Remarkable Real Estate: Stribling Fall State of the Market by Mover and Shaker Elizabeth Ann Kivlan and Elizabeth Stribling
Mover and Shaker Elizabeth Ann Stribling-Kivlan and Elizabeth Stribling
THE STATE OF THE MARKET
November 15th, 2013
Elizabeth F. Stribling is Chairman of Stribling & Associates. Elizabeth Ann Stribling-Kivlan is President. Here is a conversation on the strength of the fall market with questions from Elizabeth Ann and responses from Elizabeth.
What an interesting year we have had in New York City. One year ago we were battered by the ravages of Superstorm Sandy. Amazingly, just two months later we ended the real estate year on an incredible up note. Then we entered a spring real estate market that was on fire. Is the demand for real estate still hot?
It has been an incredible year in New York City. One year later we are still working to come back from the devastation that Sandy inflicted. It has been a long road, but it appears that we are on track to be stronger than ever. As stated already, the end of 2012 was a record-breaking quarter for New York City residential real estate. A steady demand for property has persisted through the first three quarters of 2013. There has been a surge in buyers who are looking to enter into this robust marketplace.
With all the pent-up demand and buyers out there, has there been a corresponding increase in inventory with people looking to sell? In the spring of 2013, the market inventory reached an all-time low. Have we seen a change since that time?
Today we have the lowest inventory ever recorded, currently hovering at around 4,400 available units in Manhattan. This, coupled with a higher absorption rate and a shorter average number of days on the market, is only fueling the current market. Our agents are clamoring for more product to sell. With New York real estate now considered a solid investment, many people have entered the buying market who had been on the sidelines for the last five years. But although the demand for it clearly exists, we are not seeing a flood of inventory coming on the market.
There is also talk about bidding wars in all ranges of the market. Is this true across the board? Is everything selling immediately?
This is not the case across the board. Yes, we are still seeing bidding wars on newly renovated one bedrooms in Williamsburg, as well as three bedroom apartments that need work on the Upper West Side; however pricing is still key. Buyers are savvy, well versed in values, and have done their homework prior to entering the market. People are not willing to overspend if the perceived value is not there.
Is there a most popular area in New York City?
Well, we have seen fabulous sales and higher prices on both the Upper East and Upper West Sides. The Upper East Side has seen large apartments selling quite briskly. The three and four bedroom market is quite active right now. The Upper West Side has seen gains across the board from studios to larger apartments. This reminds one of the enduring values of traditional neighborhoods. These established areas still have great cachet and desirability. That being said, we have seen higher prices throughout the city. New York has changed drastically in the last 25 years. Many once-fringe areas are now considered well established. In terms of popularity, we are seeing strong demand in all neighborhoods.
Is Downtown faring as well?
Downtown is bustling more than ever. This year has seen record pricing for penthouses in all areas of town. One such apartment has gone into contract, reportedly for over $45 million, at 56 Leonard Street, and another at Walker Tower in Chelsea supposedly achieved close to its asking price of $55 million. Like the rest of Manhattan, there is a high demand for apartments in all size categories. The demand for West Chelsea also remains quite high. The High Line is attracting throngs of visitors and is an area many are seeking to call home. Cary Tamarkin’s recent project at 508 West 24th Street has been quite successful. This 15-unit building has the most luxurious finishes and the added appeal of its proximity to the celebrated High Line. We are also back to the days of selling out of sales offices and from floor plans. Post-Lehman Brothers, it was necessary for buyers to walk the actual space and get a feel for the apartment itself before committing. This project is nearly 50 percent under contract selling out of a sales gallery in the architect and developer’s office, as the building is still an active construction site with limited access.
It has been so wonderful at Stribling having our newly opened Brooklyn office on Atlantic Avenue. How is the Brooklyn market faring and is it just as hot as Manhattan?
Brooklyn is the darling of the press. Across the board, in all size apartments and townhouses, buyers are clamoring to become a part of the Brooklyn community. On a historic level, prices have never been higher in the borough. Brooklyn is no longer seen as an affordable alternative; in fact, its prices are inching closer to Manhattan’s. According to the latest Real Estate Board of New York report, the median price of an apartment in Brooklyn is up 13 percent from this time last year. It is a top destination with global appeal and is truly its own trendsetting brand at this point. In France, one will now often hear “C’est tres Brooklyn” when referring to the newest and hippest concept. The reach of the borough is extraordinary, with an outpost of the Brooklyn Brewery even set to open in Sweden soon.
