sale numbers achieved in areas strongly impacted by the expanding housing boom moving deeper into Harlem, Brooklyn, Long Island City, Washington Heights and Inwood.

Small apartments continued to be a driving force behind the strength of the sales market.  In spite of apprehensions to the contrary, the cost of borrowing remains at record lows. Buying thus remains a more attractive option than renting for people entering the marketplace at all price points.

Of course, with alcove studios costing over $300,000 in many parts of the City, buying is not an option for everyone. Consequently, the rental market has picked up a bit, although it remains weaker than in past years. For those able to put together a down payment, mortgage payments and common or maintenance charges are still a better after tax deal than rentals.

New Yorkers are more enthusiastic than ever about owning their homes.  Each blip in the stock market, which has been circling just above 10,000 for months now, makes real estate seem a more stable and attractive investment. Even the many reports and news about a "real estate bubble" have not deterred most buyers. After all, Fortune Magazine listed New York as 22nd on its list of America's most inflated cities, and many economists argue with money so cheap, housing is actually at its most inexpensive level relative to income in a quarter century.

Another interesting phenomenon for families seeking two- or three-bedrooms is the resurgence of the Upper East Side as a viable option. Increasingly, postwar apartments east of Third Avenue offer better value than their counterparts on the Upper West Side or Downtown.  Warburg recently sold an apartment in the East 60s to a family who realized they were getting a better value there than in Washington Heights, where they had been looking for months without finding a suitable property in their price range.

Brownstones, large apartments, large lofts: all have been highly saleable provided the pricing and condition were right. In this market we see another interesting phenomenon: as awareness of the actual impact of the 1996 change in the capital gains tax laws has grown, more and more expanding families are considering combining their current unit with an adjacent one. Although this generally requires that the family move to a hotel for six months, the potential savings are enormous when compared to the cost of selling an enormously appreciated six or seven room unit, paying 27% in Federal, state, and city capital gains taxes to the government, and then starting over to locate a larger space. Increasingly, one of the most likely buyers for any apartment is the neighbor.

Everywhere you look, New York is on the move. Bruce Ratner’s proposed revitalization of Downtown Brooklyn will make the borough even more of a destination for upscale New Yorkers seeking a more intimate neighborhood experience. Similarly, the boom on 125th Street and throughout Harlem, with luxury rental and condominium units appearing from Broadway as far east as First and Second Avenues, has made that neighborhood a beautiful residential area with a family feel, more and more sought after by Manhattanites of every type.

Now the election is behind us, job creation nationwide is on the rise and the economy is stable and growing moderately. While demand continues to outstrip supply we expect a strong 2005, with modest price growth in an unhurried selling atmosphere.

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Warburg Realty Harlem Named Exclusive Sales Agent For Roosevelt Lane Condominiums In East Harlem Warburg Realty Harlem has been appointed the exclusive sales agent for The Roosevelt Lane Condominiums,…... Read more >

Warburg Realty Harlem Named Exclusive Sales Agent For Roosevelt Lane Condominiums In East Harlem

Warburg Realty Harlem has been appointed the exclusive sales agent for The Roosevelt Lane Condominiums, one of the newest residential developments in East Harlem located at 227 East 111th Street in Manhattan. The sales team, led by Chris Halliburton, Executive Vice President of Warburg Realty Harlem, will market the remaining available apartments in the 22-unit building. Frederick W. Peters, President of Warburg Realty Partnership, made the announcement.

"We are thrilled to be named the exclusive sales agent for Roosevelt Lane Condominiums, the first luxury high-rise in the neighborhood, which has generated a great deal of interest in the market," commented Mr. Halliburton. "The value of this product is excellent; the design team led by Gary Silver created a highly desirable space in an increasingly popular location, ultimately attracting many professionals."

The Roosevelt Lane Condominiums was designed by Gary H. Silver Architects, P.C., a full-service architectural firm based in New York and developed in partnership with HSE Realty LLC. The seven-story property offers loft style units ranging from studios to three-bedroom, two-bath penthouse units with outdoor space. The homes were designed to fully maximize on the light and airy qualities with ten-foot ceilings and continuous banks of windows. Prices for the condominiums range from $219,000 to $650,000 with the units available for occupancy in February 2005.

"Warburg Harlem was a natural choice when selecting a marketing agent for The Roosevelt Lane Condominiums," stated Mr. Silver. "The team's intimate knowledge of this market combined with their excellent personalized service made them the ideal brokerage to handle the condominium sales."

This is an exciting time for Warburg, as the partnership continues to evolve and remain competitive in this dynamic market. As the first major real estate brokerage firm to offer a full-time presence in Harlem, Warburg is excited to now provide residents in every neighborhood of Manhattan with its renowned luxury and personalized service.

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December 2004 Apartment Market Up over 3Q By Stuart W. Elliott The Manhattan apartment market seemed to fare better in November than it had during the third quarter, with studio and one-bedrooms the most…... Read more >

December 2004
Apartment Market Up over 3Q
By Stuart W. Elliott

The Manhattan apartment market seemed to fare better in November than it had during the third quarter, with studio and one-bedrooms the most active segment, brokers and appraisers said.

Jonathan Miller, president of the appraisal firm Miller Samuel and author of the Douglas Elliman Manhattan Market Overview, said the market appeared to "kick back on" to a degree in mid-October, around two weeks before the election.

"The sales volume each month declined throughout the third quarter, but in October it picked up and November seemed to be more of the same," Miller said in late November.

Lower-end apartment sales continued to dominate the market, a continuation of a trend seen in the third quarter, when studio and one-bedroom units made up 54 percent of all the apartments sold, a rise from 49 percent the quarter before, according to Miller.

"That segment saw its large market share continue," he said. "It was still fueled by concern from buyers that interest rates will rise."

Firms had somewhat different takes on the overall market, depending on the market segments they target.

Frederick Peters, president of Warburg Realty Partnership, whose brokerage "doesn’t do a huge amount of business in smaller apartments" said the market "was not bad" but that there was "very little frenzy."

"Before the election, everyone was saying we have to wait until after the election," said Peters. "Now, they are saying we have to wait and see how bonuses are."

"People are making deliberate choices," he added. "Buyers are out there because they have to make lifestyle choices," such as needing extra space for a new child.

A new report by Warburg, which analyzes customer demographics, found that 31 percent of buyers stated more space as the reason for moving during the third quarter. At the mid-year mark, owning instead of renting was the primary reason for purchasing.

Miller cited a spate of $10-million-plus sales recently, but said the high-end market was "not robust, but healthy, or active."

Andy Kim, director of sales at Nest Seekers, which does a greater percentage of its sales in the studio and one-bedroom market, was "surprised with the activity in November."

"We noticed a pickup in activity since the election," he said. "There were a lot of people searching in August and September, but people weren’t as decisive. Now, a lot of people are making a decision. Everybody is anticipating that the rates are going to go up."

Overall, Miller said he anticipates possible 3 percent growth in prices for the fourth quarter, compared to the 2.1 percent price increase seen during the third quarter, and the 10.5 percent price increase seen during the market frenzy during the first quarter of 2004.

Inventory remains low, with levels unchanged from September and October, Miller said.

Peters said inventory is "terrible." He said his firm’s exclusives "are probably as low as they have been in the last 24 months." Kim said the pool of inventory is "dry".

Miller said he expects to see "higher mortgage rates over the next six to 12 months, but it will be rather modest. I would guess somewhere in the mid-6s. Even if it goes up, it will still be historically low."

"I don’t see the market cratering and I don’t foresee frenzy," said Peters.

Wall Street bonuses, which could help give the market a boost next year, might be a mixed bag. "From what I hear, the bonus situation on Wall Street will be very variable according to different departments," said Peters.

The rental market, meanwhile, continues to be tight, even though it is not as hot as it was this summer, which was the first sustained upturn in the market since the dot-com bust, said Bruno Ricciotti, a principal at Bond New York.

"Rents are higher than last November, but down since the summer," he said. "There are less incentives from owners [such as paying brokers commission instead of the renter, or free rent] compared to last year. The incentive market really evaporated this summer."

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Seeing Renaissance, Broker Opens Office In Harlem Frederick Peters considers his firm a pioneer in Harlem’s real estate renaissance. His company, Warburg Realty Partnership, just opened an office in…... Read more >

Seeing Renaissance, Broker
Opens Office In Harlem

Frederick Peters considers his firm a pioneer in Harlem’s real estate renaissance.

His company, Warburg Realty Partnership, just opened an office in Harlem, and Peters calls his company the first major brokerage to move into the neighborhood.

After languishing for years, Harlem’s housing market no is booming. Prices are rising, and developers are putting up new buildings.

“They have some of the most gorgeous turn-of-the-century housing stock you can find anywhere in New York City,” says Peters, president of Warburg. “There’s a lot of excitement in the area.”

Of course, Warburg isn’t the only company to see opportunity in Harlem. Corcoran Group, a unit of Cendant Corp., also plans to open an office in Harlem.

Peters named Christopher Halliburton, a veteran broker who specializes in the Harlem market, to run the office.

“One of the things that’s wonderful about Harlem is it still feels like a community,” Peters says. “We want to come into the community as a partner. That’s one of the reasons we wanted to open an office there rather than just having our agents come into that area. We want to invest in the community as well.”

Peters aims to hire about 30 agents for the 2,500 sf office. So far, he says, about a dozen have joined, and Peters says the recruiting pitch as been low-key. In fact, agents have approached Warburg because they want to work at a firm that has committed to the Harlem market, Peters says.

“If they’re ambivalent about the area,” Peters says, “then I’m not interested in them.”

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Warburg Realty Opens Office in Underserved Harlem Area Real Estate Weekly October 27, 2004 Warburg Realty Partnership marked the grand opening of its Harlem office recently, drawing local dignitaries,…... Read more >

Warburg Realty Opens Office in Underserved Harlem Area
Real Estate Weekly
October 27, 2004

Warburg Realty Partnership marked the grand opening of its Harlem office recently, drawing local dignitaries, residents and real estate professionals. More than 250 people gathered at the 2235 Frederick Douglass Boulevard location to join Warburg in celebrating the firm’s commitment to the Harlem community as the first major Manhattan brokerage to provide residents with a full–time, dedicated sales force in this market.

“Warburg is incredibly pleased to be celebrating the opening of the Harlem office. We are excited to have officially joined the Harlem community and provide residents with the first-hand, intimate knowledge and full suite of services we have offered Manhattan neighborhoods since 1896, “ said Frederick W. Peters, the company’s president.

“As part of the Harlem community, we are thrilled to participate in the area’s current real estate renaissance, while playing an active role in supporting and preserving this neighborhood’s extraordinary heritage and culture, “ he added.

The Harlem office will be managed by Christopher Halliburton, a native New Yorker with a long family history of involvement, both politically and economically, in the Harlem community. Since 1982 Mr. Halliburton has been involved in buying and selling real estate in the area and now specializes in residential and commercial property sales.

“In the Harlem office, we will provide both buyers and sellers with the luxury services once only readily available in neighborhoods below 96th Street- this is an exciting time for Warburg and Harlem residents,” Mr. Halliburton said.

“In a time where mammoth brokerage houses are the norm, Warburg is proud to offer the firm’s trademark personalized service and attention to the city’s finest neighborhoods,” said Mr. Peters. “We pledge to remain true to our century old practice of luxury services, while embracing the industry’s continuous modernization efforts in order to provide our clients with the complete professional package in this dynamic real estate market.”

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Warburg Realty Partnership Celebrates Harlem Office Opening New York Real Estate Journal, October 26-November 1, 2004 Warburg Realty Partnership marked the grand opening of their Harlem office, drawing…... Read more >

Warburg Realty Partnership Celebrates Harlem Office Opening
New York Real Estate Journal,
October 26-November 1, 2004

Warburg Realty Partnership marked the grand opening of their Harlem office, drawing local dignitaries, residents and real estate professionals.

Over 250 people gathered at the 2235 Frederick Douglass Boulevard location to join Warburg in celebrating the firm’s commitment to the Harlem community.

The Harlem office will be managed by Christopher Halliburton, a native New Yorker with a long family history of involvement, both politically and economically, in and around the Harlem community.

Since 1982 Halliburton has been involved in buying and selling real estate in the area, and now specializes in residential and commercial property sales.

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MOVING ON UP  October 11, 2004 Warburg Realty Partnership is gearing up to open a Harlem office this month at Frederick Douglass Boulevard between 120th and 121st streets. The first major brokerage…... Read more >

MOVING ON UP 
October 11, 2004

Warburg Realty Partnership is gearing up to open a Harlem office this month at Frederick Douglass Boulevard between 120th and 121st streets. The first major brokerage to open there, they won’t be alone for long. The Corcoran Group has begun negotiations for space not far from there. It’s no surprise big brokers are finally heading uptown; what’s surprising is how long it took.

“In opening a Harlem office, we want to celebrate the community’s extraordinary heritage and Warburg’s ongoing investment in Manhattan’s finest neighborhoods,” said Warburg president Frederick Peters. “Warburg is committed to bringing Harlem’s residents the same first hand, intimate knowledge and services it has provided since 1896.”

Pam Liebman, Corcoran’s president and chief executive officer, noted, “We wanted to wait until there was a more robust market of second-generation buyers and sellers – those who intend to remain Harlemites instead of purchasing for a profitable flip. After completing several projects here, we’ve determined that the neighborhood is hot for professionals of all ages.”

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Your Broker as Your Friend, or Maybe Not By NADINE BROZAN   October 3, 2004 They may come together for what seems like a straightforward business transaction — the sale or purchase of a home —…... Read more >

Your Broker as Your Friend,
or Maybe Not

By NADINE BROZAN
 
October 3, 2004

They may come together for what seems like a straightforward business transaction — the sale or purchase of a home — but the relationship between broker and client can be an emotional minefield, ripe for love or hate, admiration or scorn, friendship or hostility.

If nothing else, it is a highly personal connection. A broker, after all, probably knows as much about the client as any therapist, lawyer, accountant or even spouse.

Brokers know what their clients earn and what they're worth — they have to, in order to figure out which co-ops make sense for them. They may know if they're planning to leave their jobs, or their spouses. "People who are planning to get divorced may not yet have told their friends or their children but need an appraisal before dividing the assets," said Daniela Kunen, a managing director of Douglas Elliman. "You hear very personal information."

Whatever it is, the connection is rarely tepid. Frederick W. Peters, president of Warburg Realty Partnership, said that he tells novice agents that they are in a business that fosters short-term intimacy. "You are immediately plunged into a close relationship with a buyer or seller and then when the transaction is consummated, it is over, unless you choose otherwise." he said.

Many people do choose otherwise, having planted the seeds of enduring friendship in the collaboration to buy or sell a residence, or, if they live in the same community and run into one another in the supermarket, an ongoing acquaintanceship.

"You may be the first person in town they know," said Roberta Baldwin, an associate broker with Re/Max Village Square in Upper Montclair, N.J., who gives a New Year's party with a magician and a Labor Day barbecue for her clients and their children. "You become the person they rely on when they need the name of a contractor or doctor."

But brokers offer more than practical tips. "For every person or couple who buys for the first time and moves through the process without a care in the world, there are 10 who bring preconceived notions about what they should be buying, what their parents and relatives think, fears they have about their children and safety, money issues and worry about the economy," Ms. Baldwin said.

Strong bonds in individual cases notwithstanding, as a group brokers and clients do not hold one another in particularly high esteem.

Preliminary findings of an online survey of attitudes of brokers and buyers who have bought properties in Manhattan in the last three years show that 78 percent of the 51 brokers who responded and 69 percent of 152 buyers and sellers "strongly or somewhat strongly" agreed with the premise, "Most people don't trust real estate brokers or expect much from them." The survey was commissioned by Braddock & Purcell, a real estate consultant that brings brokers and clients together, and carried out by Penn Schoen & Berland Associates, the market research firm.

"You can develop a close relationship with your broker, but it is in the context of an industry for which people do not have a high opinion," said Paul F. Purcell, a partner in the firm.

John Podesta, national sales manager for Osh Kosh B'Gosh, has enough broker horror stories to keep him talking through many a dinner party.

The broker who helped him buy his first Manhattan apartment on 61st Street and Amsterdam Avenue, for example, spent more time on the phone dealing with a failing romance than she did with him during scouting expeditions. "I did a lot of things that were her job, like looking for apartments in the paper," Mr. Podesta said.

To make it up to him, "she took me to an expensive restaurant, and then it turned out it didn't take credit cards and she didn't have cash," he said. "She never paid me back." Things got worse. He described the broker for his next apartment on West 26th Street as a "deceitful liar who misrepresented what was going to be done to the building and the character of the developer."

"The lobby renovation never looked the way it was supposed to," he said, "and neither the penthouse nor the rooftop garden were ever built." When he put that apartment on the market, he had a broker who arrived late for an open house. "People were already there when he came riding up on his bicycle with headphones on and looking disheveled," he said.

The next stop: Down Under the Manhattan Bridge Overpass, the trendy Brooklyn neighborhood known as Dumbo. He bought an apartment there by directly responding to a listing rather than using a broker. But he wasn't impressed, either, by the broker who was representing the seller. "I never heard from the seller's broker, but she kept calling her lawyer to find out when the commission was coming," he said.

Now he lives at Madison Avenue and 63rd Street, where, he said, '`I had a good, diligent broker who was determined to get the deal done and who pushed it."

Among the qualities considered essential for good brokers are: discretion; trustworthiness; sensitivity; diplomacy; serious knowledge about neighborhoods, buildings, boards, management, and potential pitfalls; an ability to listen; and strong intuitive instincts.

