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Is This Finally The Right Time To Buy?

The low interest rates and foreign buying craze of the past few years led eager developers to build… a lot! Now, with interest rates creeping higher, new tax laws, and more hesitant foreign investors, inventory is surging ahead of demand in some neighborhoods.

The greatest oversupply, and commensurate sinking prices, has hit the luxury market (the top 10%), with prices off by around 15% from those originally projected. This has sparked a shift to ‘affordable luxury’ development (under $2,000/sq ft), which may end up simply shifting the oversupply.

Where is inventory piling up?

The neighborhoods with the greatest amount of new condos on, or coming on the market in the next year, are the Financial District, the Lower East Side, the East Village, and the Far West Side (Hudson Yards). Along Billionaire’s Row on 57th Street, new development is slowing as some early investors are seeking to cash out before their property is no longer hot.

Which neighborhoods are the exceptions?

Flatiron, Lenox Hill, and the Upper West Side all share a relatively low level of existing condo inventory and few new developments coming on the market in the near future, resulting in more stable prices and less sluggish sales.

The most balanced supply/demand markets for new condo sales are in the West Village and Greenwich Village, both having a high percentage of landmarked areas which preclude development. Also, properties that can be developed in these neighborhoods tend to be smaller, resulting in smaller projects.

What does this mean for the buyer?

The sense of urgency that has been in place for the past few years has dissipated. Buyer’s are feeling more relaxed about timing for putting in an offer, and more comfortable bidding under the asking price. This slowing has trickled down, to varying degrees, to all segments of the market, including co-ops.

Now is a good time to explore, as there is a lot out there to choose from, and developers are eager to make a deal. At Spark Realty, we can help navigate the many options and help you figure out whether this is the right time for you to get your slice of the apple.

What Building Size Is Right For You?

 

When choosing between a small, intimate building or a large doorman building, there are many factors to consider. A small, cozy building may offer a feeling of privacy, but may likely require an increased demand on time, since buildings with a small number of units are often self-run. A larger, and newer building may be loaded with amenities, but that benefit is offset by a smaller apartment. There are pros and cons to different building size and type. Which is right for you?

 

Small – up to 10 units:

– Many small buildings opt for self-management, saving the cost of a Managing Agent. Instead, owners contribute their time and energy towards the maintenance of the building. This not only saves money, but also allows decisions and processes to be effectuated more efficiently.

-Owners in small buildings are happy to not pay for services and amenities that they feel they don’t need or want.

-Small buildings are appreciated for their homey feel.

-The lack of doormen in small buildings can afford a greater sense of privacy.

 

Large – over 30 units:

-The Managing Agent and the Board take care of everything. Owners pay their common charges/maintenance, and don’t worry about anything else.

-The costs of maintenance, emergencies, and taxes are spread among a large number of people, reducing the financial burden on any one owner. Also, if someone defaults on their common charges, it’s a very small percent of the building revenue that is lost.

-Large buildings often offer more amenities (gym, resident’s lounge, roof deck, garage). Many newer developments have made a large investment in amenities, offering indoor pools, movie theaters, health clubs, and more.

-The increased common square footage in these developments comes at the cost of decreased square footage in the units. This is well worth it for a purchaser who plans on spending a good amount of time outside the apartment using the common amenities.

-There is usually a doorman who accepts packages and maintains security. Staff will include a live-in super, handy when the toilet overflows, or there’s a drip from a faucet.

Medium 10-30 units:

-Medium size buildings may have some amenities and services such as a doorman and live-in super, possibly a small gym or lounge, but will typically lack the frills that raise the common charges even higher (pool, theater, etc.).

-These buildings can still achieve a more intimate feel, while also providing enough owners to help share the burden of maintenance. i.e. a new roof divided over 25 units will cost less for each resident than a building with 4 units.

 

Townhouse – single and two family:

-In a townhouse, you are the king of your castle. You can make any changes you want (with city permits, when applicable). You can move bathrooms and kitchens. You don’t have to collaborate with or get anyone’s permission, except the building department.

-You can play your drums to your hearts content! Of course, that is, if your walls are thick enough and the adjacent neighbors don’t complain.

-You are solely responsible for maintenance, so while you aren’t paying a monthly common charge, you will need to have money available for ongoing maintenance and eventual repairs.

-You are also solely responsible for compliance with city ordinances – snow shoveling, garbage disposal, etc.

