Issue 16. September 2008

  Frances Katzen, SVP

Pertinent Articles:


Buyers await lower prices
As the national housing market weakens, homebuyers in New York City are holding out for lower prices, but brokers are advising sellers to stick to their asking prices if they're realistic. "If someone thinks a place is priced correctly and they're not under pressure to sell, I would not reduce prematurely," Jill Sloane, a Halstead Property senior vice president, told AMNY. Most brokers are advising buyers not to try to time the market. 
[The Real Deal]


Nolita gets new developments
Nolita hasn't seen any new residential development in 20 years, but developers are changing that. Developments are popping up around the neighborhood: at 290 Mulberry, a SHoP Architects-designed 12-story, nine-condo building is rising, and at 49-51 Houston Street, a 14-story, 15-unit condo project is being built by Arpad Baksa Architects. Prices per square feet in Nolita condos have jumped 600 percent in the past fifteen years to about $1,200 per square foot. A carriage house built in the 1800s, known as the Candle Building, is being converted to a condominium called 11 Spring.
[The Real Deal]

Starck for rent on Wall Street
By Steve Cutler
While by no means the first starchitect-driven residential property in New York City, when it opened, Downtown by Philippe Starck at 15 Broad Street was among the first condominiums to flash a designer brand so flagrantly. And effectively.

The 42-story luxury conversion sold $210 million in condo apartments in just four weeks in the summer of 2004 and helped lift Manhattan's undervalued Financial District to upscale destination status. .
[The Real Deal]


Condo coming to former Chelsea club
By Jovana Rizzo
A new luxury conversion called the Alma is planned for a former Flatiron District club that was used as the location for a dance sequence in "Desperately Seeking Susan," the 1985 Madonna movie.

The building at 30 West 21st Street in Chelsea was once the home of the notorious '80s dance club Danceteria.
[The Real Deal]


Some Hamptons retailers now take euros
By Catherine Curan
The hordes of European renters descending on the Hamptons this year have a new reason to love New York's posh summer playground: they can pay cash in Euros for food, lodging and even fine art at some places.

A sign in the window of Loaves & Fishes cook shop in Bridgehampton, as first reported by Plum Hamptons TV, shows how far the mighty dollar has declined. It reads, "We now accept euros. Bills only. Change given in U.S. dollars." 
[The Real Deal]


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Quarterly Reports:
Frances Katzen
485 Madison Avenue 16th Floor
New York, NY 10022

(212) 350-8575

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The Selling of New York

At times,  New York City feels like a fire sale.  The usual influx of summer foreign tourists has turned into a swarm seemingly taking over every inch of midtown and pushing us aggressive New Yorkers out of the way to get quality merchandise at dollar-damaged bargain prices.

Much of the new residential development has been wolfed down by foreigners in the past several years creating a solid foundation as the housing market thrived.  But, as Europeans, Asians, Middle Easterners and South Americans flood to our stores and hotels the question arises, has New York become the Europe of the 60s and 70s, where Americans traveled cheaply and returned loaded with bargain-priced luxuries?

This viewpoint was expressed recently in The Economist.  The cover showed the Statue of Liberty seated like Rodin’s The Thinker, down from its heights and a beacon to the world to contemplate our international standing.  Ironically, both images were created by Frenchmen.  The long-standing image of America as the golden light has been tarnished due to our foreign policy, weakening economic role and the decline of the dollar.  Who would have imagined that stores in Manhattan and the Hampton's would gladly be accepting Euros in place of dollars?

What does this mean for the contemplative real estate market?

Uncertainty and disorder still reign in the credit markets, and, as we saw with the demise of Bear Stearns, no financial institution is safe. Wall Street and the credit markets will most likely have an impact on the real estate market as bonuses will be greatly reduced and many jobs lost.  Financial institutions have been a money machine funding real estate purchases this decade and creating demand, particularly for the higher priced and newer properties. 

The focus of today’s buyers are changing and rather than seeking the glitz,  I am seeing a trend toward buyers who want equity in an energized town, New York is still the most incredible city on earth.  These buyers are creating the balance that will help stabilize the market.

Meanwhile, mortgage rates are creeping up, financial institutions have tightened their purse strings and sales have slowed while inventory has increased.  One ironically positive result of the tightened credit markets is a slowdown in future residential development, which will give us time to absorb what is now on and coming onto the market.

Overall, the world is changing: financial and development decisions in China and India affect the world economy; America has lost and must regain its standing both politically and economically in the world; and the final resolution of the credit crises has to play out. 

As the old Chinese curse goes, “May you live in interesting times.”  We certainly are.






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