Intuition is particularly prized. "There is a creative component to this, fitting a round peg into a square hole," said Rosette Arons, a vice president for Stribling & Associates. "The creative process comes in when you hear them say, `I need a three-bedroom with such and such,' and that is not at all what they want. I listen to what they want, even when they may not know what that is, and I can tease it out of them."

Clearly that was the case with Lisa Simonsen, a vice president for the Corcoran Group, and Serita Winthrop, who sold her seven-room apartment on East 79th Street and bought a loft with soaring ceilings at the renowned Hotel des Artistes on West 67th Street in June.

Ms. Simonsen, an occasional fitness trainer, had been exercising with Ms. Winthrop, who has four grown children, and, she said, she sensed her student subconsciously harbored a yen for a new place.

"I had told her I couldn't imagine ever moving," Ms. Winthrop said. "Then, after the second week of working out, I suddenly said, `I want to move.' I wanted a smaller space, and with my 60th birthday coming up, it was time to simplify. She took a low key approach, and said, `We can always look without buying.' "

But when they saw the duplex in the Hotel des Artistes, "I sat down on a banquette and said, `It looks like a stage set and makes me feel as if I were in the theater,' " she said. "It is entirely different from anything I have ever lived in. I began to figure out about sofa beds to accommodate close friends or children and grandchildren."

She moved in July but continues to get together with Ms. Simonsen. "We are definitely friends," she said as they sipped tea together the other day. "We have introduced each other to the people in our lives."

Timothy Melzer, a 27-year-old vice president for Douglas Elliman, prides himself on turning customers into friends. "By the time it is over, almost all of them call to say they miss talking," he said.

One of those clients, Dr. Anthony W. Cincotta, was called upon to show an unusual degree of trust when he decided to buy a penthouse at Morton Square, the town house, condo and rental complex at Morton and West Streets, about 18 months ago. "It is hard to trust anyone in New York, and I am one of those types who asks people to take off their shoes before walking on my carpet," he said.

Dr. Cincotta, a neuropsychiatrist and family physician at Catholic Community Services in Newark, had been looking for a penthouse with outdoor space, when Mr. Melzer proposed the Morton Square penthouse. "I froze when he told me about it and said, `This is $1 million more than I wanted to spend,' " he recalled. "He kept arguing with me and said, `This is where you have to be, this is where you will make money.' I gave in."

After Dr. Cincotta agreed to buy it, Mr. Melzer went to great lengths to cement the deal. "The developer was demanding a check for more than 10 percent, $191,500, an hour after it came on the market, so he needed his checkbook, which was in Manhattan," he said. "I had to drive to Newark, get his keys, drive to Manhattan, go to his apartment, get the checkbook, drive to the sponsor's office, pick up the contract, drive back to New Jersey, get the contract signed and the check written. By the time I got back to the sponsor's office, they had gotten another offer, but fortunately it came from someone who didn't have their checkbook."

The property, which closed on Sept. 23, has appreciated more than $1 million since the initial listing, and Dr. Cincotta will rent it out, he hopes, for $19,000 a month, Mr. Melzer said, and eventually live in it.

The two have been friends since. "Once you develop trust and you talk on the phone everyday, the walls start coming down," Mr. Melzer said.

Patricia Whitehead, an associate broker with the Corcoran Group, considers herself something of a surrogate mother to Jennifer Eggers, an advertising copywriter from Eugene, Ore., who is in her 20's and just bought her first apartment in the city. The two met at an open house. "I could see she was taking notes," Ms. Whitehead said. "I called her the next day and said, `Why don't you let me help you get through the maze?' "

When Ms. Eggers's parents came to town from their home San Ramon, Calif., "I bonded with them and they decided that if I liked an apartment we found, that would be good enough for them and they wouldn't have to come back," Ms. Whitehead said. Two weeks later, they found the apartment, a loft-style co-op with an 18-foot ceiling and spiral staircase on East 88th Street.

Navigating the co-op approvals process was intimidating, Ms. Eggers said, "but I did feel that Patti was looking out for me every step of the way." And beyond. Ms. Whitehead noticed that the seller's broker was interested in Ms. Eggers and after the closing, urged him to call her. "So far they haven't gone out, but I keep my antennas open," Ms. Whitehead said.

There are differences between being the broker for a buyer, whose primary goal is to find a home, and the seller, whose goal it to reap the highest possible profit.

There are also distinctions between city and suburban real estate that can affect the interaction. For one thing, there is a Multiple Listing Service that prevails in the suburbs but has not gained acceptance in the city.

"In the suburbs, any agent can show you any property and we discourage exclusives," said David Firnhaber, branch manager for the Houlihan Lawrence office in Chappaqua, N.Y. "So we tend to work with people for a long time, showing them as many things as they could possibly want. It is more intimate because you are not meeting someone in the lobby of an apartment or taking a limo or taxis, but you spend a lot of time in the agent's car. So I think there is a stronger bond."

Not so, says Michele Kleier, president of Gumley Haft Kleier, who started in the business when she was pregnant with her second child and met her first clients in the sandbox. "I always dealt with friends, and clients who were not friends became friends," she said. "I feel I look out for people more than strangers will."

Though she does not advocate using a broker simply because he or she is a friend, she does expect that her friends will call on her when they are in the market. "I am the broker for most of my friends," she said. "If they don't feel I am a good enough broker to be their broker, then they are not a friend."

Mr. Purcell, whose company helps buyers find brokers who will best suit them, doesn't think that's the right approach. He argues that the wall between professional and personal should be maintained. "You are not friends, you are a professional service provider," he said. "When you are friends, the client can believe they are entitled to special considerations they would not get in an entirely professional relationship, such as commission concessions."

Of course, in today's intense market, properties move so quickly that the concept of friendship may be moot. "You might meet a buyer once at an open house and they make an offer," said Carolyn Meenan, an associate with Bryce Rea Associates in Little Neck, Queens. "You don't have time to develop relationships."

 

 

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Keep Business Away From The Personal By Frederick Warburg Peters a chapter from "Trump: The Way To The Top" My mother recalled my grandfather, who was the CEO of Abraham & Straus department stores,…... Read more >

Keep Business Away From The Personal
By Frederick Warburg Peters
a chapter from
"Trump: The Way To The Top"

My mother recalled my grandfather, who was the CEO of Abraham & Straus department stores, saying to her, "You
should never permit your business to pay for your personal expenses. There is more to business than money; you have to strive to live your life as an honorable person. My business has been extremely fair to me, and I need to be fair in return."

These words have had a profound impact on me. In my own career, I wanted to continue the tradition of family integrity that my grandfather had so clearly embraced. As a result, I never let my company pay for a meal, a taxi or a limousine, or anything else that was not clearly business related. What I can't afford, I don't buy. I can't think of a better way to honor my grandfather's memory.

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State of the Manhattan Market The feelings of froth continue in the Manhattan real estate market which made news this summer when average…... Read more >

State of the Manhattan Market

The feelings of froth continue in the
Manhattan real estate market which
made news this summer when average
co-op prices topped $1 million for the
first time. (Of course, the median - a
better gauge of what most buyers get 
for their money is at a mere $600,000.)

Yet, brokers surveyed by HC&G are not expecting a surge in high-end asking prices this fall. "I would
try to impress on sellers not to price much over what we were doing at the height of the winter," says
Stribling vice president Linda Melnick. Confirms Halstead senior vp Andrew Phillips. "Prices have leveled
off, with the exception of specialty properties."

Though brokers report decent inventory in the $10-million-and-over class, they say most motivated  
buyers must move quickly to nail down desired abodes. "The family apartment market is 
particularly hot," says Frederick Peters, the head of Warburg Realty. "As far as neighborhoods 
go, Carnegie Hill, West End Avenue and Central Park West are really hot. And, the Brooklyn 
trend is big - it's beginning to penetrate the upper marketplace."

Indeed, the Upper East Side continues to lose steam as the sine qua non destination for the city's well-to-do. "The Meatpacking District is now very high-end," says Jackie Teplitzky. "Park Avenue South 
is hot. People are willing to venture to find a place they love." Confirms Melnick, "Anyone young I'm working 
with forget it, I mention the Upper East Side, and they think I'm nuts." Of course, given the lack of 
inventory on the Upper East Side, one wonders if housing pragmatism is the real choice of a new 
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The New York Times Should a Lawyer See a Listing Agreement? By Jay Romano September 12, 2004 NLY the most confident property owner would enter into a contract with a buyer to sell a house or apartment…... Read more >

The New York Times

Should a Lawyer See a Listing Agreement?
By Jay Romano

September 12, 2004

NLY the most confident property owner would enter into a contract with a buyer to sell a house or apartment without first getting the advice of a lawyer.

But it seems that only the most cautious owner hires a lawyer to examine the contract — also known as the listing agreement — between the seller and the broker.

"Most sellers see the listing agreement — which is rarely over two pages — as clear," said John A. MacLachlan, a lawyer in East Hampton, N.Y. "They rarely think about the potential future problems."

Mr. MacLachlan said that while he does not necessarily recommend that a seller hire a lawyer to examine the listing agreement, it is not unusual for sellers to call in legal experts.

"The few times I have had clients ask that I get involved at that stage are when the price gets to seven figures," he said. "These individuals appreciate an attorney's expertise and don't mind the cost for better understanding and protection." Still, having a lawyer look over a listing agreement — even when the sale price is more modest — certainly could not hurt.

Arthur I. Weinstein, a Manhattan lawyer who is also vice president of the Council of New York Cooperatives and Condominiums, said the listing agreement is a binding contract between the seller and the broker that sets forth not only the amount of the broker's commission, but also the terms under which the property will be marketed.

"I believe it is vitally important for listing agreements to be negotiated as carefully as any other contract," Mr. Weinstein said, adding that the additional cost should be negligible if the same lawyer will be used for the closing. "The listing agreement contains a whole bunch of obligations and understandings that most sellers are not aware of."

For example, he said, once a listing agreement is signed, the broker is entitled to a commission when he or she has produced a "ready, willing and able" buyer at the listed price. It is possible, he said, that circumstances unforeseen by the seller — illness or loss of a job, for instance — could make it necessary for the seller to reject a ready, willing and able buyer. In such a case, the seller could be required to pay the broker's commission even if there is no sale. "When I review a listing agreement, I always insist on a clause that if the deal does not close for any reason, the broker is not entitled to a commission," he said.

It is also important, he said, for listing agreements to include representations from the broker about how the property will be marketed — including how much advertising and what type will be done — and to include some standard of performance on the part of the broker.

"We generally try to include a clause that allows the seller to get out of the listing agreement if the broker is not producing any potential buyers," he said.

Additionally, Mr. Weinstein said, brokers who are going to use co-brokers to market a property should provide an indemnification from the listing broker for any commissions claimed by other brokers.

And finally, Mr. Weinstein said, though the "standard" listing agreement provides for a 6 percent commission, having a lawyer negotiate the agreement could result in a lower commission.

Frederick Peters, president of Warburg Realty Partnership, a Manhattan brokerage, said that since listing agreements are typically straightforward, the vast majority of sellers feel comfortable signing one without hiring a lawyer. "It basically comes down to the anxiety level of the seller," he said.

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September 8, 2004 The New York Observer Is the Million Dollar Apartment  Sale An Urban Legend? By Gabriel Sherman Over the past…... Read more >

September 8, 2004

The New York Observer

Is the Million Dollar Apartment 
Sale An Urban Legend?

By Gabriel Sherman

Over the past year, the major Manhattan real-estate brokerages have released a fusillade of market reports proclaiming that the "average" price of a Manhattan apartment broke $1 million for the first time in New York history.

Most recently the Corcoran Group, in its 2004 midyear report, stated that the average sales price for a Manhattan condo soared 38 percent over the same period in 2003, while co-ops rose 19 percent. The report was peppered with florid terms like "feverish," "soaring" and "intense demand."

The result: Today, the concept of the $1 million apartment—much like the $50 foie gras burger at DB Bistro Moderne and the $18 cross-town cab ride—has become an accepted fact of New York consumer culture.

But like the Internet bubble of the last decade, the escalating rhetoric about Manhattan real-estate values has some brokers and analysts worried: Is the Manhattan real-estate market a similar bubble, inflated with reports and analysis that are little more than hot air?

A series of interviews with brokers, brokerage heads and analysts conducted by The Observer suggests that most buyers in Manhattan are finding apartments for far less that $1 million. And several brokers and real-estate analysts, worried by the hypercharged publicity, are starting to promote a more sober outlook. Several suggested that the median price for Manhattan apartments—which represents the exact middle of the market, with an equal number of properties priced both above and below the median—may be a much better gauge of the market’s true value. That figure, as reported in the second quarter by Miller Samuel, an independent Manhattan appraisal and consulting firm, was $674,000—far below the $1.047 million reported as the average price in the same period.

"What’s so dangerous is all the averaging that gets touted by these reports," said Leonard Steinberg, a broker at Douglas Elliman who focuses on luxury properties. "There is no such thing as an ‘average’ New York apartment. What does ‘average’ really mean? You have ultimate luxury and more affordable properties. The middle of the road is beginning to disappear. And it’s the hype right now of this $1 million ‘average’ that concerns me. It’s the same bubble talk as when people said Yahoo would reach $350 a share."

Defining an exact average for the diverse real-estate market has always been a shaky proposition. Prices are indeed up now, and the current real-estate market—buoyed by Wall Street bonuses and the lowest interest rates in a generation—is one of the best in recent history. But according to the brokers and experts who tabulate the market statistics, never before have market reports burrowed their way so deeply into the collective psyche of Manhattan real-estate buyers, creating the potential for a hypertrophied market.

And the danger in overstating the market’s growth has in many ways been triggered by the public’s fascination with—and reliance on—the "average" $1 million price reported by the major brokerage houses, and eagerly repeated by the media as news.

Manhattan firms calculate the average apartment price by including every sale in a specified period. Yet the island’s dense residential mosaic and massive price spreads—$30 million triplexes sit only blocks from $300,000 studios—skew the average toward the upper end of the scale.

Indeed, the phalanx of luxury projects flooding the market in the past year—including 300 apartments in the $1.7 billion Time Warner Center, 120 apartments at Trump Park Avenue, and 170 apartments in the Trump Place building flanking the Hudson River west of Lincoln Center—have augmented the perception that the going rate for a Manhattan apartment hovers at $1 million or more. Throw in the celebrity flotsam clogging buildings like the Richard Meier towers on Perry Street—which adds to the media hype—and it’s no wonder the average Manhattan real-estate buyer in 2004 expects a condo to go for eight figures.

But a look behind the numbers presents a more nuanced picture.

Given that the apartments sold in any given quarter represent a mix of different properties, and that an epic sale—such as the $45 million penthouse at the Time Warner Center, which closed in July 2003—can pull the average price upwards, proclamations that average prices have risen significantly may just mean more luxury apartments are being sold, rather than an aggregate price increase for apartments in general.

"It’s always dangerous to take data for a particular quarter—one huge sale can skew it," said Frederick Peters, the president of Warburg Realty Partnership. "If the average condo seller thinks he can charge 50 percent more than one year ago, his condo will be on the market for a long, long time."

The spate of closings in Manhattan’s newest luxury buildings may have contributed to the rapid price growth in the past quarter—most prominently on the West Side, now home to the Time Warner Center and Donald Trump’s signature developments. In describing the torrid 42 percent growth on the West Side in the past quarter, the Corcoran Report attributed some of this growth to such "luxury properties."

"All these measurements are saying is that this group of sales are higher than another group of sales," said Michael Martin, the managing director for research and marketing at Mitchell, Maxwell and Jackson Inc., the largest privately held real-estate appraisal firm in New York and Connecticut. The firm provided the data for Corcoran’s report. "If you look at the market from quarter to quarter, you’ll have a shift of more expensive apartments to less expensive apartments. That will skew the average sale price. But to group them all together and give one universal figure as an indicator that the market is way up—that doesn’t give you an accurate picture. It’s more of a marketing tool than a useful gauge of what’s going in the market."

Jonathan Miller, the author of the Miller Samuel report, made a similar point: "If you hang your hat on one indicator, such as average sales price—which is a natural tendency for the public to do—you can be misled."

Market data is clouded further by the fact that New York City doesn’t subscribe to the multiple-listing system used in virtually ever other real-estate market in the country. With co-op sales often withheld from the public’s view, some brokers and experts argue that though data on real-estate sales are collected by managing agents and the brokerages’ individual listing systems, it is impossible to fully report how much, and when, a property was sold—and by extension, just how fast the market is rising. New York may be the last speculative real-estate market in the United States.

"In a perfect world, like the stock market, you would want every transaction accounted for," said Mr. Miller. On the Miller Samuel Web site, the firm acknowledges the limitations of reporting methodology: "Since the data is dependent on how well the brokerage firms manage their data, it can not be assured that the results are absolute," the firm states.

Brokers share this view.

"I would say the market is up maybe 10 percent this year—but not the 30-plus percent we see in the market reports," said one top broker at a major Manhattan firm.

Of course, applying an average price to the Manhattan real-estate market is nothing new. In 1981, Barbara Corcoran issued the first assessment of the Manhattan real-estate market—a move that has since become known as one of the industry’s most brilliant P.R. coups. With only 11 apartments in her study, Ms. Corcoran released the report to The New York Times, which subsequently published the findings. Many credit this as the birth of Manhattan’s real-estate-addled citizenry.

"I needed publicity, so I calculated the average price of all the apartments on my books—which was 11, although I didn’t mention that—and sent it to The New York Times," Ms. Corcoran told the Times of London in June, in an interview illustrating the marketing power of real-estate reports. "People started ringing me for comments, and all of a sudden everybody in the business knew who I was."