-Townhomes are often zoned for either single family or two family. For single family, it is illegal to rent out a portion of the home. This designation can be changed, but it’s a long, complicated process. So, if you are planning to do this, it’s probably a good idea to look at 2 family homes. The rental income is often welcome to help pay the mortgage.

-A two (or more) family home, on the other hand, can be converted more easily into a single family home. This is the trend today, and fetches a higher return on resale.

 

Before making any purchase, it’s a good idea to explore the various building types. At Spark Realty, we are happy to guide your exploration and help find the right fit for you.

 

Coming to NYC in 2018!

Happy New Year and welcome to reductions in deductions for state and local taxes, mortgage interest taxes, and property taxes! After calling your accountant, get out and explore the newest additions to our city that make it worth a little extra.

 

Hudson Yards

The first phase of this complete neighborhood at the top of the High Line will open to the public this year. It will include a Spanish Food Hall and a public square with a centerpiece of a massive steel sculptural Vessel, which will feature 154 interconnecting flights of stairs and 80 landings.

 

The Market Line

As part of the new Essex Crossing development on the Lower East Side, this soaring, light-filled, landscaped underground market was conceived to echo La Boqueria in Barcelona and Pike Place Market in Seattle. It will debut with tons of local vendors, a beer hall, a farmer’s market, and retail. It will also be the new home of the popular Essex Street Market.

 

Brooklyn Parks

Prospect Park becomes permanently car-free as of this month after a wildly successful pilot program last summer. New parks will be unveiled across Brooklyn this year: Domino Park, along the Williamsburg waterfront, Pier 3 Greenway Terrace in Brooklyn Bridge Park, and Greenpoint’s waterfront esplanade are all on schedule to open to the public by summer.

 

Museum Exhibits Celebrating New York City

At the Museum of the City of New York, the architect responsible for so many elegant pre-war buildings is celebrated in “Mansions in the Sky: The Architecture of Rosario Candela” (May 17 – September 23). The official photographer for Madison Square Garden captured many defining moments in the city’s history, and “New York Through the Lens of George Kalinsky” at the New-York Historical Society (February 2 – June 3) shares these iconic moments. “Waterfront” at the Brooklyn Historical Society/Dumbo (opens January 20) is a multi-media experience that recounts the vibrant history of the Brooklyn waterfront.

Stay warm and have fun!

Off-the-Radar Holiday Season Fun in NYC

The usual NYC holiday activities are well advertised, but there are some exciting adventures reserved only for the well informed. The fantastical window displays, especially at Bergdorf Goodman, Barney’s, and Tiffany, are a must. Then try some more hidden alternatives for a celebratory outing in NYC during the holiday season.

Adventsingen/Christmas Caroling at Zum Schneider

This cozy east village German beer bar/restaurant hosts a friendly and raucous sing-along accompanied by a guitarist and the owner on a hammered dulcimer. Highlights include a set of German carols (they have song books, so you can just belt your heart out with words you don’t understand), Leonard Cohen’s Hallelujah, and a competitive round of 12 Days Of Christmas.

Adventsingen happens on Sundays in December. This can be a full day activity, or you can show up around 4:30pm when the crowd thins a bit and join in then. To get a seat and enjoy the delicious German fare in this tiny space, a line starts around 9:00am, doors open at 1:00, and singing starts at 3:00. Only one person need stand on line for your group, but everyone needs to be there by 1:00.

Industry City

This industrial-cool complex in Brooklyn is so much fun to explore and hosts a barrage of holiday activities including Renegade Craft Holiday Fair, Pop Up Holiday Market, Holiday Family Maker Workshop. It’s also the winter home of Brooklyn Flea. Thrillest is hosting a weekend-long Holiday Hideaway December 15-17 with special offerings from many of Industry City’s famous food vendors, live music, holiday movies, and more. While you’re there, find the Industry City Distillery, open Fridays and Saturdays 4:00-10:00.

230 5th Avenue Rooftop Bar

What better way to top off a long day of taking in the season than inside an igloo-shaped tent on a rooftop overlooking the city! All this can be had at New York City’s largest rooftop garden, as well as delicious spiked ciders and winter martinis. Try to go on off hours for the best chance of snagging an igloo.

 

Whatever you do, we wish you a wonder-filled holiday!

Parents Purchasing for/with Children

Rent contributions to help an adult child quickly add up, leading many parents to wonder if it may make more sense to purchase an apartment. In NYC, where the real estate market has maintained its investment appeal over time, for parents who are willing and can afford it, purchasing often does make sense.

At what point does it make sense to buy?

This depends on how long you plan to own the home. During that time period, the cost of owning a home versus the cost of renting a similar home is the metric most commonly used to understand when it makes sense to own rather than rent. Generally, in NYC, if you plan to own the property for at least 5 years, then it may make financial sense to buy.

The cost of ownership includes closing costs on both the buying  and selling ends; property taxes and common charges (or maintenance fees in a co-op), mortgage principal and interest, homeowner’s insurance, and renovation expenses. The cost of renting includes monthly rent, fees, and rental insurance.

The bonus of ownership is the potential appreciation of the value of the property over time – the longer the period of ownership, the more the value of the property is expected to increase. Additionally, there is a tax deduction for mortgage interest and real estate taxes that does not exist for rentals. Often, the monthly outlay is similar after the parents have contributed to, or provided, the down payment.

Condo vs. Co-op

The purchase of a co-op is less costly than a condo, but comes with restrictive rules on how it can be both purchased and used. Although every co-op has it’s own rules, most do not allow purchase by a trust or LLC, and some do not allow co-purchase or a guarantor. Sponsor co-op apartments are the exception. Since there is no board approval process, these can be purchased in any form, but once purchased, all co-op rules must be followed. Condos, while more expensive, can be purchased under any scenario and there are less restrictions regarding the use of the property.

 

How to structure the purchase

Many parents purchase a property themselves, allow their children to live there for a few years under agreed-upon terms, and then keep it as a pied-a-terre. Others help their children purchase the property in their children’s name, or purchase jointly.

 

Co-Purchasing

When parents and the child purchase the property together, they will each need to fill out a purchase application and attend a Board interview for a co-op. Co-ops generally prefer this scenario over purchasing in the parents’ name for the child’s use, given that the child will be the one living there.

 

Guarantor

In this scenario, the child is the sole purchaser, but the parents guarantee the payment of the maintenance or common charges, and most likely the mortgage as well. If the child fails to stay current with payments, the building and the bank can go to the parent guarantor for payment. In most cases, the parent will also need to complete an application.

 

Gifting

The parent has the choice to retain ownership as an investment or a future pied-a-terre, gift the property to the child, or own it jointly through a family trust. If the child will be the owner by way of a gift, the parent submits an Affidavit of Gift, but typically is not required to submit an application. A percentage of the down payment or purchase price can also be gifted this way. In most cases, after the down payment, the child’s debt to-income-ratio and post closing liquidity must still meet the financial qualifications of the building.

 

At Spark Realty, we work closely with parents who want to help their adult children purchase a home in the city. As always, we are happy to answer any questions that may be unique to your situation. To explore these options in more detail, please contact us at [email protected]

 

 

What’s Up With NYC’s Supertall Skyscrapers

Is the end in sight for the supertall building boom that is transforming the NYC skyline?

 

Steinway Tower at 111 W 57th Street will be the skinniest supertall

 

What is a supertall?
The NYC skyline has changed markedly in the past few years, most notably by the supertall skyscrapers that have been popping up. To qualify as a supertall, a building must reach over 984 feet high. Besides The Chrysler Building and The Empire State Building, which both qualify, 5 more have been completed so far, including One WTC, The Bank of America Building, The New York Times Building, 432 Park Ave., and One57.

 

Luxury residential tower 432 Park Ave pierces the midtown sky

 

 Super Skinny
432 Park Ave. and One57 are examples of the super skinny supertall residential trend. While zoning regulations restrict the square feet of a building, they don’t currently restrict the height. Developers can charge a huge premium for the exclusivity of the panoramic views afforded by this type of construction. The ultra high-end luxury residential buildings just south of Central Park that have commanded record-setting prices of up to $11,000/square foot, have fallen off of late – One57 had 2 foreclosures recently.

 

More supertalls on the horizon
9 more supertalls are currently under construction in Manhattan. One Vanderbilt at Grand Central will be a 1,401 feet office tower with a public observation deck. 111 West 57 will sit atop the beautifully restored Steinway Building and will have the distinction of being the skinniest supertall, narrowing as it rises until it seemingly disappears into the sky at 1,421 feet. There are also 8 proposed developments including Brooklyn’s first supertall at 9 DeKalb Ave., and yet another ultra luxury residential building at The Helmsley Park Lane on Central Park South, which faltered with the luxury condo market, but may be back on track now. Of the many buildings that will make up the Hudson Yards development, 5 will be supertalls, while only 3 of the World Trade Center buildings will qualify.

 

Construction underway at Hudson Yards will include 5 supertalls

 

Proposed 9 DeKalb Ave. in Downtown will be Brooklyn’s first supertall

 

Taking it down a notch…
Preservation-minded New Yorkers have become concerned with the effect that supertall buildings have on light, air, parks, and other public assets. The Municipal Arts Society and many elected officials are supporting demands by some local Community Boards to put a cap on building heights and change the approvals process to require community input and public review as opposed to ‘as of right’ on any building that would significantly increase height or bulk on a given lot. Caps of between 260-600 feet have been proposed in various neighborhoods.

 

Whether you aspire to float in the clouds or plant roots in a backyard garden, we would love to help you find home. Shoot us an email or give us a call any time!

 

A Streetcar Through Brooklyn and Queens?

Rendering of proposed streetcar at Brooklyn Navy Yard

The proposed Brooklyn Queens Connector, or BQX, would travel 16 miles along the East River waterfront from Astoria to Sunset Park. Designed as a state-of-the-art rail system, it would run emissions-free and in dedicated lanes on tracks that are flush with the existing roadway. If community outreach (which has already begun), approvals, bids, etc. go smoothly, ground breaking can happen as early as 2019, with a possible finish date of 2024.

The 16-mile route of the proposed BQX

 

Shorter Travel Times

A trip from Astoria to Williamsburg, which now takes an hour, would take less than half an hour. Travel time from Dumbo to Williamsburg would be reduced by over half an hour. The new BQX streetcar would run 24 hours a day and at 5 minute intervals during peak hours.

 

Access To ‘Transit Deserts’

The BQX would provide access to ‘transit deserts’, isolated neighborhoods, such as Red Hook, the Brooklyn Navy Yard, and the Astoria waterfront.

 

Fabulous Places to Jump Off (From South to North)

Industry City – Sunset Park – This converted industrial complex is home to many designers, creators, and innovators. It also offers parties, dining, retail, and plenty of arts to explore among its massive buildings and landscaped courtyards.

 

Hometown Bar B Que – Red Hook – It is a truth commonly acknowledged that Hometown Bar B Que has the best BBQ in the city. Even though it’s hard to get to now, don’t wait for the BQX. Go, then dream about it for a few years until it’s easy to reach.

 

Wegmans at the Brooklyn Navy Yard – between Fort Greene and Williamsburg – Coming in 2018, this mega supermarket is everyone’s favorite supermarket. Seriously, people plan an outing to Wegmans for fun. You’ll see. The Brooklyn Navy Yard is home to hundreds of creative businesses and will soon also be home to a food hall anchored by quintessential appetizing shop, Russ and Daughters.

 

Transmitter Brewing – between Greenpoint and Long Island City – Tucked under the bridge that joins these 2 neighborhoods, a former auto garage is now home to this small, but noteworthy, brewery. Transmitter makes award winning farmhouse ales, and the picnic tables outside its tiny tasting room fill up quickly.

 

Socrates Sculpture ParkAstoria – This park on the East River was designed specifically for large scale sculpture and multi-media installations. It strongly encourages visitors to interact with the art, and always delivers a memorable experience.

 

Invest in An Underserved Neighborhood Now

If you are interested in exploring some of these underserved neighborhoods before the BQX possibly becomes a reality and values rise, shoot us an email or give us a call.

 

 

 

 

How is the Manhattan Real Estate Market Doing?

 

 

While the market remains strong, with prices up 4% over the past year and an increase in the number of closings this quarter, bidding wars are not as commonplace. Properties that have sold in the first quarter of 2017 have spent an average of 95 days on the market, the longest in the past 4 years. Sale prices, correspondingly, have also dipped slightly to 97.8% of the asking price.

 

Coops

The average price per square foot for coops in Manhattan in the first quarter of 2017 was $1,263, up 4% from a year ago. The strongest increases in price per square foot have been in the East Village, Gramercy/Kips Bay, Murray Hill, and Hell’s Kitchen. Resale Coop average price changes over the past year were inversely related to their size; whereas the average sale price of a studio, 1, or 2 bedroom increased, the average sale price for a 3+ bedroom declined by 10%.

 

Condos

The average price per square foot for condos in Manhattan in the first quarter of 2017 was $1,724, up 5% from a year ago. The price increases were strongest in the East Village, the Financial District, Midtown East, Tribeca, the Upper East Side, the Upper West Side, the West Village, and Inwood.

