HGTV FrontDoorJuly 29, 2013
Brooklyn neighborhoods tend to get all the attention when it comes to landmark townhouse sales, but this week the focus is on Long Island City. A townhouse at 531 51st Avenue hit the market in April for $3.25 million and just went into contract. The CORE Group, which holds the listing, tells us the contract was signed last week after receiving several offers over $3 million. Based on those numbers, this will mark one of the biggest — if not the biggest — townhouse sales in that neighborhood. Just to give you an idea, the median price for houses in Long Island City is $2.25 million, according to Streeteasy. "Talking about buying a property for $3 million here is no longer a profanity," CORE broker Doron Zwickel told the Wall Street Journal.
The 21-foot brownstone is divided into a four-bedroom triplex with three full baths and a two-bedroom penthouse with two baths. The renovated interior features exposed brick throughout, wide-plank white oak floors and radiant heat flooring. Though the 3,100-square-foot triplex has been branded as the owner's unit, the 1,030-square-foot penthouse doesn't sound too shabby — it comes with a private 950-square-foot roof deck. Then again, the triplex boasts a 770-square-foot landscaped garden, so you really can't go wrong when it comes to outdoor space in this house.
Brokers WeeklyJuly 24, 2013
CORE’s Michael Graves has tapped into a pool of wealthy buyers who value privacy over perks. The veteran broker just sold two downtown lofts for over $12 million, despite having little or no amenities.
“The demand for boutique loft buildings downtown is very high,” said Graves. “And contrary to what some might believe, there’s a huge buyer pool of people who want buildings that are not amenity-rich. Some want to live discreetly and not come home to a doorman. They don’t need the interior gym and all the amenities being sold in the market these days. There’s a big buyer profile that I’m in touch with that likes these properties. I used that sales strategy for both properites.”
The four-bedroom penthouse at 7 Bond Street sold for $9.2 million, $700,000 above the asking price after just 23 days on the market. The building has no amenities.
Graves also sold a two-bedroom penthouse at 22 Warren Street for $3.55 million, $200,000 above the asking. A 1,000-square foot private terrace was the only “amenity.”
CurbedJuly 23, 2013
This newly-renovated Long Island City two-family townhouse is currently listed for $3.25 million, but you're probably already too late, as it has received multiple offers over $3 million, according to its broker. Separated into a 4BR owner's duplex with a finished basement and a 2BR top-floor rental with a roofdeck, every floor of the house—as well as the facade—offers a surplus of (not at all unattractive) exposed brick. When it does close, it will almost certainly set a new record for townhouses in Astoria/Long Island City.
The BrownstonerJuly 23, 2013
A Long Island City townhouse priced at $3.25 million has received several offers over $3 million possibly making it a record for the area. According to the broker, some offers were under $3 million and some over including some that were all cash and others not contingent on financing. The 21 foot-wide brick townhouse at 531 51st Avenue is set up as a four bedroom owners duplex with a finished basement playroom that includes its own entrance. It also has a 1,000 square foot two bedroom, two bathroom top floor rental with a roof deck that could be combined into the main house. Prices have been rising dramatically in parts of the borough according to the Wall Street Journal which first reported the offers on the home today. According to a report by the Real Estate Board of New York, sales prices of one to three family homes were up nine percent in the second quarter this year compared to last year. The median sales price borough-wide for these homes was $475,000. Prices in Astoria were up 27 percent in that period. However, prices in areas hit most severely by Hurricane Sandy including the Rockaways and Howard Beach were down by as much 30 percent.
NYC’s Premier Properties: 15 Central Park West
Luxury Listings NYCJuly 23, 2013
Condo: 12 rooms, 5 beds, 6 baths ∣ Amenities: Fireplaces, Doorman, Gym
Common Charges: $7,349 ∣ Maintenance $5,136 ∣ Listing ID: S913820
Located on the 35th floor of 15 Central Park West, this residence is the building’s only post-construction combination unit. Listed by Emily Beare, 212-726-0786, email@example.com
Wall Street JournalJuly 23, 2013
In Long Island City, a renovated property on 51st Avenue has just received several purchase offers for around $3 million, brokers say, potentially setting a record price for a townhouse in Queens. In Park Slope, a restored townhouse on 10th Street found a buyer after a single open house. It was listed for just under $2.7 million.
Sandy's impact continues for some properties such as in Staten Island's Midland Beach.
Such experiences are becoming more common in a newly resurgent housing market across New York City this year: Recent gains in other boroughs are outpacing those in prime Manhattan neighborhoods, where the market rebounded sharply last year.
A new report by the Real Estate Board of New York, an industry trade association, found that city-recorded sales of homes outside of Manhattan, including condos and co-ops, rose 13.4% during the second quarter, compared with the same period in 2012. In Manhattan, overall sales were flat in the latest quarter, the report found.
Excluding condos and co-ops, the pickup for one-to-three-family houses was even stronger. A total of 4,486 sales were recorded outside of Manhattan in the second quarter, a 20.5% increase over the year-earlier period. The largest sales rebounds were in Staten Island and Brooklyn. In Manhattan, where there are few one-to-three-family transactions, the number of sales still rose in the latest quarter.
The report found that some of the worst-performing areas were Sandy-damaged neighborhoods such as Howard Beach and the Rockaways in Queens, and Midland Beach in Staten Island. But even there, brokers say, pricing in some areas has stabilized, as bargain hunters stepped in to buy both renovated house and some still needing repairs.
