Aug 3, 2017
According to Street Easy’s latest market report, Strong price
appreciation in Upper Manhattan finally slowed in Q2 2017,
maintaining its stronghold as the most affordable submarket in the
borough with a median home resale price less than half of the
borough median, at $496,881.
Brooklyn prices continue to rise, with South Brooklyn neighborhoods
reporting the greatest annual price growth, up 9.7 percent since Q2 2016. Prospect Park prices cooled off, as the median resale price of the popular submarket is down 10.1 percent from its peak levels in April. Despite the price appreciation, the share of homes that cut their asking prices rose in Brooklyn, with cuts made on 35 percent of the homes for sale in Q2 2017,
compared to 31 percent in Q2 of last year. Brooklyn rents increased slightly, as Brooklyn’s median rent price was $2,442, 1.3 percent higher than its Q2 2016 levels and just one dollar below its all-time peak in Q3 2016, proving to landlords that the rental market is still healthy.
Prices rose the most in Queens among the big 3 boroughs. The median resale price increased 8.3 percent year-over- year to $500,351. Median resale prices went up across the borough, increasing more than 5 percent in every Queens submarket except the Rockaways, which remained flat. Rent prices in Queens hit an all-time high. Median rent prices were up 1.3 percent year-over- year, reaching an all-time high of $1,989 per month. Home sales in Brooklyn and Queens outperformed Manhattan during the second quarter — with more deals and faster-growing prices, according to a new report. The number of sales in Queens jumped 17 percent during the quarter, compared to the prior year, followed by Brooklyn, with 15 percent growth. Sales in Manhattan, the most expensive borough, rose just 6 percent. Citywide, the number of residential sales increased 15 percent, according to the Wall Street Journal.
In New York suburb news, New Rochelle, which is just a few miles north of New York City, enacted a plan ago 2 years a to spur $4B worth of development, streamlining the permitting process and welcoming developers. Two major proposals for towering residential projects show the plan is working. New Rochelle and RXR Realty, the master developer for New Rochelle’s downtown revitalization, revealed a $300M, two-tower proposal that, when completed, would bring up to 700 housing units and 40K SF of retail to what is currently a parking lot. The announcement came on the heels of the city awarding the rights to develop a major housing project on the current site of a fire station, less than a block from its renovated train station.
In luxury market news, a court decided against a loan for the skyscraper going up at 111 West 57th St., also known as the Steinway Tower. The project is slated to be among the tallest residential skyscrapers in the world and the world’s most slender, with a height-to- width ratio of 24:1. But after rising only 20 stories, the SHoP Architects -designed Billionaires’ Row addition has stalled. Michael Stern’s JDS Development and Property Markets Group, in raising finances for the project, enlisted AIG Global Real Estate for a construction loan of $400M, and later took out a mezzanine loan with Apollo Global Management for $325M. Their attempt to get another mezzanine loan from Spruce Capital Partners for $25M was temporarily blocked by a judge after a lawsuit filed by another investor in the project. There have been lawsuits back and forth between the developers and financers, making the development of the supertall much more complicated than anticipated. This has only added to the stress of the developers that’s been brought on by the glut of luxury inventory hitting market, bringing the overall profitability and financial health into question.
https://www.bisnow.com/new-york/news/multifamily/steinway- tower-jds- pmg-funding-lawsuit- abase-77091utm_source=CopyShare&utm_medium=Brows
In Upper East Side news, the power of good transit isn’t just one of the most important factors for New Yorkers when buying real estate — it also drives up interest of foreign buyers, as the Yorkville neighborhood has quickly seen. This quiet neighborhood on the Upper East Side, which had to endure years of dust and construction noise during the construction of the Second Avenue Subway,
is undergoing rapid transformation since the new Q train stations opened this year. Swanky residential towers rising in the area are attracting more families, as well as an influx in foreign buyers — especially from China — as brokers increasingly lure them to the neighborhood to take advantage of the lower price points relative to Downtown or even other parts of the Upper East Side.
Foreign investors tend to look for something “safe” or “blue chip” when buying, or a name they recognize, like the Four Seasons or the Ritz. They’ve continued to buy on Billionaire’s Row because they keep hearing about pricey new developments on that strip. But buyers are also looking for a good return on their investment and that is why their attention is now on Yorkville, where buyers can get a “two-bedroom, high floor, luxury condo” in a new development for roughly $1,500 per square foot —compared to $2,500 west of Lexington Avenue.
Agents in the area have said that their traffic has been at an all-time high for in April May and June, and they haven’t seen a slowdown in foreign buyers, because the city’s real estate market continues to provide a safe haven to park their money.
In real estate tech news, the online brokerage firm Redfin debuted on the stock market last week, as investors boosted the online brokerage’s stock price a 45%.Ahead of its Wall Street debut, the Seattle-based brokerage priced its shares at $15, valuing the company at roughly $1.2 billion. But the stock rose steadily throughout the day to close at $21.70— valuing the company north of $1.7 billion. It was great news for real estate tech companies and other venture-backed
brokerage with IPO ambition, like COmpass, which is valued at over $1 billion and is planning an international expansion. Redfin takes a total of 4.5 percent in commission from the home seller (with 1.5 percent going to the salaried Redfin listing agent and 3 percent going to the buyer’s agent), which is less than traditional brokerages.
In Hamptons news, buyers in the Hamptons are taking some of their equity in stocks and investing it homes along the South Fork resort towns. The median sale price for a single-family Hamptons house has reached a record $1.07 million, up 7.5 percent from a year ago, according to a report late last week. The higher end seems to be flourishing as well, with 48 homes priced at $5
million or higher being sold in the three months leading up to the summer season. Buyers still demanded a deal, however, with 86 percent of houses and condos bought in the quarter selling for less than what the seller sought. The average discount was 12 percent from the last asking price. This shows that sellers expectations have gotten lofty across the New York market, and even with discounts, there is still a lot of money left over for profit.
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