 

New Development

The average price per square foot for new developments is up 7% from a year ago, to $2,161, with the strongest market for new development in the first quarter of 2017 focused below 14th St.

 

Townhouses

The Manhattan townhouse market saw a dip in both volume of sales and price. The average price per square foot dropped 6% to $1,340. The exception for the first quarter of 2017 was the Upper West Side, which showed a 25% increase in average price per square foot to $1,446 and an increase in volume from 10 to 14 sales. While not as high as pre-2016 prices, these statistics are promising for sellers going into the spring market, while the increasing inventory creates leverage for buyers.

 

Fort Greene


 

Fort-Greene-300x200Fort Greene is the quintessential NYC neighborhood. It’s where neighbors congregate on well-kept stoops, walk over to the park for a game of hoops or to the outdoor market-cum-old fashioned town square, maybe hit up a sidewalk café for a bite afterward, and then reconvene back on the stoop to review the day’s events. On these stoops can be found a broad spectrum of socio-economic and ethnic diversity, making Fort Greene one of the most well rounded neighborhoods in the city. From young families looking for more space, to professionals seeking a nice neighborhood and a short commute, to successful and not yet successful artists, to long-time residents who contribute a sense of history, people in this slice of the city are engaged with each other and their community.

Where the Livin’ is Easy
There’s always something happening in Fort Greene, yet the vibe is relaxed and friendly. Restaurants and bars are casual and it’s not uncommon for people at a partially filled table to invite others still waiting to join them. The popular Habana Outpost is touted as both an eatery and a community gathering space. Another popular gathering spot is Greenlight Bookstore, an independent bookshop, which hosts a steady stream of events. The summer gets busy with block parties. Designed by the same landscape architect as Central Park, Fort Greene Park‘s beautiful 30 acres provide tennis and basketball courts and plenty of greenery. The Brooklyn Academy of Music offers world-renowned performances in all of the arts as well as classes, talks, and neighborhood outreach. MoCADA, the Museum of Contemporary African Diasporan Arts, is another cultural gem in Fort Greene.

A Residential Potpourri
Most of Fort Greene consists of intimately scaled, landmarked, tree-lined blocks of historic brownstones and carriage houses as well as some brick rowhouses and wood frame houses. On the western edge of the neighborhood, by BAM, new mixed-use towers provide performance, rehearsal, and studio space as well as many apartments. Fort Greene is slightly more affordable than Brooklyn Heights and Dumbo. Prices here are similar to neighboring Boerum Hill, Prospect Heights, and Park Slope.

Nearly every subway line passes through Fort Greene, making it easy to get almost anywhere in the city.

Subway Lines:

Circle17

Fort Greene is also home to Atlantic Terminal.


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Boerum Hill

Boerum Hill is a quaint, small, and surprisingly flat neighborhood at the hub of many vibrant Brooklyn destinations. Its tree-lined streets, spacious brownstones and townhouses, and easy access to all parts of the city make it an ideal neighborhood to come home to at the end of the day. Sections of Boerum Hill have been landmarked, and its residents, both long-time and newly arrived, take pride in preserving its historic buildings.

Shopping and Supping
Many blocks are residential, but business is booming on pretty Smith Street. Its restaurants draw foodies from all over Brooklyn; they come early for the shops and stay late to enjoy the lively, but not too wild, bar scene. Atlantic Ave., the area’s wide thoroughfare, is made more intimate by the fabulous shops of all kinds that line it’s wide sidewalks. City Foundry is a treasure trove of vintage and antique furniture and lighting. The Primary Essentials showcases locally made products. After wandering in and out of the shops, stop in to St. Gambrinus, a friendly and well-stocked craft beer shop and bar. The intimate and welcoming vibe of this neighborhood is most clearly manifested in its annual block parties. It’s also an easy stroll over to the surrounding neighborhoods of Fort GreeneProspect HeightsPark SlopeGowanus, Carroll Gardens, and Downtown, and all that they have to offer.

Coming, Going, and Nesting
Because the brownstones and townhouses of Boerum Hill are amongst the most desired in Brooklyn, the prices are high. They attract mid-career professionals and families looking for an easy commute to the city and a peaceful place to come home to. There are also some walk-ups that are somewhat more affordable.

Atlantic Ave. is a hub of transportation, with numerous subway lines passing through, and a railway station. There are also other subway stations within the neighborhood, making it very accessible.


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