There is much talk of Queens at the moment. Is that the next destination with more affordable prices than those in Manhattan and Brooklyn?
Queens is really on the rise. Condominiums in Long Island City have a median ask of over $900 per square foot. The recent higher prices in this area, coupled with the higher prices in Brooklyn and Manhattan, have increased interest in Queens. Queens offers a wide variety of diverse and wonderful neighborhoods. I am excited to see the future buildings which are planned for the Astoria waterfront. More and more I hear of friends whose children are moving to Sunnyside, which is affordable and easily accessible to Manhattan via the subway’s #7 line. From a commercial perspective, Queens is seeing an increase in bespoke cocktail bars, new restaurants and the arts. Queens is definitely the next place to be in New York City!
Well I guess the question on everyone’s mind is who is out there buying? I hear talk that everything is being sold to someone from outside the metropolitan area, especially from overseas?
The everyday market is still primarily comprised of New Yorkers. The New York economy is stable, and we are continuing to see increased growth in many sectors including a rapidly rising tech sector. As opposed to 20 years ago the crime rates are now low, and the increase in green spaces and the opening up of the waterfront have encouraged many people to remain in an urban environment rather than leave for the suburbs. Likewise, many empty nesters are choosing to return to the city. Instead of a large home to maintain and the need to also rely on their cars, they choose to buy an apartment and enjoy all of the comforts and conveniences that New York City offers. This being said, there is still a significant percentage of foreigners buying in New York City. We are a global megalopolis whose appeal is felt on many levels, whether by a local investor purchasing a new one bedroom condominium in Greenwich Village, or by a foreign billionaire buying in a giant glass tower to shelter a portion of his assets and hobnob with his compatriots.
New developments appear to be all over the media right now. There are rumors of extraordinary prices being attained, record asking prices and fast sellouts. What is really going on in this arena?
After a lull in construction following the collapse of Lehman Brothers in 2008, we have seen a variety of luxury product coming on throughout the city. However there is still insufficient product in this sector to keep pace with demand. One must look at new developments in two categories at this point. The first category is the standard New York new development product, now trading at higher-than-ever dollar per square foot prices. People are lining up to buy into new projects with no work to be done and every possible amenity. The second category is defined by the uber-luxury developments and towering glass buildings lining the 57th Street corridor, Madison Square Park and unique view locales such as the waterfronts. We have seen extraordinary prices at this level. What seemed unattainable years ago no longer seems outlandish. Pricing over $50, $60 and $75 million and up now appears to be the norm for a one-of-a-kind new apartment which cannot be duplicated. What is important to remember about these sales is that many of them will not be closing for up to two years. This also keeps the inventory levels quite low, as it does not require the purchasers to immediately place their homes on the open market.
What trends are you seeing in New Developments?
Recently launched in the Columbia Waterfront District and being developed by HFI Developments, 255 Columbia Street is a 13-unit passive house construction project comprised of two and three bedroom condominiums plus a four bedroom penthouse. This method of construction, which makes residences incredibly energy efficient and reduces their energy consumption by up to 90 percent, has been quite appealing to purchasers. Elaborate sales offices are now par for the course, and the use of technology to showcase views and plans is common once again. One Vandam is being developed by QT Developments and designed by BKSK with interiors by Studio DB. The state-of-the-art showroom overlooks the site and in order to help prospective purchasers better understand the building, an iPad app enables the salespeople to show views from various residences which were captured over the site, and has been very well received. Lastly we are seeing an increase in the size of apartments in new condominiums. There is a strong desire for large-size apartments with numerous bedrooms. With the very high price of land and cost of construction in New York City, developers are seeing a better return on investment with large-scale apartments and the desire for this style of apartment is fueling this segment of the market.
Well, signs indicate that we are in a very active market. But there have been concerns about the ongoing nature of this frenzy and whether or not we are in a bubble. Is the market stable, or are prices rising?