The city's housing rebound has expanded outside Manhattan to Park Slope, Brooklyn.
Michael Slattery, the board's senior vice president for research, said that sales outside Manhattan slowed down sooner than Manhattan in the housing slump and were slower to recover. Instead, he said, the city pattern excluding Manhattan more closely resembles that of the single-family-home market across the country, where low interest rates and growing confidence in the economy sparked a housing recovery this year.
"Outside Manhattan the bounce back has been more recent," he said. The report put the median price of a one-to-three family house at $458,000, a price that showed that despite a stronger market, "the middle class can afford to live in New York City," he said.
In Manhattan, sales of homes selling for more than $10 million fell to 22 in the latest quarter from 40 in the first quarter and 30 in the 2012 second quarter, according to the report.
Overall, Manhattan remains the prime market driver, making up 58% of the $8.2 billion in residential transactions filed with the city in the second quarter while the borough has only 18.5% of the owner-occupied housing stock in the city.
Still, the city's housing recovery is far from complete. Real Estate Board figures show that average prices in the second quarter were still 5.5% below prices recorded in the second quarter of 2008.
But that isn't worrying Doron Zwickel, a broker at CORE with the listing for the townhouse on 51st Avenue, a prime location in Hunters Point in Long Island City. The 21-foot-wide brownstone with six bedroom, bare brick walls and oak floors was listed for $3.25 million in April.
He said that as a string of high-rise rental buildings went up near the East River in recent years, some renters have started looking for bigger homes in the same neighborhoods. With the supply of townhouses limited, prices have been pushed higher.
"Talking about buying a property for $3 million here is no longer a profanity," Mr. Zwickel said. "We have gotten tons of interest and multiple offers."
Rebekah Witzke moved with her husband and three children to a Long Island City rental from the Upper East Side last year. Working with Jonna Stark of Nest Seekers International, she has been searching for a house but says everything she has seen is too expensive or needs too much work. "The inventory is so low and everything is going so quickly," Ms. Witzke said.
In Park Slope, prices and sales are rising. The report found that the median price in the neighborhood was $1.75 million in the second quarter, up from $980,000 a year earlier. There were 36 sales recorded in the second quarter up from 24.
The house at 418 10th St. in Park Slope that listed for just under $2.7 million was 18 feet wide and was renovated with a sweeping main staircase and a fancy kitchen opening out on the garden. It went on the market in late June and immediately attracted attention.
"If you've got something nice and if it's priced right, it is going to get a lot of attention and multiple offers," said Carol Graham, a broker at Corcoran Group who has the listing. "But you still can't be stupid about pricing.”
In Howard Beach, where the storm flooded many homes, the number of sales fell sharply in the latest quarter and the median price per square foot fell 30%, according to the report.
"There was a lot of panic selling; there was a big scare factor," said Jerry Fink, a broker based in Howard Beach. But Mr. Fink said prices had stabilized and have begun to rise in some parts of the area.
"You still have a great neighborhood," he said. Now that memories of Sandy begin to receded he said some buyers see the storm's aftermath as a buying opportunity.
But on the south shore of Staten Island, where repairs on many Sandy-damaged houses are incomplete, would-be sellers are finding buyers only by dropping prices, while prices are rising in many other intact Staten Island neighborhoods.
In Midland Beach, a newly renovated house on Patterson Avenue a few blocks from the water went on the market in April for $349,000, close to what it sold for in 2009. Since then, the asking price has been cut twice to $329,000.
"Prices are very low," said Dritan Gashi, a broker with Robert DeFalco Realty who has the listing. "People are worried about Sandy, but when the price is low there is interest."
Neighborhoods: Gramercy/Flatiron – Jarrod Randolph
Luxury Listings NYCJuly 23, 2013
Q & A: What is important to buyers looking in the neighborhood and how is that changing?
Buyers looking in Gramercy Park want quality. The neighborhood has a cache because of the park, prewar co-ops and architecturally significant buildings. Even with standard new buildings like 160 East 22nd Street by Toll Brothers, consumers are willing to pay more to be close to the park, but want designer finishes in buildings with amenities.
– JARROD RANDOLPH of CORE
On the Market in New York City: 420 East 51st Street
New York TimesJuly 21, 2013
Beekman Area Co-op $1,895,000
MANHATTAN 420 East 51st Street, #12F
A five-bedroom four-and-a-half-bath with a terrace, a dining room and a washer/dryer in the Morad Beekman, a pet-friendly full-service postwar elevator building with a roof deck.
Maggie Kent, CORE (646) 342-0698; corenyc.com
New York MagazineJuly 21, 2013
One Museum Mile, 1280 Fifth Avenue, Upper East Side
Nearly a dozen lounge chairs and a barbecue area surround the pool, which is three feet eight inches deep and 18 by 35 feet long, in this Robert A.M. Stern–designed condo.
Apartment 7H, a 1,372-square-foot, two-bedroom, two-bath, facing the park.
$1.595 million; Tom Postilio, CORE.
LXTVJuly 21, 2013
This episode of Open House was hosted from 15 West 20th St., New York, NY. For more information on this property, please contact Adrian Noriega of CORE at 646-279-6104.
