Woody Heller is a broker’s broker. He is one of the most successful and well respected commercial brokers in the industry. He is executive managing director and group head of the capital transactions group at Studley. I had the pleasure of speaking with him about the challenges in the market,  where we might be headed, and his insight as a broker.

“What kind of discounts can I really get in today’s market?”

“I want to buy in a new-construction condo.  Is it a good idea?  Will I get a loan from a bank?”

“I read in the news that it’s really hard to get financing—is it true?”

“The Case-Shiller housing index seems to portent the end of the real-estate free-fall, but unemployment is still up in New York, and the stock market is gyrating.  Where do you think the market is going?”

For these and other good questions you may have, come to an expert roundtable discussion, where Caroline Grane and Arthur Hung, 2 of Downtown’s most accomplished brokers, and a top mortgage professional from Bank of America will help you separate the wheat from the chaff.  All in a casual setting, over fine wines and appetizers, at CORE’s elegant new flagship retail space at 127 Seventh Avenue (at 18^th Street).

Date: Wednesday, October 21, 2009

Time: 7:30 – 8:30 PM

R.S.V.P. requested, but not required, to ahung@corenyc.com.

The bottom is staring you in the face

Hindsight is not always 20/20………. and it’s amazing how quickly things turn. For better or worse.

It has been 2 years since the sub prime mortgage industry credit crunch rippled through the globe.

It has been 18 months since the collapse of Bear Stearns.

It has been a year since the fall of Lehman Brothers.

The Manhattan residential market has lost almost 50% value in some sectors since its peak in 2007. A drop that came quicker and more dramatically than ever before. Yes, even more than Black Monday 1987.

Crains’ Amanda Fung covered a story yesterday about the recent activity over the summer. My opinion is that the value of the market has levelled off, and once banks start lending again (hopefully soon), the velocity of deals will pick up. 

Next year this time, there will be a number of people who will be saying “I could have…………. I would have……….I should have!”

This morning I spoke with Erika Schnitzer from Multi-Housing News and gave her my opinions about where the market is, and might be going. Read the story here.

Going up or down?

It seems as if every time I open the paper or go online there’s a story about how terrible the real estate market is and how we’re all doomed! Well, the mass media has been waiting to cover this story for many years. Some even wrote about the crash 5 years before the market peaked. Could they have had that much foresight? (See the definition of sar-casm in Webster’s).

Just this week alone NY Magazine published a story about “The Bust of Williamsburg” and The Observer covered the “Condo Doom” of all the supposed stalled projects in Williamsburg and Greenpoint. I know of a few of these mentioned that are far from stalled! The line between news and entertainment seems more blurry than ever.

On the other side of the coin, I find it interesting that the talk amongst my peers seems to be of rebound and exciting opportunity. Some are even Twittering RT@Corcoran_Group CEO Pam Liebman: “In June, Manhattan had 11 deals over $5M. Brooklyn had numerous sales over $1M & several townhouse sales in Cobble Hill” and RT@Corcoran_Group Corcoran CEO Pam Liebman: “There has been a LOT of pent-up demand that couldn’t wait anymore to take advantage of lower (home) prices.” and RT@Halstead Get em’ while they’re hot! Brooklyn Brownstones are flying off the shelf!

I am most intrigued by those who have no agenda. Matthew Barron is one of those people and he releases a monthly newsletter called Perspectives. This month he contends that “the current environment is the perfect time to consider investing in NYC real estate”. Read more here… Perspectives July 09.

Which sign to follow?

Second quarter Realtime Report is released…….

Looking back over the past six months of market activity, it is clear to see that we are in a stage of absorption recovery, yet further price weakness. This has been the fastest market adjustment we have ever seen in the city and it is clear that Manhattan has not been immune to the effects of the national housing market and weakened global economy. The last three months of 2008 had the lowest deal volume for decades, and perhaps historically. Even the post September 11, 2001 market activity decline was brisker than the decline we are currently facing. January 2009 had fewer than 200 new contracts signed in Manhattan, but since then, the deal activity has consistently increased across the board. June had more than four times the volume of new contracts signed than January. On average, the market is selling close to 40% lower than its highs from 18 months ago. In the past six months, we have seen new contracts being signed at consistently lower prices. The weakest part of the market continues to be the luxury market (3 bedrooms and larger) and even though we see a slight increase in contract prices, there are still very few larger units purchases being negotiated. There are small signs of a recovery, but it is unclear if this is seasonal, pent up demand from no activity, or buyers starting to recognize that this is clearly their market, and they are beginning to taking advantage of the opportunities that exist. As prices have continued to decline, there is a sense that we are nearing a bottom, although the timing of a turnaround is uncertain. Thanks CNBC for taking note.
June 09
June marked the lowest prices for contracts signed in studios, one and two bedroom apartments. Prices continually decline from original asking price to contract signed prices with similar decline rates, however the original asking price in smaller units has repeatedly dropped. However, in June we saw a boost in 4-6 bedroom home prices which marks the first increase in this category in 2 months.
Neighborhood Data – Q2
The second quarter of 2009 revealed some interesting neighborhood data. The East Village saw a major surge in larger apartments being sold as well as an increase in prices. In Soho there was a shift from the beginning of the quarter where we saw smaller units going into contract to June where we saw larger units going into contract and higher prices for the three and four bedrooms. Chelsea gained sales in larger unit sizes but saw a decrease in contract signed prices steadily over the quarter.
3 Month Comparison
Contract signed prices decreased in June in studios, one, two and three bedroom apartments but increased in four, five and six bedroom apartments. This coupled with the fact that June was the strongest month thus far in volume of contracts signed for the second quarter (and first quarter) of 2009 illustrates that buyers are purchasing and sellers are pricing their properties at a level the market will bear.
Volume of contracts signed for June is the highest it has been all year and is up dramatically from April. One bedroom apartments still rank the highest in total number of contracts signed each month which has maintained a steady incline month to month. Each neighborhood showed an increase in contracts signed in June with the exception of Battery Park City, Clinton and the Financial District.
The only significant change seen in days on the market by unit size is that the four bedroom apartments were on the market an average of almost 100 days more in June than in May. The Flatiron District saw both the longest and shortest number of days on the market this quarter with an average of 282 days in April and 123 days in June.
Q2 09 Inventory
Availability for resales in the second quarter of 2009 saw an overall decline in available units on the market. This could be because people are not willing to sell their current home at the values of today. New development availability continues to change as some new developments have sold out and closed in recent months while few have been brought to market. We see consistency in the financial district where it seems the same buildings have been available for the entirety of the second quarter. June saw a surge in contracts signed at new developments across the city for the first time this quarter (and year). With 85 contracts signed in new developments in June, this marks the highest margin above the previous high in February of 49.