Bubble Wrap

New York could see a double dip in residential market

The November issue of The Real Deal includes an article with an array of analysts predicting where housing in New York is going over the next year with many forecasting a second round to the downturn.

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.

Property Taxes in NJ an issue as always

Come election season, it’s no surprise that a lot of controversy and debate has been raised with regards to New Jersey’s high property taxes, the highest of any state in the country. Bloomberg reports on the different policies on the issue by the two primary candidates, Incumbent Jon Corzine or his Republican challenger Christopher Christie. Meanwhile, attorney and property tax expert David Wolfe reports to the Star Ledger about the challenges with the state property taxes as a whole and whether reform will actually come.

“I think we’ll have some systematic change, but I don’t know that it will have a dramatic impact on the property tax burden. It will be difficult to achieve real change and success.

In New Jersey, we fund our schools through the local property tax. If we reduce the property tax burden, the funds will have to come from somewhere else. Ultimately, I think the taxpayers will demand some sort of reach change.”

Sharp Drop in Building Residences in the City

The Times writes about the huge drop in new construction with both the residential and commercial sectors as reported by the New York Building Congress. The report contends that the downturn may have bottomed out, while some industry experts are more pessimistic. There are currently only 2 commercial buildings under construction and housing has dropped from 30,000 units per year to about 6,300 this year.

The residential market is more bleak. More than 460 residential projects have been delayed, nearly a third of them in Brooklyn, according to the latest figures from the city’s Buildings Department. Many analysts say it will take several years for the market to absorb all the luxury apartments that have been built recently.

Hamptons market report shows mixed bag

The Real Deal reports on the 3rd Quarter 2009 Homes Sales Report from Town & Country Real Estate. Amongst the findings is that volume of sales in the Hamptons has dropped only 2.5% from the previous year, from 257 to 251 transactions.

Five of the 11 East End markets analyzed in the report (all on the South Fork but for Shelter Island), Amagansett, Bridgehampton and East Hampton Village, Shelter Island and Westhampton, saw an increase in sales, with East Hampton Village showing the steepest climb in sales volume at 169 percent.

Three Cents Worth: Moving Sideways?

Jonathan Miller charts inventory and inflation-adjusted median sales price for Curbed, noticing better stats than previous quarters.

The combination of these metrics suggest that things are not deteriorating as quickly as they had been since the 9/15/08 Lehman tipping point, but it still doesn’t show that we have found some sort of bottom for the Manhattan housing market. With high unemployment, shadow inventory and tight credit, I would think we have a while to go before things stabilize. Still, it’s better news than we have received as of late and I’ll take it.

O Stuy Town!

The Observer looks at the Stuy Town sale to Tishman Speyer as a possible stroke of good fortune for tenants of the mega-complex as their bid to buy the property was rejected three years ago.

In a new twist, it’s now at least conceivable that the tenants—along with other former bidders—might just have another crack at Stuy Town, this time at presumably a much less inflated price. Tishman Speyer is on pace, before the end of the year, to exhaust the reserve fund that has been helping it to make debt payments, as Realpoint reported the fund had just $33 million left as of September, down from $400 million in 2007. Since June, the report said that between $7 million and $19 million has been taken out of the reserve fund each month.

Madoff's Estate Sales

While The Observer reports on the recent selection of two Sotehby’s brokers to handle the sale of Madoff’s Upper East Side Penthouse, and The Real Deal reports on two Corcoran brokers chosen to market his Palm Beach home, The Post gets word on a flurry of activity on his Montauk beach house, which has been on the market for just over a week.

Bernie Madoff’s Montauk beach house has at least four offers. And there are so many more interested buyers in the Ponzi putz’s $8.75 million listing that Corcoran Group broker Joan Hegner, who shares the listing with her husband, Raymond, is already having the busiest September of her life.

The new estates on the block

The Star Ledger reports on the growing trend in New Jersey of luxury properties being put on the auction block to attract buyers, with one mansion, Froh Heim, being auctioned to the highest bidder after being on the market for $8.9 million. According to the Otteau Valuation Group, inventory of properties priced above $2.5 million is 3 times the state average, making it an attractive category for auctions.

“There’s no question that the level of inquiries increased with respect to luxury homes—sellers seeking an alternative way of marketing,” said Jeff Hubbard, an executive vice president of Sheldon Good & Co. Auctions Northeast, in Manhattan. “In the luxury-homes segment, you will probably see it increase 30, 40 percent next year.”

Deeds & Don'ts

Hamptons Cottages and Gardens looks at the mixed real estate market with pockets of activity entering into the Fall. Brokers are optimistic, but with prices not clearly going in one direction or the other, buyers are taking their time and looking at more properties than ever.

The current debate among buyers—and sellers—is what is market value is these days. Will it recover to old highs set in 2007 or will prices linger for a couple of years until the next big upturn—or downturn occurs? Those who still persist in overpricing their properties are ignoring world events.

Some pundits feel that significant appreciation is a long way off. Others are all too eager to see price spikes spiral upwards.

City Dealing to Make Luxe Condos Cheaper

The Post reports on the city’s push to expand their affordable housing portfolio by putting vacant apartments on the market at steep discounts. Negotiations are underway with a few banks who may be eager to unload their foreclosed property, but the banks would have to take significant losses.

A $500,000 luxury condo might be marked down to $300,000, suggested Rafael Cestero, the city housing commissioner.

In return for the markdown, developers or bankers would get up to a $50,000 city subsidy for each apartment.

He added that if the prices are right, the city would be prepared to buy unfinished buildings, as well as those where at least 50 percent of the units are empty.