At The Core | A Second-Half Year

The Q1 2017 sales market reports are in and it’s time to dive in and get a sense of the NYC real estate market. Overall, the market is in a rebuilding phase based on the pricing readjustment we’ve written about over the past few months. While median sales prices have dipped slightly, sales volume managed to inch up, as sellers finally adjusted to market realities and priced accordingly. Further, much evidence points to a release of pent-up demand in the resale market, which accumulated before the U.S. election last November as uncertainty loomed.   That’s what accounts for some of the transaction pop we’re seeing, the impact of which actually overpowered the rise in inventory.

In terms of prices, as we look to a year on year comparison, last year’s numbers were excessively weighted in favor of new development closings, which skewed prices upward based on their ultra-luxury bias. The fact that prices have not dropped more significantly bodes well for what’s to come. The average sales price continues to sit above the $3M mark in condominiums and above the $1.2M mark for co-ops.

New developments are especially good at skewing data, as contracts are signed a good 1-2 years prior to close, meaning the timing attribution of those numbers is way off. As an example, new development legacy contracts cased median luxury prices to hit a record high at $6.95M this quarter. This same data shows roughly 2/3 of new development sales closing at list price. However, these are lagging sales … way lagging. The reality on the ground now is different, with marketing time and inventory both rising sharply as developers are looking to offload their goods before they become stale.

Indeed, and as we predicted last year, we believe that 2017 will be a “second-half year”. We are seeing significant pick-up across the board and are gearing up for a very strong Q3 and Q4. Of note, reports are always lagging indicators by 6-9 months. We mention this because we don’t anticipate seeing the full evidence of this market strength until the end of this year or the beginning of next year. This makes for a very dynamic market in which it’s easy to anchor to current (old) data. Make sure you talk to people on-the-ground to position yourself effectively, whether as buyer or seller.

Ask The Experts | The Wealth Report Takeaways

As many of you have seen, The Wealth Report was just released, which provides the global perspective on prime property and investment around the world. We’ve been asked several times to share the key takeaways for the investors among you, and for non-investors who are merely seeking a macro perspective on their home ownership in The Big Apple.

So here’s what you can learn:

  • NYC is the leading city that’s home to the wealthiest individuals from across the globe, with 6,570 Ultra High Net Worth Individuals (UHNWI) It’s even outranking London, in that regard. That said, it’s noteworthy that London and NYC ping pong between #1 and #2 in the world for Current Wealth, Investment, Connectivity and Future Wealth, with LA, San Francisco and Chicago all making it into the Top 10.

 

  • The US and the UK continue to be the most attractive investment environment for the UHNWIs, with Lifestyle and Security as the primary driving factors, followed by Safe Haven for Capital and Education for Children. It’s not hard to see why the prediction is that the US and UK will continue occupying the #1 and #2 spots for some time to come.

 

  • We have to mention our published quote on NYC neighborhoods: In NYC, one of the more promising investment opportunities lie on the “Lower East Side, “where gritty meets trendy”, offering authentic New York without the whitewashing. The neighborhood between Houston and Delancey and east of Bowery to the East River is undergoing a transformation, with modern glass-fronted condos springing up alongside century-old red brick tenements, and projects such as the US$1bn Essex Crossing development acting as a catalyst for wider gentrification. Due for completion in 2024, this nine-building project will encompass a 15,000 sq. ft. public park, retail and office space and will be the new home of the Essex Street Market, reflecting the area’s burgeoning reputation for gastronomy and artisanal crafts.”

 

  • In NYC – luxury prices proved resilient (rising 3.5% year over year) – despite the hiccups felt by locals and the local real estate industry. Remember, everything is relative on the global stage, so you always need to look at global investment when you consider future prospects for NYC real estate.

 

  • The promise of federal investment in the US infrastructure has led to expectations of higher inflation and interest rates – pushing the dollar higher. While this does serve to put a short-term damper on foreign investing, the long-term outlook does not appear to be weighed down by such currency fluctuations.

If these highlights piqued your interest, you may want to take a deeper look into the report. There are fascinating insights into what the UHNWI’s are worried about, their shifting spending patterns and much more. Enjoy!

Apple Bites | Eleven Madison Park

Eleven Madison Park … yes, you knew it was high-end. Yes, you heard that it’s delicious, and likely have fond memories of your taste-buds getting tickled. But did you know that it was just named the World’s Best Restaurant? Let’s say that again: it was just named the best, most amazing restaurant in the entire world, the second ever American Restaurant to hold this high honor. And it’s in our backyard! How can we not spotlight it this month!

Back in 1998, Danny Meyer was its original owner but he handed the reins over to Daniel Humm and Will Guidara. Since then, continuing in the delectable tradition, nothing but accolades have followed. The 8-course dinner menu costs $300/person or a mere $145 for the 5-course bar menu … a pittance compared to other restaurants that have not been graced with such a title. If you haven’t been of late, maybe it’s time you refresh your memory. If you do, let us know what you think, and how it feels to sit in a chair where hundreds of foodies from all around the world have come to experience what is otherwise a local stop for all of us.

Monthly Gem | 135 W. 52nd Street

This month’s Monthly Gem is in a very unique, mostly office-building dominated midtown location on 52nd Street, between 6th and 7th Avenues. You shouldn’t scrunch your nose at that, however, as it’s one of the few “reasonable” price-points we’ve seen in some time, with plentiful amenities to enjoy. We’re talking a 12,000 square foot Residents’ Club, private dining area, a 75-ft. pool with integrated seating, natural-light filled kids’ playroom, golf-simulator, yoga studio, and a gym with private locker rooms and outdoor oasis. Not too shabby, eh?

In terms of the residences at 135 W. 52nd Street, there’s a significant design focus to their lay-out, from sliding glass doors that transform living spaces on demand to radiant heat flooring in the bathrooms. The building offers a contemporary but warm aesthetic, with all of the top-name appliances you might find at higher price-points, including Miele and WaterWorks.

The building is centrally located to actually take advantage of the quintessential NYC experience, with Central Park, Bergdorf Goodman, Carnegie Hall, MOMA and Rockefeller Center all a hop, skip, and a jump away. Or, you can dance-step your way to Broadway shows after your Michelin-rated meal. It’s truly one of the best of all worlds: location, luxury and price.

Date Your City | The Tribeca Film Festival

The 16th Annual Tribeca Film Festival is almost upon us, taking place from April 19th to April 30th. Tickets are available at the official festival website, with $10 for matinee screenings before 6pm, Mon–Fri), $20 for evening and weekend screenings, or all-you-can-see passes for individual days or the entire festival. That’s a whopping 98 narrative and documentary feature films, 57 shorts, 15 talks, 23 Virtual Reality + Interactive Installations, and 15 television events to choose from. The films have been curated from across 30 countries, including 78 World Premieres, six International Premieres, six North American Premieres, two U.S. Premieres, and six New York Premieres.

As the Tribeca Enterprises’ Director of Programming noted: “It’s uncertain and tumultuous times like these that we need artists and storytellers the most, and this year’s program is a testament to the unending capacity of film for impact, empathy, and even much needed escapism. Each in their own way, these 98 films fill me with optimism and inspiration at the unique power of our medium, and the eyes of a talented filmmaker to inspire, challenge, and maybe even change the world.” Don’t you want to go now and relieve your political, financial, or existentialist angst? 🙂