Modern New YorkJuly 19, 2013
Experience elegant Beekman Place, full-service living in this five-bedroom, 4.5-bathroom home, with its own private, 600-square- foot terrace and open city views. The well-appointed living room, state-of-the art kitchen and separate dining room lead to the outdoor terrace, adding to an expansive custom-designed layout that is perfect for entertaining. Wide plank hardwood floors, gorgeous wood cabinetry, custom sound and lighting features, wet bar and foyer lounge area add to the ambiance of this cleverly-designed, modern living space. There are two distinct wings of this spacious apartment, currently configured with a south-facing master bedroom, en suite master bath and an office/den with custom built-ins and en suite bath. The north wing has two large bedrooms, two full bathrooms and an exercise room. This pet-friendly building features a 24-hour doorman, lobby-accessible garage and a planted roof deck. Monthly maintenance is $8,843, with a $4000/month seller rebate for two years following closing.
The Financial TimesJuly 19, 2013
New York City’s newest neighbourhood is attracting tech companies, foodies and upmarket real estate developers.
From SoHo to NoHo, NoLIta to TriBeCa, Manhattan is an island of acronyms. One of New York’s newest is NoMad, a fashionable neighbourhood, North of Madison Square Park, which is increasingly attracting tech companies, foodies and home buyers. Not to be confused with Madison Square Garden 10 blocks to the north, Madison Square Park is a 6.2-acre emerald oasis wedged between the gallery-filled Chelsea to the west and the architecturally-important Flatiron District to the east. NoMad’s borders are not exact, though most agree that the area begins at the park’s upper edge along 26th Street and runs northward for about six blocks, dissected by Fifth Avenue, Manhattan’s most enviable address.
NoMad, a former industrial zone, is relatively new to upmarket real estate. In the late 19th century, the area was one of Manhattan’s most exclusive – a gathering spot for Oscar Wilde, Mark Twain and Theodore Roosevelt. Songwriters such as Cole Porter and Irving Berlin, along with music publishing houses, congregated along NoMad’s upper limits, earning it the nickname Tin Pan Alley.
But the 20th century was less kind to NoMad. Madison Square Park succumbed to crime and homelessness amid New York’s economic crises in the 1970s and 1980s. “The area lost its identity and became a no-man’s land,” says Debbie Landau, president of the Madison Square Park Conservancy and a revitalisation advocate.
Yet a recent Conservancy-led, 15-year, $35m restoration scheme has helped Madison Square Park and surrounding quarters such as NoMad to thrive again. Boosted by the newly-beautified park, which now offers contemporary art shows and twice-weekly children’s musical performances, private sector players began to realise NoMad’s untapped potential.
Restaurateur Danny Meyer, for example, helped establish the area’s culinary reputation with Tabla, 11 Madison Park and the haute burger venue Shake Shack, which has just opened a branch in London. Meyer was followed by chef-entrepreneurs Mario Batali and Joe Bastianich. Hotels also arrived in NoMad, such as the affordable Ace and the eponymous, higher-end NoMad, followed by tech companies such as Buzzfeed and Tumblr. Now upmarket real estate developers are set to open half a dozen high-end projects in and around NoMad within the next 18 months.
“We have huge confidence in the NoMad area,” says Steven Witkoff, chairman of the Witkoff Group, which is co-developing half of the huge International Toy Center into 125 one- to five-bedroom condominiums to be called 10 Madison Square West. “They’ve done a great job restoring the park – especially for families – while the area offers great connectivity to the rest of Manhattan.” Priced between $1.5m and about $25m, 10 Madison Square West is indicative of NoMad’s thriving real estate market – which now commands more than $2,000 per sq ft, up from roughly $1,500 per sq ft in 2010.
The price increase reflects prevailing market conditions in Manhattan – notably, the scarce housing supply. According to a report by Douglas Elliman, a real estate company, the number of available apartments in Manhattan fell more than 31 per cent in the second quarter of this year – a 12-year low. Meanwhile, prices of new-build Manhattan real estate rose nearly 31 per cent during the same period to more than $1,400 per sq ft.
With its central location and prime park access, NoMad-area agents, such as Doron Zwickel of the Core Group, suggest neighbourhood pricing could reach more than $2,500 per sq ft by the end of the year.
Zwickel is representing 241 Fifth Avenue, a 20-storey, new-build glass tower with one- to three-bedroom residences, including two penthouses priced between $7m and $8m. About 75 per cent of buyers are American, says Zwickel, with the rest from Canada, the UK, Asia and Latin America.
US buyers, including Chelsea Clinton, have also flocked to The Whitman, a former textile showroom converted into four floor-through homes starting at 5,000 sq ft and priced from $10m. Three have sold, while the 6,540 sq ft penthouse is still on offer for $25m. “The project has proven particularly attractive to affluent young families looking for a long-term base to raise their kids,” says Dina Lewis of Douglas Elliman.
Dutch developers and Dutch designers Piet Boon and Piet Oudolf are behind Huy – “house” in Dutch – a project set in a converted office tower with 58 one- to four-bedroom condominiums priced between $1m and $11m. Landscape designer Oudolf is well-regarded for his work on the nearby Highline, a mile-long elevated park built on what was once a freight railway track. Nearly 70 per cent of Huy’s homes have already been sold, many of them to European buyers.
Still, the area’s most eagerly-anticipated opening remains One Madison – a slender, 600ft tower directly on Madison Square Park which has languished unfinished and nearly unoccupied for three years. The 60-storey project went into insolvency just as construction finished but now a new ownership consortium, led by Related Companies, is completing and upgrading One Madison, which will re-enter the market this autumn. Responding to the high-end sector’s demand for larger units, the residence count has been reduced from 90 to 65 and prices will reportedly start at $10.5m for three-bedroom units.
Michael Iannacone, vice-president of Related, anticipates a heavy concentration of international buyers. “We expect buyers to move in by early 2014,” he says, “a year before many of our neighbouring new developments.”
As projects, such as One Madison, push the area’s entry point at some buildings past the $10m mark, will NoMad ultimately prove to be a sound investment? Veteran buyers such as Mexican-born banker Jaime Rodriguez believe so. Rodriguez bought a two-bedroom home on Fifth Avenue just above Madison Square Park in 2009. “I love the area’s restaurants, its central location and what I consider to be the most beautiful park in New York,” he says. What has surprised him, however, is his apartment’s appreciation in value. “People regularly offer me more than 40 per cent over the purchase price for the place,” he says. “It’s a nice increase and a tempting offer but there’s so little available in New York right now.”
Brokers WeeklyJuly 17, 2013
234 W21st St. #55
South and west-facing one-bedroom co-op in Beaux-Arts elevator building. Newly renovated with open chef’s kitchen with Sub Zero and Miele appliances, granite counters, designer tiled backsplash; spa-style, windowed bathroom with heated floors. Exposed brick, decorative fireplace, recessed lighting and Brazilian cherry wood floors. Asking price: $829,000. Time on market: 1 week. Brokers: Lindsee Silverstein (pictured) and Elizabeth Kee, CORE; Flora Resnick, Corcoran.
Brokers WeeklyJuly 17, 2013
Long Island City
11-25 45th Avenue, #2B
Two-bedroom, 2-bath home with 1, 277 s/f terrace. One Murray Park is LIC’s newest condominium, nestled on the renovated Murray Playground. Steps away from the MoMAs PS1 and the E, M and 7 subway lines, features include a doorman, indoor parking, gym, common roof deck, residents library and a bike room. Asking price: $925,000. Time on market: 8 months. Brokers: Doron Zwickel, CORE; Diane Rathjen, Corcoran.
New York PostJuly 17, 2013
Open houses have been the real estate equivalent of lions swatting each other over prey.
At 618 Dean St., in Prospect Heights, broker Rodolfo Lucchese of the Corcoran Group held exactly one open house for a two-bedroom.
“We could have put [the listing] on in the low $900,000s, but we decided on $895,000, because the owners wanted to sell it quickly,” says Lucchese. “At one open house, we got 14 offers. Within a day and a half we went to highest and best.”
The apartment now has an accepted offer above the asking price and 13 backups.
“We had 200 people at our first open house,” says broker Avi Voda of Douglas Elliman, who is selling Clinton Lofts. “We sold nine apartments in our first week.”
Townhouses are more or less the same story as condos in these neighborhoods. “I just went into contract [two weeks ago] on 402 Monroe St.,” says Doug Bowen of Core. “It was a three-family in Bed-Stuy. There were five bidders in the best and final, and the house is in contract for well over the asking price of $950,000.”
“Every house we were going to see, there were all-cash offers, bidding wars,” says Ben Fleming, who finally closed on a house in Bed-Stuy in June with his wife, Sarah Ogden. “Every offer was above whatever the asking price was.”
In May, a townhouse at 7 Arlington Place in Bed-Stuy was listed for $1.3 million and, after a bidding war, closed at $1.7 million. Last week a townhouse at 739 Macon St. in nearby Stuyvesant Heights, which was on the market for $999,000, went into contract — yes, it may have had some work done on it, but it sold last December for just $325,000 before being “polished to perfection” and re-listed.
According to data from the Corcoran Group, two-to-four-family townhouses went up an average of 36 percent in Bed-Stuy, Crown Heights, Bushwick and Prospect-Lefferts Gardens from last year.
And the price jumps are happening fast. “When we closed, [the seller’s] Realtor came up to us and said, ‘You guys got a really good deal,’ ” says Fleming, who paid $760,000 for his two-family home. “Another one around the corner just sold for $950,000.”
The most obvious explanation for the Brooklyn frenzy? Not much has been built in the last few years, and buyers have been willing to broaden their search.
“This is definitely out of the way,” says Laura Juszczak, an Upper West Sider who showed up at Clinton Lofts, looking for something with outdoor space closer to her work (she’s an assistant professor at Brooklyn College). “But I’ve not been finding anything.”
“A surprisingly large [number of buyers] are from Manhattan,” says broker Rachel Medalie of Douglas Elliman who is selling Clinton Lofts with Voda.
Toni Martin, a broker for the Corcoran Group whose listing at 739 Macon St. is in contract, says that Brooklyn has its own draw. “I have buyers wanting to move from within other boroughs and outside of NYC wanting to come to Brooklyn,” says Martin. “Brooklyn is a top-tier destination, not a second choice.”
Another part of it has to do with the fact that these neighborhoods have experienced retail booms, just like in the rest of Brooklyn.
“Franklin Avenue exploded,” says Suzanne Mattiello-De Groot, who owns a townhouse in Crown Heights (and was thinking of trading it for one in Bed-Stuy but has mostly been scared off by the prices). Franklin Avenue has gotten every important marker of gentrification, from juice bars to cocktail bars to fancy donut purveyors to restaurants like Mayfield and Taste Buds.
A final reason why buyers might be jumping into the fray right now has to do with interest rates, which have risen from 3.52 percent on May 1, to 4.48 percent on a 30-year fixed rate yesterday, according to Bankrate.com. “Buyers start to feel more pressure as interest rates fluctuate,” Barrocas says.
Along with interest rates, prices have gone up, too. Even in the space of a year, buyers have seen prices shoot up dramatically.
“Everything is more expensive,” says Marisa Rahaman, who showed up at Clinton Lofts with her husband, Brad, and their 2-month-old son, Julian. Rahaman first started looking for something to buy a year ago. “I remember thinking it sounded expensive when we saw a 1 1/2- bedroom loft in Greenpoint for $579,000. I thought it was insane. Now it doesn’t sound so bad.”
BrownstonerJuly 16, 2013
This Italianate brownstone at 105 Cambridge Place in Clinton Hill was built in 1873 by Thomas Lambert. Currently configured as an owner’s triplex with a top-floor rental, it has plenty of historic details, such as mantels, pocket doors, etched glass and decorative plaster. The listing says the house is structurally solid with well-maintained mechanicals but needs updating. There are no photos of kitchens or baths. It will be delivered vacant. What do you think of it for $2,275,000?
Tribeca CitizenJuly 13, 2013
••• 93 Worth’s rooftop addition has been unveiled. I only had my phone with me, so the photo isn’t so hot.
••• Not even one guess for this week’s Where in Tribeca…? I bet many of you have walked by it hundreds of times.
••• From the LMCCC: “This week, the city put the final touches on the new Water Street corridor streetscape. The roadway redesign stretches one half-mile, from Fulton to Broad Streets, and boosts pedestrian safety, revises traffic-lane markings, and forms new, greener public plazas. In addition to the colorful new pavement graphics, two of the most notable improvements include opening of Gouverneur Lane and Coenties Slip as the newest public spaces downtown. [...] The DOT also plans to install 27 additional, distinctive Lower Manhattan street lamps along the corridor in coming months.”
••• From the reader who goes by Hudson River: “Reliable Source sez Morton’s steakhouse is open at 90 West. Also Bill’s Bar & Burger in the Marriott is close. I saw a staff meeting in there yesterday, and the tables are set. Reliable Source sez he saw a sign that said opening Monday, but then it was gone when he walked by again.” (Eater confirms it’s Monday.)
Homeownership, the Key to Happiness?
The New York TimesJuly 12, 2013
If trying to buy an apartment in New York City has been making you miserable, consider this: actually getting that home may not make you happy.
A growing body of research suggests that spending money on real estate doesn’t necessarily mean investing in contentment. Indeed, the conventional advice to cut back on vacations, restaurant meals and other extras in order to save money for a home may actually be detrimental to felicity. Experts in happiness — an increasingly popular field focused on the scientific understanding of emotional well-being — say that people are happier when they spend money on experiences instead of material goods, whether it be a new car or a bigger apartment.
“People are making so many trade-offs in order to have that home,” said Elizabeth Dunn, an associate professor of psychology at the University of British Columbia who studies consumerism and happiness. She recently explored the impact of housing on people’s happiness while compiling studies for a new book, “Happy Money: The Science of Smarter Spending,” which she wrote with Michael Norton, who teaches at the Harvard Business School.
The recession forced many people to curb their spending habits and re-evaluate their overall lifestyles. But after saving money for years, buyers encouraged by low mortgage rates are re-entering the housing market. They find the pickings slim. In Manhattan, the number of apartments for sale for the second quarter was at a 13-year low, stoking competition and driving up prices.
Now there is research like Dr. Dunn’s, emphasizing that when it comes to your overall happiness, “there are a lot of better things you could be putting your money toward” than real estate.
This isn’t necessarily bad news in a place like New York City, where nearly 70 percent of the housing stock is rentals. And it may offer some solace to frustrated buyers facing bidding wars and all-cash offers they simply can’t top.
“People still view housing as a central component of happiness and a critical aspect of the American dream,” Dr. Dunn said. “But there is little research to support that.”
A 2011 study of about 600 women in Ohio found that homeowners weren’t any happier than renters. The study was conducted by Grace Wong Bucchianeri, then an assistant professor of real estate at the Wharton School at the University of Pennsylvania. Indeed, homeowners spent less time on leisure activities with friends and reported that they derived some pain from homeownership. What exactly caused that pain wasn’t indicated in the study, but financial experts say that people who make the leap from renting to buying can be caught off guard by the nuts and bolts.
“The reality of maintenance and repairs, and being ‘house rich but cash poor,’ can negate much of the perceived happiness people may have had about homeownership,” said Greg McBride, the senior financial analyst for Bankrate.com. Even if a low mortgage rate means you spend less each month than you did when renting, upkeep can drain a bank account faster than a leaking water heater.
What about the pleasure of living in a beautiful house in a coveted neighborhood? In a delightful screed posted in May on Medium.com, an online publishing site, Lindsey M. Green, a publicist for start-up and technology companies, writes about how even a lovely town house in a sought-after neighborhood can be a letdown.
Ms. Green moved to New York City in 2003 and sublet what she described as a “cramped, cheap, Far West Village studio.” She moved eight times within Manhattan over the course of nearly 10 years, even as her friends decamped for Brooklyn and sang its praises. “I was happy as could be as the last dinosaur in Manhattan,” she wrote.
In 2011 she moved to a two-bedroom two-bath in South Street Seaport in Lower Manhattan with her then-boyfriend, now fiancé, Lockhart Steele, the founder of Curbed.com. But in October 2012, flooding caused by Hurricane Sandy forced them to evacuate. So with all of the hype that Brooklyn was getting, they jumped at a six-month sublet in a newly renovated Cobble Hill town house.
“I could feel all the magazine headlines becoming my reality,” she wrote. “All of the ‘Best of New York’ picks in Brooklyn would suddenly make so much sense. I could become one of those people talking about how much better her life was, now that I finally made the move to Brooklyn.”
She hated it. “Moving to Brooklyn, even into a four-story town house on a beautiful block, in a neighborhood everyone loves,” she wrote, “didn’t make our lives better; it made our quality of life worse.” It didn’t matter that she was living in a lovely home — she missed the bustle of Manhattan and the sense of belonging she had felt there. As she put it: “Manhattan — its absurd inconveniences, annoyances, high rents, crowded bars and tourist-packed streets — is my yoga.”
Not everyone is crazy about Brooklyn. And at least one study suggests that the emphasis on location and physical characteristics (prewar charm, oak floors, a fabulous view) doesn’t have much bearing on our overall happiness.
As an undergraduate at Harvard in the late 1990s, Dr. Dunn, the happiness expert, experienced the annual ritual, akin to the Hogwarts Sorting Hat in the Harry Potter series, whereby first-year students are randomly assigned to spend the rest of their college years in one of 12 dormitories or houses. In a longitudinal study published in 2003 with Timothy D. Wilson of the University of Virginia, and Daniel T. Gilbert of Harvard, both of whom are known for their research on the link between decision-making and well-being, she found that freshmen expected to be much happier living in one of the more desirable — handsome, centrally located — of the 12. But those who landed in plum surroundings ended up no happier than students in less desirable houses.
It is difficult to make a connection between the happiness of Harvard undergrads and real estate contentment elsewhere. But the study indicated that by placing so much weight on the physical characteristics of the houses, including location, room size and architectural appeal, the students overlooked what ended up contributing most to their happiness — the quality of their social life.
Between 1991 and 2007, researchers tracked 3,658 people in Germany who moved to a new home because there was something they didn’t like about the old one. Although the participants reported a significant boost in satisfaction with their home for the first five years, they didn’t feel any better about their lives overall after they moved, according to the study, which was published in 2010.
“What matters for our happiness,” Dr. Dunn said, “is what we do in the minutes and hours of our day.” When shopping for a home, she recommends asking yourself, “How will this purchase change the way I spend my time next Tuesday?”
Whether you have a maple or a walnut floor won’t have a big impact on what you’re doing on an average day, she said. On the other hand, if the house has no dishwasher, you may be committing yourself to spending half an hour a day washing dishes. “That aspect of your house will change what you do with your time,” she said.
About three years ago, Dr. Dunn bought a two-bedroom with a view of the mountains on Vancouver’s West Side for roughly 550,000 Canadian dollars, or about $520,000. Moving farther inland would have meant a larger place for less money, but a much longer commute. “I can spend my time biking rather than driving to work,” she said. “That changes the way I use my time.”
Many people understand homeownership as serial trading up with a goal of arriving at some sort of real estate perfection. But that dream house may be more elusive than it seems.
“Like any possession, its impact on happiness diminishes over time,” said Ravi Dhar, a psychology professor and the director of the Center for Customer Insight at Yale School of Management. Citing a theory widely held by happiness researchers called hedonic adaptation, he said, “things give us more joy when they are first acquired than over time, as we adapt to them.”
Based on this principle, to remain happy with your home you need to move periodically. The technique seems to be working for Luis Moreno, 43, a film editor in New York. When he arrived in Manhattan in 1992 after graduating from college, he shared a two-bedroom with five roommates. “I got the dining room and had a sheet for the door,” he said, “but I felt like I made it, because it was my first place in New York.”
Like many young professionals, he went through a series of rentals, more crash pads than true homes.
In 2001 he paid $245,000 for a sunny corner one-bedroom at the top of a sixth-floor walk-up in the West Village. “I loved that apartment,” said Mr. Moreno, who moved to Texas in high school from Venezuela. And seeing his name in the New York phone book for the first time was a thrill. But whenever friends or family visited, it meant hauling suitcases up five flights of stairs. So in 2003, he upgraded to a two-bedroom one-bath in an elevator building. Then he found sharing a bathroom with guests wasn’t ideal.
That took him to Philip Johnson’s Urban Glass House on SoHo’s western fringe, where in 2007 he bought a two-bedroom two-and-half-bath apartment for $2.35 million. Not only did the place have that extra bathroom and a clean modern aesthetic bathed in tons of light, but it also represented the success he had always dreamed of achieving.
“That made me happy,” he said. “It cemented me feeling like I belong in the city, and I was able to make it happen here for myself.” He felt as he had when he had found his name in the phone book all those years ago. “It was that kind of thing again,” he said.
Yet, as his business grew, and his work continued late into the evening, he realized he needed a larger place with a dedicated home office. In March, he listed his two-bedroom place for $2.7 million with Ryan Serhant, a broker with Nest Seekers International who appears on Bravo’s “Million Dollar Listing New York.” It quickly went into contract for $2.65 million, and he put a down payment on a three-bedroom duplex with a terrace at 93 Worth, a luxury condo conversion under construction downtown. “It’s like a house,” he said. “I will hopefully never have to leave, and that feels great.”
Moving is a headache, it’s true. But maybe Mr. Moreno will succumb to hedonic adaptation or the midlife urge to downsize.
Buying a home is still considered an important step on the ladder to personal fulfillment. But Dr. Dunn isn’t convinced ownership is all it’s cracked up to be. “A very robust finding in psychology is people are highly motivated to justify their own choices,” she said. “It’s very hard to get people to admit they spent hundreds of thousands of dollars in a way not optimal for their happiness.”
The Wall Street JournalJuly 11, 2013
Spurred by tight inventory, developers in cities like New York and Miami are demanding, and getting, millions for homes that have yet to be built
One real estate developer hired a drone; another displayed life-size sculptures of polar bears. A third charged potential buyers $100,000 just to take a peek at the floor plans. The common goal: selling something that doesn't exist.
Spurred by tight inventory and plenty of interest from foreign buyers, real-estate developers in cities such as New York and Miami are reviving the boom-era practice of pitching new buildings months—and even years—ahead of completion. Miami's Faena House, a planned 18-story tower, is still pouring concrete at the condo's basement level. Yet the project, part of a newly developed strip that will include a five-star hotel and an arts center by Rem Koolhaas's OMA design firm, already has 50% of its 47 units under contract, according to Alicia Goldstein of Faena Group. Buyers are required to put down a 50% cash deposit on the apartments, which range from $2.5 million for a one-bedroom to $50 million for the full-floor duplex penthouse.
At 56 Leonard in downtown Manhattan, which is being designed by Pritzker Prize-winning firm Herzog & de Meuron, 80% of the 145 units were under contract since presales launched in March. According to co-developer Izak Senbahar, a penthouse has gone to contract for $47 million, a record for downtown Manhattan if the deal closes. One57, one of the most expensive projects in Manhattan, won't be completed until 2014, but 70% of its 92 units are already taken, and total sales are expected to exceed $2 billion.
"Today we see presales as early as two to three years away from completion," says Kelly Kennedy Mack, president of New York-based Corcoran Sunshine Marketing Group, which runs marketing and sales for projects similar to 56 Leonard.
It is a contrast to the first years after the housing bust, when would-be buyers grew leery of presale offerings after some high-profile developments stalled during construction, leaving early buyers in the lurch. In Manhattan, the practice of selling out buildings on plans alone had all but disappeared three years ago, says Jonathan Miller, president of appraisal firm Miller Samuel.
But now that buyers are returning to the market, they are confronting historically low inventory levels, making presale offerings an increasingly attractive option. In the second quarter of this year, there were 4,795 units for sale in Manhattan, the lowest second quarter on record in at least 13 years, Mr. Miller says. Sales volume, on the other hand, has risen almost 19% compared with the same period last year. In a rising market, buyers are less fearful of a building going bust—and can look to presales as a way to "lock in" a lower price point.
At the same time, New York developers are contending with stricter criteria for securing loans. Lenders typically now require that a building sell at least 50% of its units or some comparable benchmark before a construction loan is completed, according to Frances Katzen, a managing director at Douglas Elliman. In South Florida, where few of the proposed towers have traditional lender financing because banks and big investors are still spooked from the bust, presales are even more critical. The large cash down-payments demanded of buyers are used to fund most of the development's construction.
That is where the marketing comes in. Michael Namer, the CEO of New York-based Alfa Development and the developer of Village Green West, takes a showman's approach. In March, his pop-up art gallery in Chelsea hosted artist Oscar Dotter's "Nordic Pop" exhibition, which included paintings and two life-size sculptures of polar bears. Mr. Namer says the goal was twofold: to raise awareness for the plight of the polar bear, and to showcase Chelsea Green, a 14-story, 51-unit green-energy building that he is developing. It is slated to open later this year, but was nearly sold out by the time of the exhibit. (Mr. Dotter, the artist, says he bought a two-bedroom unit in Chelsea Green for $2.1 million and says it would now list for $800,000 more than he paid for it.)
At 35XV, a condo to be built in New York's Flatiron district, the pitch includes a view from the top. While the 24-floor project is only built about halfway up, so a "little baby helicopter" was commissioned to snap photos of the city skyline from different levels of the planned tower, says Kenneth Horn of Alchemy Properties. The images are compiled into a video package played on loop at the off-site sales office, he says, where a model kitchen and bathroom also await prospective buyers.
The building is about 50% under contract, and Mr. Horn says it has already raised prices twice, with prices for one-bedrooms now starting at over $2.2 million, up from around $1.5 million. He says his firm expects the building to sell out before it opens in August 2014.
Marketers of the Porsche Design Tower in Miami, which is scheduled to open in early 2016, created an aura of secrecy. There was so much interest in the building's planned car elevator, which lifts tenants' cars directly to their units, that Dezer Development charged interested parties a $100,000 refundable deposit just to see the floor plans. (The ploy got them about 33 buyer commitments before the presale office even opened, says owner Gil Dezer.)
Once the off-site sales office opened, though, the company felt it needed a better way to help buyers visualize their apartments, which range from $4.8 million for a 4,800-square-foot unit to $32.5 million for a 17,000-square-foot penthouse. "When you start showing duplexes on floor plans, people get confused," Mr. Dezer says. So they made four replicas of different apartments and the lobby encased in four-by-six-foot glass boxes at a cost of $250,000. The décor and furniture was designed by Michael Wolk Design Associates and was crafted in miniature by MYP Maquetas, a Mexico-based model-making company. Currently 89 of the building's 132 units have been sold for a total of $535 million, Mr. Dezer says.
The Porsche Design Tower required a 30% down payment, which is lower than usual for Miami. This is because the developer plans to secure lender financing, taking some of the onus off buyers. While buyers can usually finance the balance of their purchase once their unit is completed, veterans say the vast majority of luxury presale buyers pay for their units in cash. The stiff cash requirements means buyers are betting, heavily, that their units will be completed to their liking—and that the development will be a success.
According to Jack McCabe, CEO of McCabe Research & Consulting, an independent real-estate analysis company in South Florida, buyers are only entitled to a fraction of their down payment if the project sours. Litigation can be onerous; many lawsuits from the last housing bust are still pending. The vast majority of new condo buildings after the bust saw individual or class action lawsuits from contract holders trying to recoup their losses, Mr. McCabe says.
Peter Zalewski, founder of the real-estate consultancy Condo Vultures, notes that foreign investors are more used to large cash deposits than U.S. buyers, so the large down-payment requirements are better tolerated. "Right now, it feels like 2003 in South Florida," he says, recalling the boom years.
Not all developers are on board with such an early presales strategy. "A lot of developers leave money on the table if they sell too soon," said Shaun Osher, CEO of CORE, a brokerage in New York. Mr. Osher says his company will only market a building a year out from completion, otherwise it risks underpricing the units. And should the still-fragile market take another drop, he warns that overly optimistic developers could end up with another bust-era dilemma. "Buyers would sooner lose their deposit than close on a devalued unit," he says.
Brokers WeeklyJuly 10, 2013
Tom Postilio and Mickey Conlon at CORE just sold a pre-war apartment near Central Park in seven days.
Unit 5C at 100 West 58th Street sits near the south entrance of Central Park.
The 1,104 s/f, two-bedroom home is in The Windsor Park, a newly converted condominium.
Real Estate WeeklyJuly 10, 2013
The crowd at the 18th Annual Artists Against Abuse Gala Fights Domestic Violence gala included a host of local real estate brokers, including sponsors from Douglas Elliman whose Eileen Ekstract (DE Bridgehampton Office) is the Art Chair for the gala. Held at The Ross Lower Campus in Bridgehampton, the night featured a silent and live auction to raise funds for The Retreat’s services for domestic violence victims. Oksana Grigorieva was the guest speaker as a victim of domestic violence and one who has worked with domestic violence agencies like The Retreat all over the country.
Brokers WeeklyJuly 10, 2013
CORE's Reba Miller has this one-of-a-kind Upper East Side loft available for the first time to buy. Unit 10AB at The Leonori, a converted Beaux Arts building at 26 East 63rd Street, is a 3-bedroom, 3-bath home one block from Central Park.
HGTV Front DoorJuly 08, 2013
If you're someone who appreciates homes with ingenious, space-saving features, we highly encourage you to check out Colin Cowie's Flatiron penthouse, which is on the market for $5,750,000. The wedding guru/event planner/interior designer, who currently hosts Lifetime's Get Married, purchased the top two floors of The Emory building in 2007, pre-construction. He then created a 3,000-square-foot duplex filled with thoughtful customizations, from an expandable kitchen countertop to lots of hidden storage to an informal dining room that converts into a formal dining room (for more on that, see our photo gallery). The unit comes with two bedrooms (one of which is currently used as an office), two-and-a-half baths, a key-locked elevator, plus 900 square feet of private rooftop terrace. The listing is held by Emily and Elizabeth Beare at CORE Group.
CurbedJuly 07, 2013
Welcome to the Brooklyn Townhouse Roundup, where we—you guessed it—take a look at the most notable Brooklyn townhouses to hit the market over the past week.
This week, we've got three townhouses in various states of repair and quality. The good news is, they're all asking under $3 million. Starting in Clinton Hill, this four-story townhouse was built in 1873 and has original details and a beautiful garden that has apparently been on the Clinton Hill Garden Tours. It's asking $2.275 million, though it definitely needs some work.
New York PostJuly 03, 2013
Star saxophonist David Sanborn, known for his collaborations with David Bowie, the Rolling Stones, Paul Simon, Stevie Wonder, Eric Clapton and other music giants, has put his stunning Upper West Side townhouse on the market for $12 million.
The 19-foot-wide brownstone at 135 W. 69th St. is fully renovated. It has five bedrooms, three full bathrooms, two half-bathrooms and a separate recording studio on the top floor. There’s also a chef’s kitchen, four wood burning fireplaces, a terrace and a private garden.
Brokers Shaun Osher, Tom Postilio and Mickey Conlon of Core declined to comment.
Sanborn, a six-time Grammy winner, has released 24 albums, with eight going gold and one platinum.