Since then, market reports have become increasingly potent marketing tools wielded by New York’s largest real-estate brokerage firms, eager to capitalize on consumer demand. Every major Manhattan brokerage now issues its own assessment of the market. Corcoran has a six-figure budget allocated to the Corcoran Report; the firm has a staff of three working on each document, including an in-house copywriter, and hires an outside creative agency to design the layout. Each print run totals nearly 300,000 copies, in addition to being linked on Corcoran’s Web site and promoted in press releases shuttled off to the media.

"Back before Barbara launched the Corcoran Report, no one talked about apartments," said Scott Durkin, chief operating officer of the Corcoran Group. "But now a market survey is something every important firm needs to have in their marketing efforts."

"Reports are definitely a publicity tool—I send it out because newspapers want it," said Dottie Herman, the chief executive of Prudential Douglas Elliman. "It’s what people want to know. I think people always like to read information—and today, there is a much greater awareness about real estate."

Others sound a more cautionary note. "You can skew the figures and statistics into a good marketing tool that has a vague relation to market conditions, but the reports in and of themselves are not an accurate tool," said Bruce Ehrmann, a broker with Stribling and Associates. "Every market report is somewhat artful."

All this comes at a time when the New York media has reinvigorated its real-estate coverage and found a readership hungry to know more about the latest gyrations in the Manhattan real-estate market.

As Mr. Trump put it ever so clearly: "New York is real estate, Texas is oil."

In the past two years, both the New York Post and The New York Times have revamped their real-estate sections with color photo spreads, sunny portraits of smiling New Yorkers recounting their successful apartment hunts, and continued coverage of the market’s unimpeded march upward. The Times even features its very own celebrity real-estate gossip column.

Trish Hall, who has been at The Times on and off for 17 years, has been editing the paper’s redesigned Sunday real-estate section since June.

While The Times has appeared enthusiastic and responsive to market reports issued by brokerages, Ms. Hall said, the paper is aware of their limitations: that the information on the market comes from brokerages with an interest in pumping up the market.

"It would be ideal if the reports were independent—if we didn’t have to factor in which brokerage is sponsoring which report," she said. "But that doesn’t exist. The reports may increase anxiety in the public; they can affect readers’ emotional tenor, perhaps. But they can’t create a market.

"One thing that happens is, when the first report gets released, everybody publicizes it," Ms. Hall added. "I would like to get to know the reports better, and how they compile their data."

When one factors in the importance of brokerage advertising for New York City’s newspapers, the relationship between the real-estate market and the media that reports on it becomes even more complex.

"Real-estate advertising makes up 9 percent of all The New York Times’ advertising revenue," said Times spokeswoman Catherine Mathis. She said The Times doesn’t release specific dollar amounts for advertising revenue.

"Real estate is definitely an important area of advertising," she continued. And that has fueled the paper’s expanded coverage of the market.

"We thought that both readers and advertisers would benefit from a redesigned and expanded real-estate section," Ms. Mathis said. "And we also expanded and enhanced our real-estate coverage on nytimes.com. The response from readers and advertisers has been positive. Anecdotally, in conversations with readers and advertisers, they have been enthusiastic."

But sometimes that enthusiasm doesn’t translate into close reading—a factor that Ms. Hall acknowledged.

"Clearly, you just want as much information about how the numbers are calculated," she said. "But that amount of information is not all going to be in the headline. To a certain extent, it depends on people reading the information."

The ever-tightening confluence of media and marketing has some in the real-estate industry worried that the reports are fueling unstable growth and playing off consumers’ mistaken notion that "average" means "typical."

"Averages are the wrong number to look at. The public loves averages, but people on the street don’t know what the media really means," said Paul Purcell, the former president of Douglas Elliman, who now runs the relocation and consulting firm Braddock and Purcell.

"I went on a television program recently and talked about the possibility of a bubble in the market," Mr. Purcell continued. "I was able to say that for the first time. I never could say things like that when I had a Douglas Elliman hat on. I had to listen to shareholders and my bosses on the one hand, and my brokers on the other hand. When I see something now, I can say it."

"The reports in the past couple of years have pushed buyers sitting on the fence, off the fence. They have stepped up to the plate and bought," Corcoran’s Mr. Durkin said. "If you examine the price increases in the past year, they have been a sounding bell to get on the bus."

"Obviously, [these reports] drive the market forward," said Michele Kleier, the president of Gumley Haft Kleier, an independent firm on the Upper East Side. "If an apartment sold for $1 million two months ago, anything new that comes on—after reading the latest reports—now comes on at a higher level than they would have. A lot of people wait to see before they price."

"The reports are boosting the anxiety and people’s desire to buy," said Michael Shvo, an Elliman broker who has sold 30 apartments in the Time Warner Center. "There are definitely people influenced by the reports. They say, ‘I’m missing on the market and want to buy now, and I’m missing on my chance.’ You have to educate them a lot."

All of these complicating factors have yet to be absorbed by New York’s real-estate-obsessed populace, which after being battered by Wall Street, has now taken to the gospel of the Manhattan real-estate market.

"The public has become attached to the idea of the $1 million apartment. It lends a certain cachet to the Manhattan buyer," Mr. Durkin of the Corcoran Group said. "Overall, people start wearing the price on their shoulders. They think of themselves as million-dollar buyers."

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New York Magazine June 28, 2004 NO WAY IN By Kate Pickert and Deborah Schoeneman, Edited by Christopher Bonanos When Tristan Harper of Douglas Elliman applied to a co-op board on East 108th Street on…... Read more >

New York Magazine

June 28, 2004

NO WAY IN

By Kate Pickert and Deborah Schoeneman, Edited by Christopher Bonanos

When Tristan Harper of Douglas Elliman applied to a co-op board on East 108th Street on behalf of a Sloan Kettering doctor and her engineer husband, he felt confident of a quick okay. The newlyweds had been approved for a mortgage on the $655,000 three-bedroom, and had the downpayment plus glowing recommendations. But they also had a pair of homes-bought before they met-and the board rejected their application. “Some of the board members were concerned because they thought my people were buying as an investment,” says Harper. “But they were buying this apartment to live in.” (for the record, they were eventually approved.)

A board north of 96th Street would never have been so demanding in the past, says Harper. But since the boards around town had already been ratcheting their pickiness meters before the current boom-mostly to ferret out overextended buyers lured into the market by low interest rates-Park Avenue exclusivity has been cropping up even in rather ordinary buildings. “More turndowns that any year I can remember,” says Warburg Realty Partnership’s Frederick Peters. “So now, in addition to being blamed in every bidding war, there’s a whole new category of things that the broker is at fault for.”

As JoAnne Kennedy, COO of Coldwell Banker Hunt Kennedy, explains, “Every time the market gets as hot as it is-and it’s blazing now-boards feel that if a candidate isn’t exactly what they’re looking for, there are three more behind them.” Even for lower priced properties: A Gumley Haft Kleier broker recently had a deal for a $275,000 co-op in the East Seventies, and the board requested a guarantor and three year’s maintenance in escrow. “That’s unbelievable!” says Michele Kleier, the firm’s president. “A lot of buildings think that it is an instant elevation in their status.” Her company also brokered the sale of a studio at 440 East 56th Street to Four Seasons partner Julian Niccolini, after at least two other people were turned down for the same apartment. “It’s not a bad building, but it’s not 740 Park Avenue,” says Kleier. (A representative of the board did not return calls for comment.) “They were looking for a prestigious person.”

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The New York Carib News June 16-22, 2004 WARBURG REALTY PARTNERSHIP TO ESTABLISH MAJOR HARLEM OFFICE New York, NY – Warburg Realty Partnership one of New York City’s oldest and most respected luxury…... Read more >

The New York Carib News

June 16-22, 2004

WARBURG REALTY PARTNERSHIP TO ESTABLISH MAJOR HARLEM OFFICE

New York, NY – Warburg Realty Partnership one of New York City’s oldest and most respected luxury residential brokerage firms, announced it will open a Harlem office this fall. This will make Warburg the first major brokerage to open a neighborhood office offering a full-time, dedicated and knowledgeable sales force to the Harlem community. In recognition of the neighborhood’s current renaissance, Warburg intends to provide Harlem residents, including the newly arrived, with the best possible service.

Frederick W. Peters, the company’s President said, “Warburg is committed to bringing to Harlem’s residents the same first hand, intimate knowledge and full suite of services which it has provided to Manhattan’s other luxury neighborhoods since 1896.”

Warburg’s core philosophy – providing extraordinary service and forging strong relationships between the company’s professionals and the clients and the community in which they work – sets the firm apart from competitors and warrants its impeccable reputation. As Warburg prepares to open its newest office, the firm stands ready to offer the same ideals and dedication to the Harlem community.

“In opening an office in Harlem, I want to celebrate both the community’s extraordinary heritage and Warburg’s ongoing investment in Manhattan’s unique neighborhoods. My family has lived and worked here since the middle of the 19th century, so I have the lifelong New Yorker’s love for and belief in the excitement and diversity of our city,” Mr. Peters explained.

The Harlem office will be managed by Christopher Halliburton, a native New Yorker with a long family history of involvement, both politically and economically, in and around the Harlem community. Since 1982, Mr. Halliburton has been involved in buying and selling real estate in the area, and now specializes in residential and commercial property sales. “In the Harlem office, we intend to fully represent the buy-side as well as the sell-side. We want everyone to win,” commented Halliburton. As one of the top sales brokers in the community, he is a natural to lead the office.

“Chris’s reputation in the industry is impeccable, he was our first choice to lead Warburg’s Harlem venture,” said Mr. Peters. “He represents the best qualities of a Warburg professional – an interactive, modern-thinking broker who provides our time-honored trademark of personalized service.”

“In a time when brokerage consolidations are the norm, these ideals enable Warburg to not only compete, but flourish in Manhattan’s luxury market,” commented Mr. Peters. “As the number of luxury firms diminishes, our highly personalized service and ongoing modernization efforts, will undoubtly serve us and the communities we serve – such as Harlem – as well in the upcoming century, as it did in the last.”

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THE REAL DEAL June 2004 Warburg Adds Office Warburg Realty Partnership will open a Harlem office this summer. The office, which will be Warburg’s third in Manhattan, will be located on the ground floor…... Read more >

THE REAL DEAL

June 2004

Warburg Adds Office

Warburg Realty Partnership will open a Harlem office this summer. The office, which will be Warburg’s third in Manhattan, will be located on the ground floor of a new middle-income co-op development at 2235 Frederick Douglas Blvd., between 120th and 121st streets.

Former Corcoran Group broker Christopher Halliburton will manage the 2,400 square foot site, which is slated to open in August and plans to ultimately operate with 25 brokers.

Halliburton has bought and sold real estate in the area since 1982, and specializes in residential and commercial property sales.

“In the Harlem office, we intend to fully represent the buy-side as well as the sale-side,” said Halliburton. “We want everyone to win.”

“Warburg is committed to bringing Harlem residents the same first-hand, intimate knowledge and full suite of services which it has provided to Manhattan’s other luxury neighborhoods since 1896,” said Warburg president Frederick W. Peters.

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The New York Times June 6, 2004 YES, YOU CAN FIND BARGAINS IN MANHATTAN By Tracie Rozhon Apartment hunters scanning the classified ads last weekend might have come     across a studio…... Read more >

The New York Times

June 6, 2004

YES, YOU CAN FIND
BARGAINS IN MANHATTAN

By Tracie Rozhon

Apartment hunters scanning the classified ads last weekend might have come     across a studio apartment in Greenwich Village offered for $695,000. The little condominium was described as being in triple mint condition, with three closets. A few inches away, another ad trumpeted a one-bedroom loft in the East Village for $1.25 million. In SoHo, on Wooster Street, an "extraordinary penthouse" could be had for $8.5 million.

Even with sticker-shock prices and the accompanying buy-it-now-before-the-mortgage-rates-go-up sales pitches, the prices realized for Manhattan's apartments keep inching up. Over the last several years, industry experts had predicted an imminent burst to the bubble, yet the ticket on the average apartment — within the triangle from Battery Park to West 116th Street to East 96th Street — just hit $998,905. Statisticians say record prices keep sailing in.

So are there any bargains left in Manhattan? "There aren't any cheap apartments, if that's what you mean," said Jean Kingman, who owns her own real estate business in Chelsea. "But there are bargains, yes. The trick is to recognize them."

At the Corcoran Group, Pamela Liebman, the chief executive, pointed to a parlor-floor one-bedroom in the best part of the Upper West Side, for $320,000. The co-op, which has a wood-burning fireplace and a bay window overlooking West End Avenue near 90th Street, went on the market last week. "Five years ago, this apartment would have been significantly cheaper — maybe half the price — but now it's a great deal," Ms. Liebman said. In general, "a savvy buyer can find something when others won't: a wreck, a lower floor or a back apartment in a top building can be great opportunities," she added.

In today's market, bargains are relative, said Frederick W. Peters, the president of Warburg Realty Partnership. "In the current Manhattan environment, a 12-room apartment for $3.9 million is a bargain — and you have to agree that's kind of funny! But that's reality in this environment. That's a bargain." And while a bargain is clearly in the eye (and pocketbook) of the bargainer, visits to dozens of intriguingly priced apartments did manage to turn up some real deals — most of them, surprisingly, outside the "pioneering" neighborhoods. Much of Harlem seems overpriced; a promising-sounding town house at the corner of Manhattan Avenue and East 116th Street currently for sale at $875,000 needed at least that much in renovations. Forget Avenue A; some of the Lower East Side prices are almost as high as Park Avenue. And in the Castle Village complex in Washington Heights, a two-bedroom just sold for more than $800,000 in a bidding war.

While deals are scattered throughout the city, the desperate apartment shopper should probably head first for the famously tony Upper East Side and, yes, even Sutton Place. Sometimes, the apartments for sale are gorgeous, with caterer friendly kitchens equipped with Aga and Sub-Zero appliances. But they cost less than they otherwise might because they are a little farther east than is chic for family-sized living quarters right now. Or the apartments need work. Or the owner has been transferred to Rome. Or a host of other things.

Right now, there is a 1,600-square-foot first floor maisonette for sale in one of Manhattan's fanciest buildings at 131 East 66th — Blaine and Robert Trump own an apartment here, shoulder-to-shoulder with a tenant roster right out of the Social Register. The apartment is $875,000.
Incredible? Impossible?

Yet there are two major problems with this rambling co-op — both of them surmountable by the right person. First, the place is a total wreck; once a doctor's office, the space is a rabbit warren of little rooms that will not be cheap to organize into a coherent living space. Second — and perhaps most significantly — the co-op board is likely to be demanding of the buyers. For an apartment like this one, the board might want to see significant liquid assets — and references from only the nicest people. Now if you had that much money and that many connections, why would you want to live on the first floor, and fix up a wreck?

Because it's a bargain! And it has its own entrance, a pilastered front door on Lexington Avenue — how many of those are there? And you can always send your guests past the uniformed doorman in the discreetly huge lobby where the elevators have the most beautiful wrought iron, saving the street entrance for your family. [For more about the building, see the Streetscapes column, page 10.]

Many of the apartments touted as bargains had just come back on the market, after a co-op board's turndown, and while the East Side boards are thought to be tougher, rejections can happen anywhere. If the owners of an apartment, like several of those seen last week, have gone through several board turndowns, they may be open to negotiation. It sounds a bit cutthroat, but find out if the seller has already bought another home, or has had any recent financial setbacks.

The owner of a big, 1,400-square-foot two-bedroom co-op at 36 Sutton Place — which sounded like a bargain at $750,000 — was too disgusted by two board turndowns to show it to a reporter, explained Lucy Fielding, the Warburg agent with the listing. "But maybe tomorrow he'll feel differently," she said brightly. (He didn't.)

As a substitute, Ms. Fielding showed a Classic Six — formal dining room, two bedrooms and a maid's room, plus living room and kitchen — in Astor Court, a 1915 apartment house at 205 West 89th Street, listed at $1.695 million. (Why don't people just say $1.7 million?) The owners want to stay in the same building, but are downsizing to a one-bedroom and have priced the apartment — which, to be honest, needs freshening up — several hundred thousand dollars less than similar apartments, the agent said.

One of the most beautiful apartments seen last week was at 447 East 57th Street, near Sutton Place, a building designed by Rosario Candela, whom many consider the quintessential 1920's apartment house architect. The 12-room apartment took up a whole floor of the elegant prewar doorman building; the 27-foot living room with the sumptuous down-filled couches and antique rugs had a fireplace; so did the corner study. Behind the huge kitchen — where a cook in her crisp white apron scrubbed the counters — were three maid's rooms, each as large as a studio apartment. There are five bathrooms, scattered among the 4,000-square-foot co-op.

Apartment seekers can grab it for $3.995 million. If that sounds a trifle pricey, Harriet Kaufman, a Warburg agent, convincingly pointed to five others, several smaller with less perfect layouts up in Carnegie Hill and along Park Avenue that went for at least $1 million more, because of their location. Then there is the huge "handyman special" duplex at 860 United Nations Plaza. Since the 1970's, agents have been using the word "duplex" indiscriminately; it seems any bad town-house conversion, with a rickety metal spiral staircase and a tiny bedroom above, is called a duplex. But this is a real duplex: 3,000 square feet on two floors with truly Trumpian views from a sea of glass overlooking the Queensboro Bridge. (No, it is not a Trump building.)

In some people's view, this is not a real wreck; it is just in "estate condition" — it's probably the same exact kitchen that came with the place when the building was built in the 60's. A few might restore it, though most would rip it out. But this is a duplex with a regular wooden staircase — and its own little elevator — all for $2.8 million. If it were in newly restored condition, the agent argued, it would be $3.9 million, like a similar one a few floors up.

All these high prices should not dissuade first-time apartment buyers. Brown Harris Stevens, the whitest of white glove agencies, is selling a spacious fourth floor apartment overlooking the East River at 530 East 90th Street for $449,000.

What was once a formal dining room has been converted to a second bedroom and an entrance foyer 9 feet 6 inches by 11 feet that could be used as a dining foyer, with room for a handful of small round tables for a party. In today's market, that kind of space, in a prewar doorman building overlooking the river, next door to a health club, could easily be considered a bargain.

Sometimes an apartment is in good condition, but the sellers' belongings make it difficult for buyers to envision their own possessions inside. In another one-bedroom on East 85th Street, offered for $379,000, the owner asked if there was anything she could do to make it sell faster. "Take out some of the clutter," the agent replied, gesturing toward the paintings and plaques on the walls, and all the pillows on the couches. "No," she replied. "I don't want to do that — these are my things. Where would I put them?" The agent shrugged.

Another rule for finding bargains: the farther east you go, the better the chances. As lovely as Carl Schurz Park and Gracie Mansion are, apartments near them don't fetch as much — they're a long walk to the subway, and the crosstown buses never seem to arrive. Bargains can also be found down on Grand Street, at the Franklin D. Roosevelt Drive, in a complex at the river.

The best deals, however, aren't all near the East River. A two-bedroom condominium on West 16th between Sixth and Seventh Avenues in Chelsea was priced at $549,000. Why so cheap? The agent said the owner, a lawyer who is moving out of the country, insisted on keeping the price below market for a fast deal. (It worked — the apartment went into contract 10 days ago.) Another deal was for a one-bedroom loft with even higher ceilings in Midtown, a half block from the Sixth Avenue subway, with one of the most spectacular views of all, for only $355,000 — a steal these days.

This one-bedroom loft, at 32 West 40th Street, between Fifth and Sixth Avenues, has huge picture windows looking down over Bryant Park and its wonderfully faded red umbrellas and greenery, and, to anchor it all, the small but elaborate stone maintenance building at the lower right of the window frame. Part of the charm is the lobby; a doorman presides over what the agent, Timothy Scott of Corcoran, calls "our Gone with the Wind" staircase, a twisting marble concoction. Visitors take the elevator, or the stairs, to the second floor.

Mr. Scott said there was a board turndown; a few weeks ago he seemed nervous about the way the loft showed. It had been used last for an office, although it is strictly a residential space, and a few desks sat cater-corner in the large sunken living room, with telephone books piled next to computer screens. Just a few days ago, the owner refinished the floors and painted the walls white. But the kitchen and bathroom are small, and still look dreary; the bedroom has ample closets — so ample it would be tempting to rip them out and enlarge the room by about five feet. (After all, there is storage in the basement.) For more of a loft feeling, the buyer might want to cut a big door through the long wall between bedroom and living room, to make the 600-square-foot space seem even bigger.

Then there are those apartments that, even taking into consideration the location and the condition, appear to be plain good deals, like the three-bedroom apartment for $239,000 in the heart of Washington Heights, on 180th Street near Broadway. (Take the A Train to 181st Street.)

The owner, Kent Gubrud, 45, a lawyer, just wants to get rid of the place. He and his wife, LaVina Gubrud, an opera singer, have bought a house in Pennsylvania, where they want to raise their son, Devon, 2. The owner likes the new door moldings in natural finish; others might not, but why argue? The monthly maintenance is only $459.

But before you pick up your cell phones and whip out your checkbooks, this bargain, too, has a catch. More than half the tenants in the building are renters, so Mr. Gubrud said it will be hard, if not impossible, to obtain a mortgage.

In other words, this is what real estate agents call an All Cash Deal.

Copyright 2004  The New York Times Company

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REAL ESTATE WEEKLY June 2, 2004 MOVING ON UP Warburg Realty Partnership announced that it will open a Harlem office this summer. According to Frederick W. Peters, the company’s president, “Warburg…... Read more >

REAL ESTATE WEEKLY

June 2, 2004

MOVING ON UP

Warburg Realty Partnership announced that it will open a Harlem office this summer.

According to Frederick W. Peters, the company’s president, “Warburg is committed to bringing to Harlem’s residents the same first hand, intimate knowledge and full suite of services which it has provided to Manhattan’s other luxury neighborhoods since 1896.”

The Harlem office will be managed by Christopher Halliburton, a native New Yorker with a long family history of involvement in the Harlem community.

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DEVELOPMENT NEW YORK June 2004 WARBURG REALTY PARTNERSHIP TO ESTABLISH MAJOR HARLEM OFFICE First Luxury Residential Brokerage To Have Dedicated, Formidable Presence In Exciting Harlem Market Warburg Realty…... Read more >

DEVELOPMENT NEW YORK

June 2004

WARBURG REALTY PARTNERSHIP TO ESTABLISH MAJOR HARLEM OFFICE
First Luxury Residential Brokerage To Have Dedicated, Formidable Presence In Exciting Harlem Market

Warburg Realty Partnership, one of New York City’s oldest and most respected luxury residential brokerage firms, recently announced it will open a Harlem office. Warburg is the first major brokerage to open a neighborhood office offering a full-time, dedicated and knowledgeable sales force to the Harlem community. In recognition of the neighborhood’s current renaissance, Warburg intends to provide its residents new and old with the best possible service.

Frederick W. Peters, the company’s president said, “Warburg is committed to bringing to Harlem’s residents the same first hand, intimate knowledge and full suite of services which it has provided to Manhattan’s other luxury neighborhoods since 1896.”

Warburg’s core philosophy –- providing services and forging strong relationships between the company’s professionals and the clients and community in which they work – sets the firm apart from competitors and warrants its impeccable reputation. As Warburg prepares to open its newest office, the firm stands ready to offer the same ideals and dedication to the Harlem community.

“In opening an office in Harlem, I want to celebrate both the community’s extraordinary heritage and Warburg’s ongoing investment in Manhattan’s unique neighborhoods. My family has lived and worked here since the middle of the 19th century, so I have the lifelong New Yorker’s love for and belief in the excitement and diversity of our city,” Mr. Peters explained.

The Harlem office will be managed by Christopher Halliburton, a native New Yorker with a long family history of involvement, both politically and economically, in and around the Harlem community. Since 1982 Mr. Halliburton has been involved in buying and selling real estate in the area and now specializes in residential and commercial property sales. “In the Harlem office, we intend to fully represent the buy-side as well as the sales-side. We want everyone to win,” commented Mr. Halliburton. As one of the top sales brokers in the community, he is a natural to lead the new office.

“Chris’ reputation in the industry is impeccable, he was our first choice to lead Warburg’s Harlem venture,” said Mr. Peters. “He represents the best qualities of a Warburg professional – an interactive, modern-thinking broker who provides our time-honored trademark of personalized service.”

“In a time where brokerage consolidations are the norm, these ideals enable Warburg to not only compete, but flourish in Manhattan’s luxury market,” commented Mr. Peters. “As the number of luxury firms diminishes, our highly personalized service and ongoing modernization efforts, will undoubtedly serve us and the communities we serve – such as Harlem – as well in the upcoming century, as it did in the last.”

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NEW YORK LIVING June/July, 2004 WARBURG REALTY TO OPEN OFFICE IN HARLEM To better serve both buyers and sellers during the neighborhood’s renaissance, Warburg will open a Harlem office this fall. Frederick…... Read more >

NEW YORK LIVING

June/July, 2004

WARBURG REALTY TO OPEN OFFICE IN HARLEM

To better serve both buyers and sellers
during the neighborhood’s renaissance, Warburg will open a Harlem office this fall.

Frederick W. Peters, the company’s president said, “Warburg is committed to bringing to Harlem’s residents the same first hand, intimate knowledge and full suite of services which it has provided to Manhattan’s other luxury neighborhoods since 1896.”

Warburg is one of the city’s oldest luxury residential brokerage firms, with a core philosophy of providing services and forging strong relationships between the company’s professionals and the clients and community in which they work.

The Harlem office will be managed by Christopher Halliburton, a native New Yorker with a long family history of involvement, both politically and economically, in and around the Harlem community. Halliburton has been buying and selling in the area since 1982, and specializes in residential and commercial property sales.

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The New York Times April 22, 2004 BETTING ON RENT OVER MORTGAGES By: Mitoko Rich Average sales prices for apartments in parts of Manhattan now breach $1 million. Bidding wars are erupting over even the…... Read more >

The New York Times

April 22, 2004

BETTING ON RENT OVER MORTGAGES

By: Mitoko Rich

Average sales prices for apartments in parts of Manhattan now breach $1 million. Bidding wars are erupting over even the most modest of them. So what are would-be buyers doing? They have decided to throw in the towel and forgo a mortgage for a landlord. For Larry Wiesler and Randy Federgreen, it was a one-bedroom condo sale in the Flatirondistrict that finally made them snap. Though the condo was in a modern building with a gym, it was small, with very little closet space.  More to the point, the price did not make sense to them.  After putting in a $675,000 bid, they chose to rent instead and withdrew their offer.  Though they had sold an apartment in Greenwich Village for $1.5 million, they decided to pull out of the frenzied sales market. "It felt like there was a lot of psychological hype around the `you've got to buy it now' mentality," Mr. Wiesler said. "We found ourselves caught up in the same momentum as everyone else."

Last month, they moved into a one-bedroom penthouse on West 55th Street, with 14-foot ceilings, great light and a Hudson River view. Instead of a contract, they signed a lease, with a monthly payment of just under $3,000.

"A lot of buyers at any price range are having frustrations finding product available at the price they want to pay, so they're turning to the rental market," said Stephen Kotler, a broker with Douglas Elliman, the Manhattan real estate firm.

Mr. Kotler said that between 15 and 20 percent of his clients have abandoned the idea of buying an apartment for now and have decided to rent. That compares with about 10 percent of his clients a year ago.

According to Andrew Heiberger, president of Citi Habitats, a Manhattan brokerage firm, 15 percent of the apartments his firm rented in the first quarter went to what he describes as "frustrated buyers." That is up from just 5 percent a year ago.

The increased demand is, in turn, fueling modest price increases in the rental market, where monthly rates are creeping up and vacancy rates are slipping, slowly reversing a nearly three-year trend.
Though still far below the peaks of early 2001, the average rent on a one-bedroom apartment below 100th Street in Manhattan has increased 3 percent to $2,333 from $2,268 in April of last year, Mr. Heiberger said. A three-bedroom apartment averages $4,795, up from $4,605 last April. Vacancy rates have meanwhile slipped from 2.35 percent last April to 1.76 percent now.

In some neighborhoods, would-be renters are starting to have trouble finding what they want. Scott Stewart, a rental specialist with the Corcoran Group, has a list of families eager to rent three bedrooms on the Upper East or Upper West Side. In some cases they have sold apartments, figuring the market has peaked.

But, Mr. Stewart said, there are only six or seven apartments in these markets with rents of $10,000 to $15,000, compared with 25 or more just a year ago. As more high-end buyers have entered the rental market, the inventory of available apartments has started to shrink.

Even at the lower end, landlords are trying to push through rent increases and to withdraw sweeteners for tenants.

Lee Ryback, controller of the Kibel Companies, which owns five buildings in Manhattan, said his company planned to require tenants to pay broker commissions again. Kibel covered the fees after 9/11, but with vacancies down, he said, "we're going to see if we can go back to the old days."

David Wine, vice chairman of the Related Companies, which owns more than 6,500 apartments in Manhattan, said his company was being "much more selective about offering concessions than six months ago or a year ago."

The rise in rents does not yet compare to the pace of increases in the sales market. According to the Douglas Elliman Manhattan Market Overview, a quarterly report, first-quarter average sales prices in Manhattan below 112th Street on the West Side and below 96th Street on the East Side have risen more than 28 percent over the same period last year.

In Brooklyn Heights, where price increases have been nearly as extreme, rents can still appear fairly attractive. A $600,000 two-bedroom apartment in Brooklyn Heights, for example, could run a buyer about $3,000 to $4,000 a month, including maintenance payments, even assuming low interest rates and a hefty down payment, noted Christopher Thomas, president of William B. May Brooklyn. An equivalent rental in the neighborhood, he said, now runs about $2,500.

Those who have rent-stabilized apartments have even less motivation to buy. "At the end of the day, people think, I have to give up this amazing view of the park or this great three bedroom that I pay a nickel for and jump into the sales market and get less for a lot of money," said Brian Lewis, a broker with Halstead, who helped Mr. Wiesler and Mr. Federgreen sell their Greenwich Village apartment.

In addition to skyrocketing prices, the contraction in the number of apartments available for sale has been so severe that prospective owners feel they would have to make too many compromises in location and amenities simply to get into the market. "Even people for whom money is not the only issue are becoming incredibly frustrated by the fact that you can't find what you want," said Frederick W. Peters, president of Warburg Realty in New York.

Indeed, Kathryn Steinberg, a broker at Edward Lee Cave in Manhattan, said that she is suddenly finding herself helping some of her wealthiest clients to rent. "This is a brand new way of thinking for them," she said. In one case, she helped a couple with two children sell an apartment in an Upper East Side town house for $3 million. They had hoped to buy a larger apartment or a town house, but quickly discovered that in their price range — $4 million — "the good ones don't exist anymore," Ms. Steinberg said. So they ended up signing a two-year lease — for around $20,000 a month.

"The prices for anything nice are inflated, and it just doesn't make sense to buy," she said.

What does make sense is to sell. Property owners with seller's lust "want to sell at today's prices," said Louise Phillips Forbes, a broker with Halstead. She helped one couple sell a two-bedroom apartment on Park Avenue South for $1.6 million, $100,000 above their asking price. Now they want to rent.

Buyers of much more modest means are caught in the same currents. Avi Shalem, 38 and recently divorced, wants to sell his two-bedroom house in Forest Hills, Queens, and buy a one-bedroom bachelor pad in Manhattan. At first, he thought $500,000 would get him something decent. His broker, Bill Billitzer of Douglas Elliman, showed him nearly 20 apartments from Washington Heights down to the East Village. "I just wasn't finding what I wanted," Mr. Shalem said. "I was dismayed that there's no room for downward negotiation in Manhattan."

So now he is competing for a decent rental — at a time when rental prices are also ticking up.
Mr. Shalem said he was no longer surprised by the vagaries of the Manhattan real estate scene. After only a brief foray, he said, "I'm jaded."

Copyright 2004  The New York Times Company

 

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The Real Deal March 15, 2004 LOW INVENTORY PERSISTS, THOUGH RENTALS REBOUNDING Condo and co-op inventory continued to drop in Manhattan in February, creating bidding wars, disgruntled buyers and stressed…... Read more >

The Real Deal

March 15, 2004

LOW INVENTORY PERSISTS, THOUGH RENTALS REBOUNDING

Condo and co-op inventory continued to drop in Manhattan in February, creating bidding wars, disgruntled buyers and stressed brokers, but possibly helping the rental market.
 
Corcoran released a report early last month saying that inventory of properties for sale is down 50 percent compared to a year ago, according to data from its house listing system.

Warburg Realty president Frederick Peters also painted a grim picture of listings in mid-February.  "By our own calculations, we have 63 percent the number of active exclusives as we had a year ago," Peters said. "It's not because brokers forgot how to sell real estate. There is just no inventory."
 
According to Jonathan Miller, president of the appraisal firm Miller Samuel, the number of condos and co-ops for sale in Manhattan dropped 11 percent between the end of the fourth quarter and the end of January. There were 4,321 properties listed at the end of the January, compared to 4,843 at the end of the fourth quarter.

"Everything is going to some form of competitive bidding," said Peters. "Every good property is mobbed."
Daren Hornig, president and CEO of Dwelling Quest, said buyers are now forced more than ever to act quickly, and Peters said many were growing disgruntled.
 
"Anyone buying now has usually been burnt one to 10 times before, so they are often afraid miss a deal," said Hornig.

"A year ago it was sellers who were disgusted," said Peters. "Now, it's moving into buyers being disgruntled."  The low inventory is also making brokers "a lot more stressed," Peters said.

Things got heated recently over sales at a new project at 505 Greenwich Street, when Elliman broker Michael Schvo and Christopher Mathieson, managing partner at J.C. DeNiro, accused Corcoran of blocking them from showing its exclusive listings at the new development. Mathieson also said Corcoran refused to sell him an apartment in the building solely because he was a realtor.
 
Corcoran said the allegations were false and exaggerated. CEO Pam Liebman pointed out that it is customary to first offer apartments on a "priority list" created by the developer, and REBNY officials pointed out that the 72-hour rule doesn't apply to properties on the market for the first time.
 
Corcoran also filed a complaint against Mathieson with the ethics committee of the REBNY, which Mathieson acknowledged receiving. Neither side commented on the details of the complaint.
 
The shortage of sales inventory has had the effect of helping the rental market, according to Andrew Heiberger, CEO of Citi Habitats.

"The rental market is 100 percent coming back on all fronts," said Heiberger. "When the condo market goes crazy, people priced out of the market have to rent."
 
Heiberger said vacancies in the rental market, which had reached as high as 5 percent in the last two years, had been hovering around 3.7 percent for while, and were now down to around 2 percent.
Gary Kiyan, listings and systems manager for DJ Knight, said the rental market was improving, but that "it isn't as if anyone flipped a switch"

"I'm encouraged by some of the things I'm seeing," he said. "We're seeing more activity."

But he said he was concerned that there are still alot of new rental developments coming online soon.
Heiberger said the improved situation means owners are starting to remove incentives for renters. "That's the first thing peeling away," he said.

Hornig of Dwelling Quest said owners were becoming less likely to pay commission to brokers, which happens in a weak market.

"A lot of them are paying a month's commission, but they are pulling back," Hornig said.

Copyright 2004 The Real Deal
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New York Observer Front Page February 23, 2004 WOODY ALLEN NIXES A $23 MILLION BID AS MARKET SOARS By Gabriel Sherman    Last September, when Woody Allen placed his 40-foot-wide Georgian townhouse…... Read more >

New York Observer
Front Page

February 23, 2004

WOODY ALLEN NIXES A $23 MILLION BID AS MARKET SOARS

By Gabriel Sherman

   Last September, when Woody Allen placed his 40-foot-wide Georgian townhouse on the market for $27 million, Manhattan brokers balked at the stratospheric sum he demanded for his lavish Carnegie Hill residence; a New York Post headline screamed "BANANAS!" But in the past two months, Mr. Allen has turned down two successive offers -- for $23 million and $20 million, respectively -- on the 22-room mansion on East 92nd Street that he shares with his wife, Soon-Yi, according to a real-estate source familiar with the property.

   After nearly three years of declining prices at the highest echelons of Manhattan real estate, Mr. Allen's resolve to get top dollar is a sign of the rapid change in the luxury market since the end of 2003. The number of apartments and townhouses now for sale in Manhattan's toniest corridors -- West End Avenue and Riverside Drive, Central Park West, Fifth and Park avenues from 59th Street to 96th Street -- have plummeted to record lows, causing prices to quickly skyrocket again. In the space of a few weeks at the beginning of this year, the volatile market is once again dominated by sellers able to command record prices.

   Mr. Allen didn't return calls for comment about his efforts to unload his ornate double-wide limestone mansion. Alice F. Mason, of the exclusive, eponymous Upper East Side brokerage, who is representing Mr. Allen's property, didn't return calls for comment.

   But to those who make their living developing or selling places as lavish as Mr. Allen's, the signs are unmistakable.

   "The market is the best I have seen it in years. The best market was the year before 9-11, and this market blows that away," said Donald Trump, the star of NBC's reality hit The Apprentice, whose Upper East Side development at Park Avenue and 59th Street is now more than 50 percent sold after opening for sales in November. "I see prices going up, there is just very little good product available. There is a lot of mediocre product available -- product that tries to be good. But it's not good," he said.

   Buildings that once reliably provided options for well-heeled Manhattan house-hunters are hanging out the "No Vacancies" shingle. On Fifth Avenue, there are no listings at Nos. 1020, 998, 960, 834 or 820. On Park Avenue, the same crunch prevails, with no listings at Nos. 812, 775, 770, 765 or 660.

   Statistics from a market report issued in February by the Corcoran Group showed that available listings at the start of 2004 had plummeted by 50 percent compared to the same period in 2003.

   "We're seeing an uptick in our open-house attendance, and we're practically bursting at the seams with buyers. There aren't enough listings to accommodate them," said Scott Durkin, the chief operating officer of the Corcoran Group.

   Of course, it's always in a brokerage's interest to indicate a skyrocketing market. But while Corcoran issued the most optimistic numbers, which some real-estate experts contend overstate the inventory crunch, other firms show a similar drop in listings. A report issued by Miller Samuel Inc., an independent Manhattan real-estate appraisal firm, compared available inventory in the luxury market in January of 2003 to the same month in 2004 and found a 29 percent drop in the number of listings. In the fourth quarter of 2003 alone, the report showed, available listings decreased 19 percent.

   "The record prices are really telling," said Jonathan Miller, the president of Miller Samuel, who issued the report. "We're in a sellers' market, and the lack of available apartments just makes it more of a sellers' market."

   Properties are selling faster, too. According to Mr. Miller, in 2003, the average Manhattan listing in the overall market sat for a period 11.9 percent shorter than the year before; and rapidly selling properties, the report found, are closing at asking prices or above.

   Between 2002 and 2003, the average discount below asking price dropped by nearly 50 percent, and today, the average apartment in the whole market is selling for only 2.9 percent below the asking price. Bidding wars, so familiar during Manhattan's dot-com bubble, have once again become common practice for those desperate to buy.

   The current stampede to buy luxury properties on the Upper East Side and West Side of Manhattan finally signifies that in moneyed circles, New York has shrugged off the last vestiges of the Sept. 11 economic slumber that shuttered the last real-estate boom in 2000. On the afternoon of Feb. 17, the Dow surged more than 100 points and closed at a 32-month high, nearing the 11,000 mark. In 2003, Wall Street doled out more than $10 billion in bonuses to employees, who in turn made sure there was always a crush at the latest trophy apartment to hit the open-house circuit.

   "There is no question about the arc of the last year. We've gone from a flood of inventory, with a relative scarcity of available buyers ready and willing to purchase, to a flood of buyers and a relative scarcity of attractive inventory," said Frederick Peters, the president of Warburg Realty Partnership, a firm with 85 brokers. "It's been a fairly astonishing transition in what is, historically speaking, a short period of time."

   Given the improved selling conditions, will Mr. Allen's confidence prompt other trophy homeowners to once again lob their stratospherically priced mansions on the market? The stakes involved in Mr. Allen's success are high, given that a serious line-up of potential sellers remain who are all watching what happens with his property. In 2003, Seagram heir Edgar Bronfman Jr. took his $40 million townhouse on East 64th Street off the market, as did hotelier Ian Schrager, who pulled his $15.9 million co-op on Central Park West out of the luxury-property pool. Other dropouts in 2003 included Dustin Hoffman's $25 million triplex co-op on Central Park West; fellow Seagram clan member Matthew Bronfman's $27 million townhouse on East 67th Street; and art dealer Guy Wildenstein, who failed to nab $35 million for his limestone mansion, which sits next to the Bronfman estate at 11-13 East 64th Street. Whether these gilded residences return to the market will shape Manhattan luxury real estate in 2004.

Copyright 2004 The New York Observer, L.P.

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The New York Times Metro Section February 20, 2004 PRESTIGIOUS CO-OPS NEARING PRICE PEAKS OF 4 YEARS AGO By Josh Barbanel    Amid a surge of interest from Wall Street buyers, the price of a…... Read more >

The New York Times
Metro Section

February 20, 2004

PRESTIGIOUS CO-OPS NEARING PRICE PEAKS OF 4 YEARS AGO

By Josh Barbanel

   Amid a surge of interest from Wall Street buyers, the price of a prestigious Park Avenue address is now approaching levels not seen since the real estate market peaked four years ago and then tumbled along with a declining stock market, brokers say.

   A study of the most expensive co-ops in the city, typically large prewar apartments on the Upper East Side and Central Park with grand views, found that average prices of high-end apartments, defined as those costing more than $4 million, surged nearly 15 percent last year, to $7.2 million. That figure was 5 percent below the peak of the market in 2000.

    The study's author, Kirk Henckels, director of private brokerage at Stribling & Associates, said the sales of these luxury homes accelerated throughout the fall, with prices rising further in agreements reached in the last few weeks in exclusive Fifth Avenue and Park Avenue buildings.

   The study identified 91 luxury co-ops that sold for more than $4 million last year, a number that included 15 higher-priced trophy homes selling for more than $10 million each. There were more sales in the last half of 2003 than during the first half of 2000, when the market hit a peak, Mr. Henckels said. "In co-ops the pressure has continued," he said. "We have some outstanding town houses available, but in co-ops there is precious little left to sell."

   This finding is supported by other brokers, who say that a surge of buyers, buoyed by end-of-year Wall Street bonuses, entered the market intent on taking advantage of extraordinarily low interest rates. Interest rates have long been credited with driving up demand for lower-priced housing across the city and the country, but the link to the luxury housing market has traditionally been more tenuous.

   This resulted in frequent bidding wars, little in evidence in the luxury market for several years, and a decline in the inventory of available apartments. Now with prices rising, many prospective sellers are afraid to put their apartments on the market until they can buy a new one first, further driving down supply.

   Kathleen M. Sloane, a vice president and director at Brown Harris Stevens, said that the market came to a halt last spring at the time of the Iraq war, and that the peak spring selling season was delayed until July. But for the last few months, she has regularly worked 12-hour days to keep up with the demand for apartments. "Since mid-December we have been engaged in bidding wars in every single transaction" she said.

   Frederick W. Peters, president of Warburg Realty, said the luxury market had "turned 180 degrees in 12 months."

   "By the early fall," he said, "there were bidding wars, with both bidders below the asking price. Later in the year, the winning bidder would typically be at the asking price. Now the winner is over the asking price."

   The study by Mr. Henckels also found that sales of single-family town houses were strong, with prices and sales up, and with 46 sales over $4 million, with an average sale price of $7.7 million. That was just below the peak year of 1999, when the average price was $7.9 million. That surge produced a glut of listings above market prices that took several years to work through, brokers said.

   Stephen Kotler, an executive vice president at Douglas Elliman, said that he recently marketed an apartment at 700 Park Avenue at 59th Street, which, unlike the prime East Side apartments, had only two bedrooms and was in a postwar building. The asking price was nearly $3.5 million. "The response was tremendous, we had 50 inquires in the first week," he said. A sale agreement is pending.

   Sales of high-end condominiums were also reported strong last year at a number of new luxury buildings and were being aided by the strong market this winter as well, the brokers said.

   The most expensive residential sale ever recorded in Manhattan was last year 's purchase at $42.5 million, plus transfer taxes, of a 12,000-square-foot loft, plus terrace, in the Time Warner Center on Columbus Circle. Last year's peak co-op sale was a $20.5 million duplex on a high floor on Park Avenue in the 70 's.

   Asked about the state of the upscale condo market, Louise Sunshine, a marketing consultant to many of New York's newest condominium projects, including the Time Warner Center, said: "We had four sales of more than $10 million in the last 10 days at Time Warner. The market is exceedingly strong."

   In early 2002, there was a burst of real estate sales in the luxury market that quickly faltered along with the economy. Mr. Henckels said that sharply higher interest rates or a declining economy could weaken the market again, but he remained optimistic, especially in view of the limited inventory.

   "Even if the economy stalls," his report advised buyers, "it will be at higher prices. And if you overpay by a few percentage points, it will seem irrelevant in a few years."

GRAPHIC: Chart: "Prices Up at the Top"
Both average prices and numbers of sales have risen for homes priced at $4 million and more in Manhattan.

Co-ops

1997

TOTAL SALES (millions): $238.5
NUMBER OF SALES: 36
AVERAGE SALE (millions): $6.6
SALES OVER $10 MILLION: 5
HIGHEST SALE (millions): $12.0
WHERE: Fifth Avenue

1998

TOTAL SALES (millions): $210.7
NUMBER OF SALES: 35
AVERAGE SALE (millions): $6.0
SALES OVER $10 MILLION: 2
HIGHEST SALE (millions): $12.5
WHERE: Fifth Avenue

1999

TOTAL SALES (millions): $332.9
NUMBER OF SALES: 50
AVERAGE SALE (millions): $6.7
SALES OVER $10 MILLION: 7
HIGHEST SALE (millions): $20.0
WHERE: Fifth Avenue

2000

TOTAL SALES (millions): $699.3
NUMBER OF SALES: 92
AVERAGE SALE (millions): $7.6
SALES OVER $10 MILLION: 18
HIGHEST SALE (millions): $36.0
WHERE: Park Avenue

2001

TOTAL SALES (millions): $465.6
NUMBER OF SALES: 69
AVERAGE SALE (millions): $6.8
SALES OVER $10 MILLION: 10
HIGHEST SALE (millions): $19.0
WHERE: Fifth Avenue

2002

TOTAL SALES (millions): $474.8
NUMBER OF SALES: 76
AVERAGE SALE (millions): $6.2
SALES OVER $10 MILLION: 7
HIGHEST SALE (millions): $12.9
WHERE: Central Park W.

2003

TOTAL SALES (millions): $653.1
NUMBER OF SALES: 91
AVERAGE SALE (millions): $7.2
SALES OVER $10 MILLION: 15
HIGHEST SALE (millions): $20.5
WHERE: Park Avenue

Town Houses

1997

TOTAL SALES (millions): $78.7
NUMBER OF SALES: 14
AVERAGE SALE (millions): $5.6
SALES OVER $10 MILLION: 1
HIGHEST SALE (millions): $11.0
WHERE: East 70's

1998

TOTAL SALES (millions): $88.4
NUMBER OF SALES: 14
AVERAGE SALE (millions): $6.3
SALES OVER $10 MILLION: 2
HIGHEST SALE (millions): $12.7
WHERE: East 80's

1999

TOTAL SALES (millions): $239.2
NUMBER OF SALES: 30
AVERAGE SALE (millions): $8.0
SALES OVER $10 MILLION: 7
HIGHEST SALE (millions): $21.0
WHERE: East 60's

2000

TOTAL SALES (millions): $465.0
NUMBER OF SALES: 65
AVERAGE SALE (millions): $7.2
SALES OVER $10 MILLION: 10
HIGHEST SALE (millions): $16.5
WHERE: Gramercy

2001

TOTAL SALES (millions): $195.0
NUMBER OF SALES: 31
AVERAGE SALE (millions): $6.3
SALES OVER $10 MILLION: 4
HIGHEST SALE (millions): $12.0
WHERE: East 70's

2002

TOTAL SALES (millions): $282.8
NUMBER OF SALES: 40
AVERAGE SALE (millions): $7.1
SALES OVER $10 MILLION: 6
HIGHEST SALE (millions): $17.0
WHERE: East 70's

2003

TOTAL SALES (millions): $355.9
NUMBER OF SALES: 46
AVERAGE SALE (millions): $7.7
SALES OVER $10 MILLION: 8
HIGHEST SALE (millions): $19.8
WHERE: East 60's

(Source by Kirk Henckels, Stribling & Associates)

Copyright 2004 The New York Times Company

 

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The New York Times House & Home Section February 19, 2004 ALL'S FAIR IN LOVE AND LISTINGS By Motoko Rich    AFTER renovating his one-bedroom apartment last fall, Steve Gordon, a 28-year-old…... Read more >

The New York Times
House & Home Section

February 19, 2004

ALL'S FAIR IN LOVE AND LISTINGS

By Motoko Rich

   AFTER renovating his one-bedroom apartment last fall, Steve Gordon, a 28-year-old bond trader, wasn't thinking of selling. With new kitchen countertops and bathroom fixtures and restored hardwood floors, he said, "I wanted to spend time enjoying it."

   But when he received a persuasive letter from Elaine Clayman, a Manhattan real estate broker who was touting five recent sales of similar apartments in his doorman co-op with a roof deck on East 54th Street, he agreed to meet with her.

    With buyers jamming open houses and losing out in bidding wars, Ms. Clayman 's approach is just one of dozens of ploys that New York's real estate brokers are using to woo sellers to satisfy buyer demand. They are promising high prices, stalking couples on the verge of a nasty split and cajoling owners with the claim that there will never again be as good a time to sell (not in the next few months, anyway).

   In Mr. Gordon's case, Ms. Clayman eventually convinced him that because of surging demand for one-bedroom apartments and dwindling supply, he could get a good price. So in January, only 18 months after he had bought the apartment, Mr. Gordon put it on the market. Last weekend, he signed a contract with a buyer. He said he made a 15 percent profit on the sale.

   Mr. Gordon could have waited and gambled that he would receive a higher price. "The grass is always greener," he said. "You never know what the future holds." But, he added, "I was worried that more supply in the building would come online and people would have more options."

   Of course, homeowners have been receiving marketing pitches from brokers for years. But in the last few months, frantic real estate agents have ratcheted up the quantity and intensity of their mailings with promises of untold riches. For the few who have so far taken them up on their offers, the profits haven't necessarily been that high.

   Some send screeching fliers peppered with capital letters and exclamation points. "IF NOT NOW -- WHEN? THERE HAS NOT BEEN A BETTER TIME TO SELL IN THE LAST 10 YEARS!!!!" wrote Mel Lisiten, a Halstead agent, in a monthly newsletter he is mailing to residents of the Corinthian, an 800-unit condominium on East 38th Street.

   And in about 500 postcards sent to apartment owners on the Upper West Side in January, Irene Kruglova, a broker with Bellmarc Realty, urged apartment owners to "Get Rich Now! Retire to Florida! Move to L.A.! You will not believe these prices! I will get you the top dollar!" Ms. Kruglova said some people were not aware of what their apartments were worth. "When they are made aware they might be very willing to sell," she said. She admits, though, that no sellers have taken her up on the pitch.

   Other brokers are sending more targeted mailings. When clients identify specific buildings where they want to buy, Elizabeth Sheehan, a broker with Coldwell Banker Hunt Kennedy, sends out a postcard and a $5 Starbucks gift certificate to owners in particular buildings. In one recent postcard to 32 owners in a Greenwich Village building, Ms. Sheehan wrote as if trying to get a first date: "My clients Sarah and Michael currently rent in your neighborhood," she said. "They love your building and were especially interested in your line with a balcony," she added, referring to similar apartments on different floors. So far, Ms. Sheehan has not recruited a seller.

   With mortgage rates lingering at record lows for the past year, buyers have scooped up everything on the market. After peaking at the end of the first quarter of last year, the inventory of available co-ops and condos for sale has been dropping for the last nine months, according to Jonathan Miller, president of Miller Samuel, a real estate appraisal firm.

   On the last day of January, there were 4,321 co-ops and condos listed for sale in Manhattan south of 116th Street on the West Side and 96th Street on the East, Mr. Miller said. That compared with 6,113 on the same day last year, a 29 percent drop. Just in the month through Jan. 31, he said, the number of listings contracted by nearly 11 percent.

   With so many owners having sold in the past year, there are very few sellers left. "People that were already on the fence about selling have already sold," Mr. Miller said.

   Even those attracted by the steep appreciation in the value of their homes are reluctant to sell, simply because they won't have any place to move. "There are plenty of people who would be glad to put their apartment on the market once they find what they're looking for, but they just can't," said Frederick W. Peters, president of Warburg Realty in New York.

   When Tom Grauman and his wife, Caroline Grauman-Boss, who have lived in their one-bedroom apartment on Morningside Drive since 1991, heard that a neighbor was recently offered $440,000 for an apartment, they realized their home was worth about four times what they paid for it.

   The couple, who have a 5-year-old daughter, would like another bedroom. But even if they made a hefty profit on a sale, they aren't sure they could find a bigger place within their price range in Manhattan. "It seems like everybody is sitting on properties that are worth a lot more than when they bought them, but nobody can afford to move within the areas that they want to live," Mr. Grauman said.

   In San Francisco, where the number of single-family houses and condos available for sale is half of what it was in January of last year, some brokers are trying to woo sellers by giving them plenty of time to find a new place.

   Rick Turley, manager of the San Francisco Lakeside office of Coldwell Banker Northern California, said agents now list properties contingent upon the buyer allowing the seller to rent back the house for up to 90 days after a sale closes.

   In Manhattan, the notoriously scrappy real estate industry is marshaling its usual tricks. "You have to be a detective in this market," said Michele Kleier, president of Gumley Haft Kleier, a firm specializing in luxury properties. "You have to call all your friends in every building and say, 'Who's fighting in the elevators? Who's getting a divorce?' "

   Others are calling people to whom they have sold apartments with promises of skyrocketing values. "That can kick in the 'My God, I paid $2 million and I can sell it for $3.5 million' " reaction, said Hall F. Willkie, president of Brown Harris Stevens Residential Sales in Manhattan.

   Brokers may also use pressure tactics to make sellers think time is running out. Christopher Thomas, president of William B. May Brooklyn, said agents are telling sellers that with interest rates likely to stay low only through the presidential election, "it could be a closing window of opportunity to sell."

   Apartments are not stocks, though, and most owners need a compelling life change -- like a marriage, a new baby or a new job -- to be willing to move. And in New York, many people just bought and have not finished remodeling the kitchen. "We had another peak of the market in summer 2000," said Jacky Teplitzky, a broker with Douglas Elliman in Manhattan. "People in New York City traditionally hold their properties for five to seven years. We are not yet in the cycle where people are ready to move."

   Nevertheless, a well-timed pitch can persuade some sellers. When Rich Bonati, a dentist, received a letter from Ms. Clayman saying she had a buyer interested in a one-bedroom apartment in his building, he called her.

   Because Dr. Bonati is opening an office on Long Island and plans to close his Manhattan dental practice over the next six months, he figured it was a good time to sell his Park Avenue South apartment. Rather than troubling with advertising or open houses, he decided to sell directly to Ms. Clayman's client, Neil O'Halloran, a lawyer who wanted to buy in the building.

   After two weeks of negotiations last fall, Mr. O'Halloran agreed to pay a little more than $250,000 for the apartment, which has monthly maintenance fees of more than $1,600. He moved in earlier this month. Mr. O'Halloran said he was relieved not to have to bid on numerous properties. "We knew going in that if they decided to sell, I was assured that I was the only one who was going to bid," he said.

   For Dr. Bonati, though, it was not a lucrative deal. After taxes, fees and commissions, he said, he and his wife, Gina, ended up losing about $15,000 on the sale. He said that because he wanted to sell quickly, it was worth the loss. "You're kind of paying for this opportunity," he said.

   Sometimes, the promises of high prices work almost too well. When Ms. Kleier sent a letter to eight residents of a Park Avenue co-op where a nine-room apartment sold for $3.9 million in December, one owner responded -- with a $5 million selling price.

   Ms. Kleier figured her clients, who had been outbid on the $3.9 million apartment, would balk. To her surprise, they swallowed the 28 per cent price increase, and bid on the new apartment. Now, though, the sellers say they won't sign a contract until Ms. Kleier finds them a six-room apartment to buy. Her challenge?

   "They want to get it at last year's prices," she said.

GRAPHIC: Photos: HARD SELL -- As apartment inventories go down, sales methods heat up. Above, a leaflet from Halstead and a postcard from Bellmarc Realty -- "Retire to Florida," it urges. (Photo by Philip Greenberg for The New York Times)(pg. F1); MAIL CALL -- A broker's letter convinced Steve Gordon, above, to part with his new apartment on East 54th Street and helped Neil O'Halloran, right, buy one. (Photographs by Philip Greenberg for The New York Times)(pg.
F10)

Chart: "There's Nothing Out There"
As inventory of available apartments falls, real estate agents have become desperate to get owners to sell.

Inventory of Manhattan apartments below East 96th Street and West 116th Street. Dots indicate the last day of the quarter, except last dot, which is for Jan. 31, 2004.

Graph tracks inventory of Manhattan apartments below East 96th Street and West 116th Street from 2001 to Jan. 31, 2004.

(Source by Miller Samuel Inc., appraiser)(pg. F10)

Copyright 2004 The New York Times Company

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MONSTER BROKERS ELLIMAN, CORCORAN BRAWL FOR LUXURY By: Gabriel Sherman The New York Observer January 5, 2004 In the past year, Manhattan's top residential real-estate brokerages have been remade through…... Read more >

MONSTER BROKERS ELLIMAN, CORCORAN BRAWL FOR LUXURY
By: Gabriel Sherman

The New York Observer
January 5, 2004

In the past year, Manhattan's top residential real-estate brokerages have been remade through a furious welter of corporate consolidations that began in the late 1990's and have placed Manhattan's two largest residential brokerages, Douglas Elliman and the Corcoran Group, at the summit of a hyper-competitive market where nationally financed holding companies have dominated and, industry experts say, left Manhattan's independent mid-sized brokerages with an uncertain future.

Consolidation is a continuing trend. It has happened in the rest of the country, and it's finally happening here in Manhattan," said Alan Rogers, the chairman of Douglas Elliman, which is backed by the $26 billion Prudential Company. "We're ending with two very large firms. The middle-sized firms are getting squeezed out."

But not without a fight: Peter Marra, the president of William B. May, a storied Upper East Side company founded in 1866 that has sold properties to the Vanderbilts, Carnegies and Fricks, has come under increasing pressure in recent years to sell his 150-broker company.

"Every day, we get calls to be bought," Mr. Marra said. "The trend is clear -- there are a lot less of us [independent companies], for sure. The bigger firms and the conglomerates preach that bigger is better and that they will put the rest of us out of business. I'm betting that is not going to happen. Just because you have 1,000 brokers doesn't mean you are providing a quality business relationship. When you expand to the levels that these firms have, quality has to suffer."

It's an old New York story made new again. With the Dow at a 19-month high and the economy growing at a torrid annual rate of 8.2 percent, 2003 saw a record $45 million penthouse sale at the new Time Warner Center that sent shock waves through Manhattan's luxury residential real-estate market in July, signaling that the Sept. 11 downturn may finally have ended.

From Barnes and Noble and Crate and Barrel to Wal-Mart and Starbucks, the thrust of corporate brands into almost every nook of the national economy has migrated to Manhattan real estate, once a posh enclave of old society brokers who traded listings over lunches at the Knickerbocker Club.

But the realities of today's market has shifted to favor the efficiencies of big business. The consolidation among Manhattan's residential brokerages has brought corporate tactics to a residential real-estate market that, until now, conducted so much of its high-end business in cozy, personal dealings and over modish lunches, where knowing the right broker eased the way past notoriously cagey co-op boards and owning an exclusive slice of Manhattan real estate meant more about the names on the deal, not the high-technology Web sites that national firms use to market luxury properties to prospective buyers around the world.

Indeed, many of the largest deals closed in 2003 were handled by Manhattan's largest real-estate concerns, Elliman and Corcoran. Robbie Browne, a broker with the Corcoran Group, closed on the storied $45 million Time Warner penthouse, and fellow Corcoran broker Deborah Grubman sold former Sony Records chief Tommy Mottola's East 64th Street spread for more than $13 million.

At Douglas Elliman, Dolly Lenz recently unloaded former ImClone chief Sam Waksal's 5,000-square-foot Soho loft for nearly $7 million. And in the months following the Sept. 11 attacks, broker Tristan Harper scored a high-ticket sale for $18.2 million at 515 Park Avenue, when his client bought the apartment that had formerly been owned by New Jersey Senator Jon Corzine, before he sold it for $18 million to record executive Alan Meltzer, the chief executive of Wind-Up Entertainment. At the time, the sale was the highest price paid for an apartment in the months following the Sept. 11 attacks.

Rolling In It: Both Corcoran, a division of N.R.T., and Prudential-backed Elliman posted record revenues in 2003. Corcoran will take in approximately $5 billion in revenue in 2003, according to the firm's chief executive, Pamela Liebman. The firm, founded by Barbara Corcoran in 1973 with an initial investment of $1,000, now has 810 New York brokers, an increase of 122 this year, and recently acquired 10,000 square feet at its 660 Madison Avenue headquarters, along with 2,500 square feet on the Upper West Side at 2112 Broadway, to expand its physical plant.

Ms. Liebman said the consolidation in Manhattan's residential brokerages is far from over. "It wouldn't be out of the question in the next several years to see a lot more consolidation," she said.

Matching Corcoran's moves to shore up market share, Douglas Elliman, the largest firm in Manhattan, now has 1,000 New York brokers -- an increase of 200 in the past year -- and the firm plans to record more than $6 billion in sales this year. In early December, Douglas Elliman signed for more than 60,000 square feet at 575 Madison Avenue, which doubled the firm's office space in the building that has been its headquarters for 30 years. Since Dottie Herman and her partner, real-estate financier Howard Lorber, bought Douglas Elliman last March for close to $72 million, it has grown from 800 New York brokers to 1,000. Related suburban and summer markets are helping: The company has more than 2,000 brokers when you include the Prudential Long Island branches now in the company 's control.

And in today's national -- and global -- economy, a rash of buyers are entering the Manhattan market from across the country and around the world who are wholly unfamiliar with the network of old-line brokerages, firms such as Alice F. Mason and Edward L. Cave, and are instead moving towards the large, highly visible brands of Corcoran and Elliman.

"We have buyers coming from all over the country to buy in Manhattan, and we have access to brokers all over the country," said Bob Becker, the president and chief executive of N.R.T, Corcoran's parent company, a national giant with 53,800 agents and 956 offices. "The success of Corcoran is evidence of the fact that a large corporation can help these buyers. We look to acquire companies, hire more people and make them more effective." N.R.T's staff has grown by 300 percent under Mr. Becker's aggressive management and acquisition strategy.

Today, the New York market has been upended by the presence of the Parsippany, N.J. -- based N.R.T, a subsidiary of the publicly traded Cendant Corporation that had $149 billion in closed sales in 2002. N.R.T. has used its operation of the Corcoran Group to boost market share in Manhattan's lucrative residential real-estate market, where the average price of a two-bedroom apartment topped $1 million for the first time in history, according to an independent report issued by Miller Samuel Inc. in October. "I think if the trend towards consolidation continues, it becomes more difficult for the smaller brokerages to compete," said Jonathan Miller, the president of Miller Samuel.

To the principals of Manhattan's top brokerages, their large size and leverage in the market are better tools to serve demanding Manhattan buyers. According to Ms. Liebman, Corcoran's Web site -- launched in 1995 -- has been a major advantage for the firm in marketing apartments and increasing sales. The site now receives more than one million visitors a month.

"We do more business through the Web site than through print advertising. A smaller boutique firm just can't offer as many listings," Ms. Liebman said.

In this competitive climate, Corcoran and Elliman have been shadowing each other's actions. In 2002, Douglas Elliman became part of Long Island -- based Prudential, and the combined firm now totals more than 2,000 agents across 50 offices in Manhattan and Long Island. To keep pace, in October the N.R.T.-backed Corcoran acquired 50-year-old Hamptons powerhouse Cook Pony Farm Real Estate, including the firm's 10 offices and 160 agents on both forks of eastern Long Island, as well as Palm Beach, Fla. -- based Paulette Koch Real Estate, a firm with 30 agents in the lucrative South Florida luxury-home market.

The spate of consolidation has put continued pressure on mid-sized Manhattan brokerages, who don't have the marketing leverage and economies of scale that nationally funded Corcoran and Elliman wield in Manhattan's fast-changing marketplace. Many industry experts say that well-respected mid-sized firms with luxury-market pedigrees -- companies such as Warburg Realty, Stribling and William B. May -- face the biggest challenge in this new centralized market.

"In an age when it's hard to make a buck in this business, aggregation is the only way to survive," said Paul Purcell, the former president of Douglas Elliman who is now the chief executive of Braddock and Purcell, a real-estate consulting firm. "If you can dominate a region, you can be competitive. You need a large presence in this new climate to lock up market share. I think small boutique firms will remain, but mid-sized firms are the ones who will go."

But to the mid-sized brokers from firms like Warburg, William B. May and Fox Realty, the corporate titans in Manhattan's real-estate market seem undignified, as the city increasingly loses customer services they say only small firms can offer.

"New York is having the same experience in consolidation that has clearly been going on all over the country for some time," said Fred Peters, the president of Warburg Realty, a mid-sized company with 85 brokers. "But being a smaller firm gives me another point of differentiation between myself and these enormous multi-company firms. Access to people is easier at a company like Warburg. And while many people have approached me and said, 'Don't you see the handwriting on the wall?', the handwriting on the wall reads differently to me."

"I can stay involved in every deal we do," said Barbara Fox, the president and owner of Fox Realty. "Not only does a buyer or seller have their own broker at our firm, but it's a virtual impossibility with these mega-big firms to receive that kind of supervision." Ms. Fox said that her company routinely gets offers to be acquired, but that she's hesitant to sell and has instead formed referral agreements with brokerages in the Hamptons and other popular second-home markets to help boost her exposure among luxury buyers. She said her firm has doubled revenue since 2002, adding six additional brokers and recently expanding to 2,500 square feet of office space at 1015 Madison Avenue.

When the Price Is Right: Commitment to service aside, small and mid-sized brokerages are still in the business to make money. And as the market moves toward large brokerages that are becoming richer and more concentrated through consolidating market share, the buyout offers will become harder to resist.

"This company is my baby," Ms. Fox said. "But I'm sure if the right situation would present itself, I would think about selling. You would be crazy not to."

Hunt Kennedy, a former independent mid-sized firm founded in 1988, realized that the only way to survive in this current climate of consolidation was to find a corporate backer. In 1996, the firm had only $52 million in annual sales and 26 brokers -- but after merging with Coldwell Banker that year, the combined company, Coldwell Banker Hunt Kennedy, expanded rapidly and now has 260 brokers and $1 billion in annual sales. In August, the firm acquired Charles Greenthal, an independent Manhattan firm.

"They were in a crunch and needed a growth plan. They were a classic midsize firm, and it was a good fit," said JoAnne Kennedy, the president of Coldwell Banker Hunt Kennedy. Her firm's aggressive expansion strategy and alignment with a national parent company helped the company shore up its position in the market.

But while the corporate parents of Corcoran and Elliman seek out their next acquisitions, the two firms now face the prospect of a market in which, as the two largest players, they have to compete with each other for exclusive listings -- and talent. In November, Douglas Elliman hired former Corcoran vice president Jacky Teplitzky, a Top 25 broker at the firm who led a staff with more than $50 million in sales last year. The move signaled the increasing competition between Manhattan's residential real-estate behemoths that has peaked in the past six months, as the two firms battle for market share and primacy of the country's most competitive real-estate markets. Industry experts say that top brokers have been offered signing bonuses to switch companies, taking their extensive client roster with them. In an industry that still prides itself on its refinement, luxury real-estate brokerages generally deny that signing bonuses are a part of their recruitment strategy. But representatives of smaller brokerages claimed that such deals are common.

"My brokers are always being recruited. It's no secret that these firms are out there recruiting," Mr. Marra of William B. May said. "There will constantly be a fight and struggle for the top people. It's like baseball -- this is a free agency now. There is a bidding war for people they perceive as high-profile brokers. It's unfortunate, but that's the way this business works."

Tresa Hall, an executive vice president at Corcoran who oversees recruiting, denied the claims by the smaller firms. "We absolutely, unequivocally, do not pay signing bonuses."

Karen Duncan, Elliman's executive vice president and director of sales, said her firm doesn't offer signing bonuses to entice brokers to join. "Douglas Elliman is not paying signing bonuses for brokers joining our firm. We don't have to. It's an easy way for other firms where people are leaving to justify why they are leaving, to say they are getting signing bonuses from Douglas Elliman or other firms, for that matter."

Ms. Liebman doesn't view growth in the largest firms as leading to direct competition. "We never look at what anyone else is doing. There will always be competitors in the marketplace," she said. "There are people out there who like to think of this big rivalry between Corcoran and Douglas Elliman, but it's only because we're the two largest firms."

Dottie Herman, the CEO of Douglas Elliman, said she saw the consolidation trend in the mid-1990's and has pursued a business strategy without regard to her rivals, including Corcoran. "I concentrate on running my company and doing the best job I can," Ms. Herman said. "Everyone has tried to make it a rivalry between Corcoran and me. There will always be a Corcoran, and there will always be a me. I'm just focused on making this company better than ever."

But industry experts see the national consolidation trend forever remaking the Manhattan real-estate landscape in 2004.

"Will the competition continue?" Warburg's Mr. Peters said. "Short of swallowing each other, there is nothing these two firms can do." Instead, he takes a long and unsentimental view.

"We're still a competition-oriented society," Mr. Peters said. "And that is probably good."

Copyright 2004  New York Observer

 

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From HAMPTON HOMES January 2004 Where’s New York’s Real Estate Market Headed in the New Year? We called on the heads of four major New York real estate firms to ask their predictions for the 2004…... Read more >

From HAMPTON HOMES
January 2004

Where’s New York’s Real Estate Market Headed in the New Year?

We called on the heads of four major New York real estate firms to ask their predictions for the 2004 market.  Collectively, they have over 100 years of experience dealing with New York City’s sometimes crazy real estate market.