This is the question on everyone’s mind right now. Real estate is both a tangible commodity and one’s home at the same time. After many years of uncertainty after the economic collapse, buyers are understandably eager to get back into the market. The continued strength of New York is quite palpable: this is a location many are eager to place roots in. Within the last year, prices have clearly risen; Jonathan Miller of Miller Samuels’ latest market report shows that the average price in Manhattan is just shy of $1.4 million, which is a year-to-date increase of .6 percent. These factors, combined with the projected future population and job growth within New York, all point to a continued strong and prosperous market with healthy prices.
With little inventory, pent-up demand and rising prices, what advice would you give to a prospective or current buyer?
They must decide what the best product is for them. It used to be that if one was looking for a penthouse, for example, one only looked in a specific, predetermined area. Now buyers are looking all over. The search is all about the home now, and has become less neighborhood-specific than it once was. The quality of the product, rather than the neighborhood, has been dictating the market. And we have been very interested to learn that other major cities are experiencing similar trends, including one toward a more modern, open lifestyle. This is quite clearly evidenced here in New York by the immediate success of 182 West 82nd Street, being developed by The Naftali Group, which offers three, four and five bedroom condominiums with flowing loft-like interiors behind a vintage brick and brownstone facade.
So, where next? What neighborhoods are emerging or being rediscovered?
I am betting on lower Manhattan. South Tribeca and the area around the Freedom Tower will emerge as a new destination area. Lower Broadway in this neighborhood is evolving wonderfully with some exciting new projects. This section was formerly quite commercial, but as the desire for Tribeca loft living continues to magnify, this area will only increase in value and desirability. Likewise, lower Manhattan and the Financial Districts will once again prosper. Over the next couple of years plans include the conversion of the Woolworth Building and the Verizon Building at 140 West Street, as well as the opening of the new Four Seasons Hotel at 30 Park Place, and additional community infrastructure including restaurants and shopping. This area is ripe with transportation opportunities, and has easy access to the waterfront.
What about those who are looking to rent? Does the old adage that if the sales market is strong, then the rental market must be soft, ring true at this point?
Normally this is the trend, but we are still seeing a tight rental market in New York. It is important to remember that New York is still a rental town with the majority of housing stock, around 70 percent, being rental units. Vacancy rates were down at the end of the quarter with the median rent in Manhattan still hovering around $3,000. Rental pricing is still high, but it appears to be stabilizing with many people attempting to re-enter the sales market. At the same time, rents in Brooklyn are skyrocketing with a record median price only slightly below Manhattan’s (at around $2,800), and very low vacancy rates.
From what I can garner 2013 has been a very interesting year for both real estate in New York as well as Stribling.
2013 has once again proved the resilience of New York City and its citizens. I am New York City’s greatest champion. I am also proud to share the news that the Stribling website received the award of Best Real Estate Website from luxuryrealestate.com in 2013. We worked tirelessly on our web overhaul and are so pleased to have our site recognized by this leading global real estate network. I believe that we are on track to have a healthy and strong 2014. New York is still a relative bargain on a global scale. In comparison to London, which has seen selling prices in excess of $9,500 per square foot at One Hyde Park by the Candy Brothers, and also Hong Kong where a Frank Gehry-designed building has set records at over $9,000 per square foot, our average asking price per square foot for ultra-luxury new condominiums over $50 million is $7,231, making New York a great value at this level. With this in mind, New York City should continue to be a sought-out destination for homeowners even with an ever-expanding choice of glittering global cities.
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For over 30 years, Stribling and Associates has represented high-end residential real estate, specializing in the sale and rental of townhouses, condos, co-ops, and lofts throughout Manhattan and Brooklyn, and around the globe. Stribling has more than 200 professional brokers who use their respected expertise to provide personalized service to buyers and sellers at all price levels. A separate division, Stribling Private Brokerage, discreetly markets properties over $5 million, and commands a significant market share in this rarified sector of residential real estate. Stribling is the exclusive New York City affiliate of Savills, a leading global real estate advisor with over 200 office in 48 countries.
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& their most recent State of the Market, shown here.
Whom You Know Congratulates their new President, Elizabeth Ann Stribling-Kivlan:
