New Years Jingle – 4th Annual Edition

T’was the night before New Years, and all through New York
One could hear sounds of Brut champagne being uncorked.
Sellers rejoiced o’er a prosperous year,
While buyers embraced a less crazed atmosphere.

Yet t’was not a calm time, this 2015,
With so few new apartments hitting the scene.
Though bidding war frenzies were filled with less spice,
Half of all sales surpassed their asking price.

Financing markets maintained their tight state,
Making half of all buyers pay with cash as their bait.
For those still needing loans, they were oft left downbeat,
Forced to go non-contingent, all to merely compete.

New developments kicked into extra high gear,
Before their plush tax breaks would soon disappear.
The ultra-lux segment that calmed down this fall
Made developers break up large footprints for small.

All in all real estate had much reason to cheer:
Brooklyn’s growth breaking through to the high stratosphere,
The Bronx stepped it up as the new brave frontier,
Replacing Queens, Brooklyn as the nabe to hold dear.

As Jonathan Miller’s predictions fulfilled,
The Big Apple’s mean prices topped $1.8 mill.
Sales volume held strong, till the end of the year,
Despite open houses’ less crammed atmosphere.

The city saw much moving and shaking around:
Famed Union Square Cafe: new location bound.
Hamilton making some huge Broadway waves,
New Hudson Yards Subway stop received top raves.

In the world, the picture was filled with concerns,
As stock market swings gave many heartburn.
‘Saw softening growth in Russia and Brazil,
And China’s stock market come to a standstill.

With Paris and Ferguson, so still we all stood,
San Bernardino and Planned Parenthood …
We all were confronted with so much so fast,
Conversations that will certainly not be the last.

Some uplifting, positive news did unfold
(depending on which political party you polled).
‘Supreme court upheld same sex marriage. Woo hoo!
Relations with Cuba were normalized, too.

Women’s US Soccer Team won the World Cup,
Real flowing water on Mars was picked up,
Pope Francis made his US travels debut,
Though sadly John Stewart did bid us adieu.

So what do we see heading into next year?
We’d be lying if we said it was all very clear.
Will Volkswagen make it out of its rut?
Will global carbon emissions get cut?

Will Adele be able to beat her “Hello”?
How ’bout our elections, and Russia, and … woah!
That’s enough! What are we doing here?
Weren’t we writing of a Happy New Year?

Alas, we know not what the future will bring.
Most forecasts survive on a prayer and a wing.
Let’s think back and be grateful for 2015,
For WSJ naming us a top 100 Real Estate Team!

If you have a good job, go enrich others’ lives.
If you have some great friends, go give some high-fives.
If you have a nice home, bless the roof overhead,
If your family’s around, go make some gingerbread.
If you have some great kids, go give them a huge kiss.
No need to say more; you’re getting the gist.

As we end this short prose, in conclusion we write:
Happy New Year to all, and to all a good night!

A Spin on Holiday Gift Wrapping

The countdown is on…your list was made and checked twice.  You conquered Black Friday and clicked profusely during Cyber Monday.  Now the presents are safely tucked underneath your bed.  Ah, your work here is done…but is it?

Some say purchasing presents is only half the battle.  In fact, wrapping presents can be just as time consuming as buying them.  It’s safe to say that you spend most of your time looking for the tape dispenser or the scissors; but nonetheless it’s a process – and people may not be very excited about it.  So we are here to make the art of wrapping a bit more fun with these creative and easy ideas for the holiday season.

Top it off:

There is nothing better than topping your present with winter accents!  Elegant natural objects such as pinecones or sprigs of holly can embellish any traditional wrapping paper.  For an alternative touch, tie a holiday cookie cutter or candy cane to the ribbon.

Chalk it up:

The trendy chalkboard wrapping is back again!  Add a splash of color to this fun wrapping paper substitute with colored chalk, artistic winter scenes or personal messages for your loved ones.

Sweater weather (well almost…):

Repurpose last season’s cable knit sweater by using it to wrap small presents!  Cut the sleeves off and use hot glue to wrap around wine bottles, small presents or picture frames.  Tie a festive ribbon both horizontally or vertically around the presents for the perfect final touch.

Glitter is gold:

Holiday sparkles add a festive and lively touch to any traditional paper.  Start by wrapping boxes in kraft paper and use self-adhesive rhinestones or dot with glitter paint.  Add a holiday tag or ribbon to complete the package.

Taking a Breath

You may have read some headlines, spoken with brokers or chatted with friends.  It’s true: the New York City real estate market is taking a breath.  This should be far from a surprise to you, our readers; for some time now we have been forecasting a market normalization, away from the frenzied bidding wars and price increases we’ve seen for some time now.  What does this look like on the ground and in the day to day?  A few symptoms of this normalizing market:

Developer apartment shuffling:  high end new developments like 111 Murray or 432 Park, as two examples are 1) carving up full-floor apartments into smaller, more accessible properties, thereby lowering the overall sales price and accessing a more prevalent buyer, and 2) placing larger, 4-5 bedroom units lower in their buildings versus on the top floors, and swapping them with 1-2 bedroom units (recognizing that people looking for large apartments are willing to buy them on lower floors).  While these moves, in their own right, may seem quite modest, we do believe they could be a harbinger of things to come as the market adjusts to a new normal.

Open house traffic:  we have heard this from other brokers and see this in our own open house traffic … the crowds are thinning.  While earlier in the year, apartments would be literally packed with prospective buyers, now we’re observing a more moderate volume level of interested buyers, especially in the $2-$5 million range.

Time to signed contract:  at the height of the market frenzy, it wouldn’t be unusual to have a signed contract within a week of listing, with many interested parties coming out of the woodwork immediately.  Nowadays, good properties move within 1-3 weeks; this is still within a month of a listing mind you.

Importantly, we must keep in mind that we are seeing no evidence of any price softening at this time based on emerging trends.  As of this writing, prices are still increasing at a healthy mid-single digit clip.  So what does this mean for you?

If you’re a seller, we can’t say this enough:  pricing strategy is everything.  This is not the time to test the market to see if that one long buyer is out there who is willing to pay above market to purchase your property.  Let the market determine that via multiple offers.  Your best bet continues to be to price at or just below the market, to generate the volume you need to arrive at the best outcome.  If you’re a buyer, you should see the rate that your hair may be turning grey from this process slowing down a bit, buying you just a tad more decision time on pulling the trigger.  You should still enter the market prepared to act, perhaps with slightly less stress involved.

Zipping It Up

Forbes just released their annual list of “America’s most expensive zip codes” and, wouldn’t you know it New York City slide into three different spots in the top 20 zip codes.  What might not be surprising is that Sagaponack, NY took the number two spot behind Atherton, CA taking the cake!  Lets not create a East Coast vs. West Coast battle here…what’s more important to focus on is whether or not you think you can name the three NYC zip codes at the top of the list?  Without further ado, here are the top three NYC zip codes:

#3 | 10012 – Greenwich Village, Soho, Nolita
This zip code boasts a median sale price of $7,302,117 with 130 average days on the market and a mere 91 properties for sale.

#4 | 10013 – Lower East Side, Soho, Tribeca
This zip covers an interesting mix of neighborhoods with a median sale price of $6,076,018 (driven by Tribeca), with 219 average days on the market and a mere 109 properties for sale.

#15 | 10065 – Upper East Side
This zip covers 59th to 69th Streets on the Upper East Side, between Fifth Avenue and the East River.  It boasts a median sale price of $4,406,262, the largest of the three inventories with 160 properties for sale and 106 average days on the market.

Other states’ neighborhoods that made it to the top 20 include, in order from most expensive to least (if we could even use that word): Miami Beach (NY’s 6th borough), Woodside, Aspen, Beverly Hills and Santa Monica.  If you thought you had it tough living in NYC, think again!

[Source: Forbes.com]

Holiday Tipping

It’s that time of the year when we give cheers, thanks and, yes, tips to those people in our lives who make it just a little bit easier and sweeter.  Tipping is not a requirement but it is definitely a holiday custom.  Although voluntary, you’d be in the shrinking minority if you didn’t tip.   Remember, tips are a very real part of this group’s total income, and a significant way of saying “thank you”.

Now, before we dive into guides and numbers, remember that how much you tip depends on many factors, from the size of the building you live in, the priciness of the address to the actual quality of service, your financial situation, how long you and the staff have been there, etc.  The broad rule of thumb is that the larger the building, the smaller the individual tips (since they add up once you have a few hundred people per building).  Most building staff prefer to receive tips early December but nevertheless, any cash-filled envelope will be appreciated.   Don’t forget, actual gifts, we have found, are always welcomed especially with dependents.

Here are some general averages to consider, split up by those people who take care of your dependents, those who take care of you and those who care for your home.

Dependents:
Nanny: 1 to 2 weeks’ pay
Regular babysitter: $30 – $50
Regular dog walk: 1 week’s pay

Personal services (varies slightly by frequency of service):
Hair stylist: 1/3 to 1 session
Personal trainer: 1 session
Massage therapist: 1 session
Manicurist: 1 session

Home:
Super, Resident Manager: $100 – $200
Doorman, Concierge: $60 – $180
Porter, Handyman: $20 – 100
Garage Attendant: $30 – $80
Cleaning person/Housekeeper: 1 to 2 weeks’ pay
Newspaper delivery: $20 – $50

Year-End Wrap-Up

Most reports of how we fared in 2015 won’t come out until mid to end-January as people busily crunch numbers after December’s data gets released.  We couldn’t wait until 2016, so we thought we’d do a pre-analysis, so to speak, to give you a sneak peak into how the year fared.  All of the numbers below refer to year-on-year comparisons, to get the best sense of an annual state of the market.

Supply:

Looking at supply, in other words the inventory available, we can see that condo supply inched up 6.2% to 2,268 properties, while co-op supply dropped by 3.1% from this time last year to 1,908 properties available for sale during the year.

The Margolis Team Blog, New York City

While these numbers are nothing to write home about in their own right, breaking down the statistics into apartment size tells a different story:  studios inventory was down 3.9%, 1-bedroom inventory increased by 2.8%, while 2-bedrooms jumped dramatically in availability by 18.7%.  Our hypothesis is that during the softer years of the NYC rebound, those apartments that were put on the market were those smaller studios and 1-bedrooms as they were cheaper and more liquid.  As the market heated up, the relative gains of the larger apartments caught up and incentivized sellers to list.  (Mind you, we’re still near the lows of inventory here).

Demand:

The demand, or contract signed picture below, looks very different.  Overall condo sales are down 36.6% year-on-year while co-ops are down 32.6%.  Keep in mind that last year was the first year we didn’t see any seasonal dip in sales, an anomalous year to be sure.  That said, you can see that demand is lower than even in 2013.  Breaking things down by apartment size doesn’t change the message:  studio sales were down 30.1%, 1-bedrooms down 28.1%, and 2-bedrooms down 31.6%.

The Margolis Team, New York City Real Estate Blog, NYC Real Estate Blog

Price per square foot and median prices:

You would think, therefore, that with demand dropping by 1/3 and supply more or less even, prices suffered, right?  Economics 101.  Not so!  Price per square foot has gone up:  10.1% for condos to $1,476 and 7.9% for co-ops reaching $971.   Similarly, median sales prices have also seen growth of 9% for condos reaching $1.45 M and 4.5% for co-ops reaching $740,000.

What’s going on here?  This is called market normalization during a time of continuing low inventory.  Real estate was still in demand, but not in a frenzied, bubble-like state (what we’ve been stating all along, may we add).  This is precisely why we don’t believe that prices will suffer during what we describe as “a breather” in the current market (we will discuss this topic later this week).

Sales over asking price:

The percentage paid over asking prices tell a very similar picture:  activity has slowed down but prices are still inching up.  Year on year, 35% of properties went for above asking versus 28% last year.  Understandably, therefore, 50% of properties sold for below asking, versus 59% this time last year.  It’s still good to be a seller.

Sales over asking - The Margolis Team NYC Real Estate Blog

Source: Graphs from PropertyShark