The phrase that best summarizes what they all expect, is “consolidation and more gains.”  For example, Alan Rogers, Chairman of Douglas Elliman, noted that the market often swings very wide.

“Sometimes it’s very high, when there are many more buyers, but then it might swing very low, when there are more sellers.  Going forward into 2004, I see the market as being more in balance with both buyers and sellers.  To my mind, that makes for a healthier market.”

Frederick Peters, President of Warburg Realty Partnership, put his prediction in slightly different terms.  He describes real estate prices as “firming.”  “If a property is priced appropriately,” says Peters, “a seller is more likely to get the price he seeks.”

Barbara Fox, President of Fox Residential Group, is even more optimistic.  “I foresee no reason why the market would fall in the New Year,” she said.  Indeed, she sees gains ahead.  “The economy is improving,” she observes.  “That’s going to affect the real estate market.”

Hall Willkie, President of Brown Harris Stevens Residential Sales strikes a similar note.  “New York’s real estate market has been strong through 2003 even when the economy wasn’t very strong,” he says.  “But now the overall economy is strengthening.  I think that means only means one thing:  a stronger real estate market.”

There are two underlying factors that will drive prices upward, according to Willkie.  Interest rates are so low that rentals aren’t really an alternative for any kind of long-term housing need.  “And given Manhattan’s limited supply, there is only pone possible outcome: upward pressure resulting in higher prices,” he says.

What should you make of all this?

If the only direction for the market is upward, you’re in a comfortable position if you plan to stay put.  Enjoy the ride. 

If you’re a seller, you’re likely to get your price.

If you want to buy a new home and have been waiting to see what will happen, it makes sense to get off the sidelines.  It’s time to call a broker.

Have you missed your opportunity if you’re a new home buyer on a limited budget?  No! There are exciting opportunities – provided you expand your vision.  First, a few reminders:

Back in the 1980s the West side, North of 96th was an undesirable Manhattan periphery.  Now it’s a top neighborhood.  Similarly, a scan 20 years ago Tribeca was industrial, unappealing – and bleak.  Today it throbs with shops, stores, restaurant – and new home construction and alterations.

“Manhattan real estate is like a tide that reaches a little further every time,” observes Frederick Peters.  So where’s the tide headed next?  “Harlem,” he replied without even a pause.

“Families who simply can’t afford the kind of space they need are starting to look for homes in some of Harlem’s gorgeous, landmarked areas,” he reports.  “I see Harlem as Manhattan’s next big area of expansion; beautiful properties are beginning to sell for $700,000 to $1.2 million.”

Hall Willkie agrees.  “There are wonderful values in Harlem,” he says.  “People are beginning to recognize them.”

In addition to Harlem, many areas a few subway stops beyond Manhattan are gaining strength.  In Brooklyn, areas like Carroll Gardens, Cobble Hill, Park Slope and DUMBO are getting hot.  In Queens, Long Island City is coming to life.

So what can you expect in 2004?  We’re delighted to bring you the good news:  Whether you’re buying, selling or just staying put, it looks like you’re in for a happy New Year, according to our prognosticators.

Enjoy!

Copyright 2004 Hampton Homes

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Special to Quest: REAL ESTATE MARKET UPDATE- January 2004 By Frederick W. Peters President Warburg Realty Partnership, Ltd. In the second half of 2003, Manhattan’s real estate market has functioned…... Read more >

Special to Quest:

REAL ESTATE MARKET UPDATE- January 2004
By Frederick W. Peters
President
Warburg Realty Partnership, Ltd.

In the second half of 2003, Manhattan’s real estate market has functioned like an earthquake: recovery began to rumble at the centers of the most desirable neighborhoods, and the waves have spread gradually into the surrounding areas as the year has progressed.  The depressed market of the first quarter of the year, with the entire economy teetering on hold for news about the Iraq war, improved noticeably month by month after April 15th. By June, many of the properties that had languished on the market for months were absorbed (for reasons which combined increasing demand and reduced asking prices), by September it became clear that the Fall market was not going to bring a rush of inventory, and by November many appropriately priced properties were receiving multiple bids, with some selling at prices over asking.  In my January, 2003 report I called for a first quarter of consolidation, with prices flat, followed by an orderly move upward over the balance of the year. The only surprise is just how brisk the move upward has been!

Apartments in the most established and desired areas have fared best as our market recovery has gathered steam.  On the Upper East Side, fairly priced family apartments of 6, 7, 8, and 9 rooms have sold briskly, often within two weeks, with those in good condition still achieving the best prices in the shortest amount of time.  The small apartment market remains hot, in spite of lower rental prices. It seems that even starters still want their piece of the Big Apple, even if they have to stretch to get it.  Interestingly, the slowest market in this hot area was until recently the ultra luxury area.  There were very few sales for over $10,000,000 during the first six months of this year, and numerous properties in this category remained on the market for months.  Here too, however, the last four months of 2003 saw a tightening up of prices and a substantial increase in transactions.  And now, little by little, this recovery is making itself felt in the more peripheral areas: on East End, Sutton and Beekman Places, and in the East 50s.

The Upper West Side has seen a similar pattern.  There has been such a dearth of property on Central Park West that the properties brought to the market, especially those with views, have sold immediately at record prices.  Similarly, family apartments on West End and Riverside have been snapped up since September.  Two bedroom properties on the side streets, especially with two baths, cannot be found for under $800,000, The West Side overall now equals and sometimes even surpasses the East in price per square foot, and as on the East Side, the ripples of the strengthening market are spreading.  Many properties north of 96th Street and in Harlem are now selling for seven figures.  And there is certainly no relief to be had by moving downtown!

Every aspect of the downtown market is busy as 2003 ends.  Sales at top prices abound in TriBeCa, which was still struggling to recover from the 9/11 doldrums at this time last year.  As always, the Village, both East and West, has fewer available properties than prospects, and mobbed Sunday open houses are becoming the norm again. Prices are also now increasing on the Lower East Side and in NoLita, though there are still bargains to be found in these neighborhoods.

Increasingly, the younger and more adventurous New Yorkers are forsaking Manhattan altogether, moving to Long Island City or such Brooklyn neighborhoods as Williamsburg, DUMBO, Carroll Gardens, Fort Greene, or Park  Slope. And Hoboken, with the PATH and ferry service, is now the West West Village.

What has occasioned the enthusiasm with which New Yorkers have returned to buying their piece of our amazing city? There has been no flight to the suburbs in the wake of 9/11; maybe we all have a slightly clearer understanding of how precious every moment is, and we want to spend it right here at the center of everything.  And maybe the fact that New York real estate held up so much better than the stock market over the last few years proved that there was no bubble here. Maybe the bricks and mortar of Manhattan are not only a piece of the Apple, but also a piece of the rock.  

Copyright 2004  Quest Magazine

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ASHFORTH WARBURG: TOO HARD TO PRONOUNCE The Real Deal, November 2003 Ashforth Warburg Associates, one of the city’s oldest residential firms – and also one of the hardest to say – has changed its…... Read more >

ASHFORTH WARBURG:
TOO HARD TO PRONOUNCE
The Real Deal, November 2003

Ashforth Warburg Associates, one of the city’s oldest residential firms – and also one of the hardest to say – has changed its name to Warburg Realty Partnership, Ltd. 

The firm, which began as the Albert E. Ashforth real estate company more than a century ago, in 1896, recently shed the first part of its name in connection with a major branding campaign.  The Ashforths are no longer part of the firm, bought out in 1991 by Frederick Peters, the company’s president, and his partners. 

“We made the decision that we wanted to do a big branding campaign,” said Peters.  “One of the thing we know is that people found the company name incredibly hard to say.  We figured the right time to change it was now.”

The company had also continued to pay royalties for use of the Ashforth name.  The company’s Warburg moniker comes from Peters, whose family on his mother’s side is the Warburg clan.  His great-grandparents’ mansion at Fifth and 92nd has been the Jewish Museum since 1947.

Peters said the new name better reflects what the company does.

“’Ashforth Warburg’ gives you no information about the company,” he said.  “The new name tells people we are in real estate.  By using ‘Partners’, it has the connotation of a smaller firm, and the name has more resonance.”

The company also unveiled a new Web site, www.warburgrealty.com, and will undertake a major advertising campaign.  Warburg has 85 brokers, located in offices at 969 Madison Avenue and 795 Broadway.

Copyright 2003 The Real Deal

 

 

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From Financial Times, September 26, 2003 Farewell What's in a name? A tale of old money, opulence and New York lore, for Frederick Peters. Peters, a scion of the Warburg banking family, has renamed Ashforth…... Read more >

From Financial Times,
September 26, 2003

Farewell

What's in a name? A tale of old money, opulence and New York lore, for Frederick Peters. Peters, a scion of the Warburg banking family, has renamed Ashforth Warburg Associates, a real estate brokerage he has owned since 1991, Warburg Realty Partnership. But why now?

"It was increasingly hard to say," Peters told Observer. "If you say Ashforth Warburg Associates fast it sounds like wawa wawa wawa."

So Peters decided to shake up the well-varnished world of luxury real estate by calling in a branding consultant (albeit one who is the father and husband of two of his brokers).

"This is a slamdunk," the former composer says of the new name. "My mother is kind of excited."

Alas, the change did not come without a bit of sadness for the loss of Ashforth, which had been part of the New York real estate world since 1896 and is now a separate company in Westchester. "It's a sentimental moment for me."

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Copyright 2003 The Financial Times Limited

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From The New York Post, September 25, 2003 Ashforth Warburg Drops One Well-Known Name By BRADEN KEIL ASHFORTH Warburg, which began as the Albert E. Ashforth real estate company in 1896, will henceforth…... Read more >

From The New York Post,
September 25, 2003

Ashforth Warburg Drops One Well-Known Name
By BRADEN KEIL

ASHFORTH Warburg, which began as the Albert E. Ashforth real estate company in 1896, will henceforth be known as Warburg Realty Partnership Ltd.

Frederick W. Peters, the company's president, cited a few reasons for the name change, in addition to the fact that he and his partners bought out the Ashforth family in 1991, and had continued to pay them royalties for the use of their name.


Indeed, Peters' family on his mother's side is the financially influential Warburg clan, whose great-grandparents' mansion at Fifth and 92nd has been the Jewish Museum since 1947.

In addition to its new identity, Warburg Realty Partnership unveiled its new Web site, www.warburgrealty.com.

He says his brokerage firm is within the top five of sales per broker.

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Copyright 2003 The New York Post

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Ashforth Warburg Associates Becomes Warburg Realty Partnership, Ltd. New Name Reflects Modern Identity for Service-Oriented Century-Old Firm, Emphasizes Spirit of 'Partnership' Between Company and its…... Read more >

Ashforth Warburg Associates Becomes Warburg Realty Partnership, Ltd.
New Name Reflects Modern Identity for Service-Oriented Century-Old Firm, Emphasizes Spirit of 'Partnership' Between Company and its Clients

New York, NY - (September 24, 2003) -- Ashforth Warburg Associates, one of New York City's oldest and most respected luxury residential brokerage firms, is now Warburg Realty Partnership, Ltd. The firm was renamed today and rededicated to the company's core philosophy of extraordinary service and relationships between the company's real estate professionals and its clients and customers. Frederick W. Peters, the company's President, made the announcement at a reception for the industry on Park Avenue.
       "We wanted to create a more modern identity for the company, one that emphasizes the partnership between us and our clients, which has always been the basis of our business," Mr. Peters said. "It is important for us to put a spotlight on our modernization, to reflect that we have taken precise and surefooted steps to meld up-to-the-minute technology with our time-honored trademark of personalized service."
       "Our niche is excellence of service - yesterday, today and in the future," Mr. Peters continued. "Warburg Realty Partnership represents this fundamental principle."
       In addition to its new identity, Warburg Realty Partnership unveiled its new web site (www.warburgrealty.com). The new site is unique because it allows users to customize their web experience based on whether they are looking to buy or sell. Since the needs of buyers and sellers differ greatly this new approach to the traditional real estate web site allows each user to glean tailored information about the marketplace and the resources Warburg makes available to address his or hers specific needs.
       In addition, the site offers Warburg Realty Partnership an opportunity to showcase properties under a variety of classifications, instantly providing access to extensive information on each listing to the public as well as other professionals in the community. Further, the site is partnering with OnBoard, LLC, to be able to offer in-depth neighborhood and community information regarding schools, shopping, restaurants, physicians, services and more.
       "In this time of consolidation and monolithic companies with thousands of agents, it is important for serious real estate professionals to contemplate their value in the market. The choice today between options in the luxury market has become more stark," Mr. Peters said. "At Warburg Realty Partnership, our focus is on personal service and personal relationships, which is a difficult task when you have thousands of brokers. This boutique approach lies at the root of our firm, and informs the added value Warburg Realty Partnership brings to the market."
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From New York Magazine, August 18, 2003 Real Estate's New Power Brokers: Selling Stars - The 21 Who'll Take - and Market - Manhattan By Deborah Schoeneman Frederick Peters Warburg 2002 SALES: "In the…... Read more >

From New York Magazine,
August 18, 2003

Real Estate's New Power Brokers: Selling Stars - The 21 Who'll Take - and Market - Manhattan
By Deborah Schoeneman

Frederick Peters
Warburg

2002 SALES: "In the first six months of this year [2002], I totaled just under $30 million."

BIGGEST DEAL: A 3,200-square-foot co-op at the El Dorado. How much? Like Bartleby, he prefers not to.

THE DETAILS: His prime clientele circles around Central Park West and Park Avenue. Started as associate director at Albert B. Ashforth in 1986 and bought the company in 1991 (changing the name to Ashforth Warburg). On the board of the Glimmerglass Opera.

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From the New York Times, August 7, 2003 HOUSE & HOME/STYLE DESK Web House-Hunts, 2¢ From All Over By MOTOKO RICH Along with just about anyone looking for a home these days, Edie Hu, a 28-year-old…... Read more >

From the New York Times,
August 7, 2003
HOUSE & HOME/STYLE DESK

Web House-Hunts, 2¢ From All Over
By MOTOKO RICH

Along with just about anyone looking for a home these days, Edie Hu, a 28-year-old cataloger at Sotheby's in Manhattan, hit the Internet earlier this summer. Across the country, her father, Michael Hu, an engineering consultant in Menlo Park, Calif., logged on, too.
       As it turned out, Mr. Hu first spotted the listing for the $250,000 one-bedroom apartment his daughter is now buying in a brownstone on the Upper East Side. "It was luck," said Ms. Hu, who had unsuccessfully bid on another apartment in the same building just a month earlier.
       More than luck, it was the widespread availability of real estate information on the Internet that helped the Hus. Over 70 percent of buyers search for homes on the Internet, according to the National Association of Realtors. But who's to say the buyer has to make all the mouse clicks? An extra pair of eyes just might catch the juicy listing that the buyer misses.
       Now anyone, anywhere can help buyers to house-hunt. That can be a boon to time-starved professionals who welcome the help sifting through dozens of listings. But parents, siblings, friends and co-workers may also cause tension when companion searchers second-guess choices, or pester prospective buyers with suggestions of homes they would never, in a million years, live in.
       The process can be particularly fraught when the house-search helper is a parent who reveals a complete lack of knowledge of a child's taste. Similarly, when an adult child assists a parent, the older generation may chafe at the role reversal, and spurn the suggestions of well-meaning offspring.
       Ms. Hu's father was trawling through New York real estate Web sites when he saw the listing for the third-floor unit with exposed brick walls in a small building. After several attempts to recommend apartments in skyscrapers with doormen, Mr. Hu had finally learned that, to his daughter, doormen were a turnoff.
       "He definitely wanted me to buy a place in a safe area and not a hole in the wall," Ms. Hu said. "So when there was a doorman or an elevator, it sounded fancier and he was thinking that was a nicer place."
       Both father and daughter now laugh at some of Mr. Hu's early misfires. "Through this whole process he's gotten to know me better and what I like," Ms. Hu said.
       When customers were confined to scanning newspaper classifieds or visiting real estate agencies, it was more difficult to ask for help with the work. But now that property listings can be inspected online, shopping for a new home has become a group activity, with family and friends pitching in, often from far-flung locations. The addictive, voyeuristic allure of perusing homes in cyberspace gains an added thrill when, even if you can't buy that house, maybe your daughter, mother or boss can.
       Searches conducted by someone other than the prospective buyer are "probably up five- or sixfold" in the past few years, said Andy Kozusko, an agent with Long & Foster in the Lehigh Valley of Pennsylvania. Mr. Kozusko receives frequent inquiries from people who have seen a listing on the Web. But, he said, "When I follow up and pursue it further, I find out they are looking for their sister or their father."
       Visits to real estate Internet sites are jumping. In June, 13.9 million people visited home and apartment sites, up 32 percent from a year earlier, according to Nielsen/NetRatings, a unit of VNU. And according to Homestore, the company in Westlake Village, Calif., that owns Realtor.com, visitors to the site used its "e-mail a friend" function to send more than a million listings during the second quarter of this year — though a majority of those were probably sent by the prospective buyers.
       People are saying, " `Hey, I have the Internet and I have a little bit of time, so I'll look at what's there,'" said David Jackson, an agent in the Dallas office of zipRealty, a Web-based brokerage firm. Mr. Jackson said he has had 10 clients in the past six months who had someone else actively searching online.
       It was an old family friend who found a home for Mr. Jackson's clients Kelly and Kim Wright, formerly of Wichita, Kan. After the Wrights, who have four children, made an unsuccessful house-hunting trip to Dallas in June, Ray Settles, who is also Mr. Wright's new boss at an advertising and marketing firm, began cruising the Web. He found a four-bedroom, three-bathroom house in a Dallas suburb that he thought would be perfect for them.
       Mr. Settles arranged to see the house, and that night he phoned Kim Wright in Kansas. Two days later, she drove down to view the house. She made an offer on the spot. Mr. Wright had seen the house only online when the family moved in late last month.
       Although the Internet is meant to speed up the home search, the addition of another party can also slow it down. The listings Mr. Hu plucked off the Internet for his daughter were often a waste of time, said Eugenia Foxworth, an agent with Coldwell Banker Hunt Kennedy in New York. "It was making me crazy," Ms. Foxworth said, explaining that Ms. Hu then forwarded Mr. Hu's selections to her. "I'd e-mail back: `We saw this one.' `That one is off the market.' `That one is too small,' " Ms. Foxworth said.
       Some real estate agents are suspicious of clients who seem to be getting too much help from a cyber-crazed relative. "It kind of worries me," said Jimmy Valentino, an agent in the Houston office of eRealty, a Web-based real estate firm. "You don't know how motivated the real buyer is."
       And if a parent or sibling or friend e-mails listings for suburban two-story McMansions when the prospective buyer prefers an urban loft, that can create new tensions. "You realize that this person knows nothing about me," said Jeremy Rifkin, author of "The Age of Access," a book about networks and technology. "You think, `Oh, my God, are they out of their minds?' "
       But with the Internet, buyers can dictate the specific parameters of their searches, and listings on the Web offer much more detailed information than a newspaper ad. "You have more assurances that whatever is coming back is a closer match to exactly what you are looking for," said Eric Shih, an assistant professor of marketing who focuses on technology at the Babcock Graduate School of Management at Wake Forest University in Winston-Salem, N.C.
       Mr. Shih added that because the Internet speeds up the availability of listings ó instead of coming out once or twice a week in the newspaper, they come out hourly ó buyers need help to keep track of them all.
       That was the case with Kelly Flowers, a 30-year-old teacher in Virginia. During the first few weeks of her search, she lost one condo to a higher bidder; two others sold before she was even able to make an offer. So she asked her mother, a computer consultant, to log on to the Internet every morning to check listings while Ms. Flowers was teaching English as a second language. Her mother was instructed to call her on her cellphone if there was a hot prospect.
       Last month, Ms. Flowers closed on a two-bedroom condo in Fairfax, Va. Without her mother's help, she said, "I don't know if I would have gotten my place."
       Sometimes the helper is more enthusiastic than the buyer. Sherri Weidner-Irwin, who lives in Tampa, Fla., is looking for a home for her parents, Fred and Elizabeth Weidner, in Westminster, Md., where they live. Ms. Weidner-Irwin, who recruits dentists for a dental insurance network in Florida, spends four or five hours a week scouring the Web for listings of small houses her parents might like. Not that they have put their current home — the five-bedroom house she grew up in — on the market.
       Her parents are only starting "to realize that they don't need what they have," she said. "It's that generation where it's time to downsize, but mentally it's very hard to accept."
       Her job, as she sees it, is to be a cheerleader. "I'm seeing what can entice them," she said.
       Her parents are taking their time. "I think she's pushing us," Mr. Weidner said. He and his wife are not quite ready, he said, to give up their home of 23 years, where they've raised four children and a menagerie of goats and horses on three acres.
       Nevertheless, tomorrow Mr. Weidner and his wife are planning to accompany their daughter when she arrives from Florida to show them some homes.
       "It's a good idea to look and see what's there," Mr. Weidner said. "You never know if you're going to see something and say, `Wow, this is what I really want.' "
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Copyright 2003 The New York Times Company

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From the New York Times, July 3, 2003 HOUSE & HOME/STYLE DESK TURF; For Home Buyers, Fear of Commitment By MOTOKO RICH (NYT) LAST year, Jeff Holthaus, a 36-year-old engineer in Chicago, decided he…... Read more >

From the New York Times,
July 3, 2003
HOUSE & HOME/STYLE DESK

TURF; For Home Buyers, Fear of Commitment
By MOTOKO RICH (NYT)

LAST year, Jeff Holthaus, a 36-year-old engineer in Chicago, decided he was ready to settle down. But he had a commitment problem. Sure, he had his reasons. First, he had to figure out what he wanted. Then his company decided to move to Michigan, so he had to find a new job. And it wasn't always about him, either. In one case, he was the one who was rejected.
       Then, in April, he thought he had found The One, until, at the last minute, he backed out of it: a two-bedroom condo in Bucktown, an up-and-coming neighborhood in Chicago. For Connie Grunwaldt, Mr. Holthaus's real estate agent, it was like watching a bridegroom run away from the altar.
       ''He sent me over the edge,'' said Ms. Grunwaldt, who said she had showed Mr. Holthaus 92 apartments over the previous year.
       Mr. Holthaus, who finally signed a contract in May and moved into a two-bedroom, $271,000 apartment in the Old Town section of Chicago last weekend, said that because it was his first time buying a home, he was ''somewhat apprehensive and worried about having buyer's remorse.'' And having just gone through a job change, ''there was some nervousness due to the economy and the instability of the future.''
       He may be extreme, but Mr. Holthaus is not unique. According to Ms. Grunwaldt, buyers with the jitters are on the increase -- so much so that she is now writing up two contracts for every buyer, on average, compared with just one at the same time last year. The faltering is most evident, she said, among first-time buyers. ''They're thrilled with the fact that interest rates are low, and they're jumping on without thinking it through,'' she said. ''Then when they get into the process, they realize, 'Whoa!' ''
       Although interest rates are at 45-year lows and the housing market continues to zip along, real estate agents in many cities have noted the emergence of cold feet. Buyers are becoming confused by contradictory economic signals and worry that the housing market may have hit its peak.
       For sellers, the hesitation can be more than irksome. David Lew, a 40-year-old investment banker in Manhattan, said that five different times since April, he thought he had sold his one-bedroom co-op apartment in Murray Hill. Each time, he accepted an offer and sent out a contract.
       Mr. Lew, who has already moved with his wife to a two-bedroom Midtown apartment they bought last summer, has been surprised by all the stumbles. ''It's contrary to what I had heard before I put my apartment on the market,'' he said.
       ''I was reading that the one-bedroom market is holding up'' because of low interest rates, he added. ''But it's the intangibles, like 8 percent unemployment in New York and the economic uncertainty that has led to what's going on now. It's frustrating with all this last-minute disappointment.'' Mr. Lew said he had accepted the fifth offer a week ago, but yesterday his real estate agent, Daniel Ruiz of Brown Harris Stevens in Manhattan, said the buyer had backed out.
       Mr. Ruiz said in an earlier interview that buyers are starting to perceive a shift in the market. ''There's this sense that people can walk away from things and there is plenty of other stuff on the market,'' he said. In May, he said, out of 14 accepted offers that his office handled, only 7 went to closing; in June, 8 out of 17 deals fell apart.
       In the San Francisco region, some real estate agents report a rise in the number of buyers pulling out of deals. Jeff Sterley, a broker with Pacific Union Residential Brokerage in suburban Greenbrae, Calif., said that 30 percent of accepted offers are now being broken, up from 20 percent a year ago and 10 percent three years ago.
       And in New Jersey, Jay Schweppe, chief executive of Schweppe & Company Realtors of Montclair, the number of deals that fall apart is up 50 percent since last year. ''When you put the pressure of a six-year run of appreciation, all of a sudden people are asking, 'Am I buying at the top of the marketplace?' '' Mr. Schweppe said.
       In some cases, it's not the buyers who are pulling out, but their bankers. In Brockton, Mass., near Boston, Stephen Damon, office manager of Jack Conway Real Estate, said three of his deals had fallen apart in the past month because the lenders decided at the last minute that the buyers' finances did not qualify them for a mortgage. ''When it comes down to the nitty-gritty, sundry things happen, and they're denied,'' Mr. Damon said. By now, the low interest rates have drawn most of the financially stable buyers into the market, and some with shakier credit histories are trying to sign up for mortgages.
       In New York, another deal-breaking factor is the co-op board. While many buyers can get a mortgage, they may not have the wherewithal to pass stringent board requirements.
       Carol Shainswit, a broker in the Midtown office of the Corcoran Group, said she is representing the seller of a three-bedroom apartment on the Upper East Side who has had to turn away three offers because the buyers were unlikely to pass muster in the building.        Some boards are asking for liquid assets that are two or three times the purchase price of the apartment. Evelyn Cole, a broker at Stribling & Associates, said that some Upper West Side buildings were raising their requirements for the cash portion of a deal to 35 percent, from 25.
       The real estate markets are by no means collapsing. In May, the last month for which figures are available, sales of existing homes rose to 5.92 million units, 4.4 percent more than in May of last year, according to the National Association of Realtors in Washington. Historically low mortgage rates continue to drive the market, and in many areas, properties favored by entry-level buyers are still generating bidding wars.
       But while many first-time buyers are driven by the attractive trade-off between rents and mortgage payments, buyers hoping to move to larger homes are frightened by the shaky economic recovery.
       Late last month, for example, the owners of a three-bedroom apartment on the Upper East Side thought they had sold the unit for $2.7 million when the buyers, a couple with three children who wanted a bigger place, decided to pull out. Peter Marra, president of the William B. May real estate agency, said the husband called and said: ''You know what, a couple of guys in my department were let go, and I'm concerned. This is a big commitment, so I'm just going to stay where I am for a while.''
       Jon Hyde, a 61-year-old retired advertising executive in northern California, said such jitteriness nearly drove him mad when he sold his family's home recently. By the time he moved out of the house this week, three separate would-be buyers had tied it up in escrow for several weeks each before pulling out of the deals.
       Each time he received an offer for the place, a three-bedroom secluded wood house in the San Rafael hills that he had owned for 19 years, he asked to meet the buyers and show them around the property.
       ''It was a pleasure for me to meet the next owner of my house,'' Mr. Hyde said. But after three failed deals, he said, ''it got to the point where I would have sold it to bin Laden.''
       ''Of course,'' he added, ''I would have turned him in.''
       In the end, Mr. Hyde sold the house to a divorced man for $1.18 million, down from an original asking price of $1.25 million. This time, Mr. Hyde stayed out of the process. As he put it, ''I felt I was in a position where I had to lower the price, be flexible, keep my mouth shut and stay out of the way.''
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Copyright 2003 The New York Times Company

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From the New York Times, April 13, 2003, Sunday, Late Edition Your Home; Imposing Flip Taxes in a Co-op By JAY ROMANO When the costs of operating and maintaining a co-op building increase, there are two…... Read more >

From the New York Times,
April 13, 2003, Sunday, Late Edition

Your Home; Imposing Flip Taxes in a Co-op
By JAY ROMANO

When the costs of operating and maintaining a co-op building increase, there are two basic ways of generating additional cash. One is to increase monthly maintenance fees; the other to impose a buildingwide assessment.
       Since neither solution is likely to endear a co-op board to its shareholders, other strategies for raising money are often sought. One such strategy is the imposition of what is know as a "flip tax," whereby shareholders who are selling their apartments are required to pay a sum of money for the privilege of doing so. Flip taxes can range from as little as a couple of thousand dollars to as much as tens of thousands of dollars depending on the way the tax is calculated and the amount of the sale.
       And while flip taxes are only slightly less unpopular than maintenance increases ad assessments, co-op lawyers say that an increasing number of co-op boards are now considering proposing flip taxes for their buildings.
       "I the past, a lot of buildings avoided the flip tax on the theory that it destroys marketability," said Bruce A. Cholst, a Manhattan co-op lawyer. "But with spiraling operating costs causing double-digit maintenance increases, some boards are taking a fresh look at flip taxes."
       In virtually all cases, Mr. Cholst said, imposing a flip tax requires amending the proprietary lease. Doing that, he said, generally requires the consent of two-thirds to three-quarters of the shareholders. As a result, Mr. Cholst said, the specific details of the tax - including how the flip tax is calculated and who, if anyone, will be exempt from paying it - must be carefully thought out by the board. In fact, he said, even before a board attempts to define the specifics of a flip tax, it must first sell the general idea of the tax to the shareholders.
       "I usually start with an opening newsletter to shareholders in which we tell them what a flip tax is ad give them the rationale for wanting to adopt it," he said. I most cases, Mr. Cholst said, the rational is fairly obvious: money has to be raised and there are only a limited umber of ways to raise it. "The flip tax is really nothing more than an alternative method for raising income," he said.
       One strategy he has used to convince shareholders of the advantages of a flip tax, Mr. Cholst said, is to identify sales of apartments over the preceding three or four years and then calculate how much a flip tax of a particular amount - say, one percent of the sale price - would have yielded in revenues over that time. "Then I like to relate the theoretical revenues to recently enacted maintenance increases to show how the flip tax could have alleviated the necessity for some or all of those increases," he said.
       Mr. Cholst pointed out that while it may not be prudent to count on money raised by flip taxes when budgeting for ordinary operating expenses - because of the inherit uncertainty about the amount of money that would be raised in any given year - relating the revenues to operating expenses is something that most shareholders readily understand. "And the bottom line really is that any money is better than none," he said.
       Dennis H. Greenstein, another Manhattan co-op lawyer, said he often recommended flip taxes as a way of generating income for capital improvements or to build up the reserve fund. In face, he said, using the tax to beef up the reserve fund could offset the potential perception that flip taxes adversely affect marketability.
       "A healthy reserve fund in looked upon favorably by prospective purchasers," he said.
       One of the most difficult aspects of adopting a flip tax, Mr. Greenstein said, is a determining how the tax will be calculated. "There are many different possibilities," he said, "with the two most popular formulas being a percentage of the sale or a set number of dollars per share."
       In cases where the flip tax is calculated by using a set percentage of the sale price, "typically, it's anywhere between one and three percent." Mr. Greenstein said. So, for example, the tax on the sale of a $400,000 apartment would be $4,000 to $12,000, depending on the percentage used. "I've seen flip taxes of as much as $50,000," he said.
       The tax can also be computed on a "per share" basis. This would mean that a tax of, say, $10 a share would amount to $4,000 for a shareholder who owed 400 shares - regardless of the sale price - while the tax would amount to $8.000 for a shareholder who owned 800 shares.
       "I've also seen flip taxes based on the profit on the sale," Mr. Greenstein said. In such systems, the tax may be computed on the gross profit - that is, the difference between the original purchase price and the sale price - or it may be computed on the net profit, allowing for deductions for things like brokers' fees and legal fees.
       Whatever method is chosen, Mr. Greenstein said, it ultimately must be one that is acceptable to the shareholders. "If the shareholders don't think the flip tax is fair, they're not going to pass it," he said.
       Mr. Cholst, the Manhattan co-op lawyer, said one way to make a flip tax more palatable to many residents is to tie the amount of the tax to the length of time a shareholder has lived in the building.
       For example, he said, if a seller has been a shareholder for less than two years, the flip tax might be four perfect of the profit, while those who have been in the building for more than two years would pay on a three percent tax. "That might be a good way to sell the tax because it is designed to penalize people who buy for investment purposes," he said.
       Yet another way to make a flip tax more palatable is to allow for certain exemptions to paying the tax.
       Some buildings, for example, exempt transfers between family members, spouses and domestic partners and between estates ad heirs and beneficiaries. Other co-ops exempt from the flip tax those who are selling one apartment in the building and buying another.
       "Exemptions are fine, and they may be a way to help sell the flip tax, but the more exemptions ad exceptions you adopt, the more difficult it is to administer," Mr. Cholst said. He added that boards considering proposing a flip tax should also make sure that adoption of the tax provides a sufficient lead time for those who may be in the process of selling their apartments. "You might want to include a provision that the tax does not apply to ay sales contracts signed within 60 das of the adoption of the tax," he said.
       And what about the perception that flip taxes may have an adverse impact on marketability?
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Copyright 2003 The New York Times Company

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From Gotham Magazine, December 12, 2001 Deep Dish From the Desk of….Real-Estate Players By Andrew Stone Frederick Peters President Ashforth Warburg        "I'm an art person.…... Read more >

From Gotham Magazine,
December 12, 2001

Deep Dish From the Desk of….Real-Estate Players
By Andrew Stone

Frederick Peters
President
Ashforth Warburg

       "I'm an art person. I'm also a poetry person. I suppose I'm a humanist," says tall, congenial Frederick Peters, president of Ashforth Warburg Real Estate, from his fourth floor office on 76th Street. Perhaps that's where his success lies. Who wouldn't want a humanist to fid his or her dream residence?
       Located above Madison Avenue's bustling Zitomer department store, Peter's office is inviting and warm, lined with modern artwork ranging from Picasso prints he received as an 18th-birthday present to a study in "the equivalencies between antidepressants and paint colors" by young sculptor Josh Melnick (a 100mg Zoloft is the same color as a melon-seed paint chip) to the large, commanding piece by Israeli artist Uri Dothan behind his desk. "This is large-scale computer imagery printed out on computer paper," he says of Dothan's captivating work. "I think it's awesome."
       A retractable wall between his space and that of his executive vice president turns his soothing sanctuary into a weekly meeting place for 30 brokers. "I want it to blend warmth, the sense that I'm easy to come talk to, with photographs of my family, which I always like to have around, and reflections of my interest in contemporary art."
       Peters admits that when the stress of the job gets to be too much, he takes 10 minutes out and performs yoga. "I shut the door, pull my knees into my chest, and do some stretching. It helps," he says. "I think as the market became more chaotic I the 90s and as it has become chaotic now in a different way, I'm not nearly as Zen as I used to be." As a reward or a consolation, Peters, who like to bake, will occasionally whip up something and bring it into nibble on from his desk drawer.
       His advice to potential sellers: "Be realistic. The marketplace I which you can pick a price out of the air and expect somebody to hit it, that's not the marketplace of today." And buyers: "This is the best moment for you that there has been for years. The fact is there's inventory, there are choices, and there is negotiability."

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