Issue 8. May 2007


  Frances Katzen
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04/03/2007

Market Strong for Apartments in Manhattan
By CHRISTINE HAUGHNEY
While the national housing market is struggling with rising inventory and weakening home values, the prices and number of apartments selling in Manhattan rose in the first three months of this year, according to data released yesterday by several of New York City’s largest real estate brokerages.......MORE
[New York Times]
 
 
 

04/24/2007

New York:  Manhattan: Survey on Apartment Vacancies
By CHRISTINE HAUGHNEY
The vacancy rate for rental apartments in nearly every Manhattan neighborhood remained below 1 percent for all of 2006, according to data released yesterday by the rental brokerage firm Citi Habitats Inc.......MORE
[New York Times]

 
 
 

04/2007

The priciest blocks in the boroughs
By LAUREN ELKIES
In a city where one gasp-inducing sale follows another, it's tough pinpointing the "best" homes and the "best" blocks........MORE
[The Real Deal]

 
 
 

04/2007

Residential inventory pared down
By VANESSA LONDONO
An active first quarter for residential sales kept a tight rein on the number of Manhattan apartments on the market as anticipation grows for the expected spring rush. .......MORE
[The Real Deal]

 
 
 

04/2007

High rents expected to peak in 2007
By PHILANA PATTERSON
Manhattan landlords shouldn't expect to have any trouble renting their units this year, but they may not get the huge rent increases they enjoyed last year........MORE
[The Real Deal]

 
 
 

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

(212) 350-8575

fkatzen@elliman.com

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Do You Know

What AIR Is?

 

           In Newport, R.I., it’s illegal to smoke a pipe after sunset.

           In Florida, it’s an offense to shower naked.

           In Wyoming, women can’t stand within five feet of a bar while drinking.

           In Oklahoma, dogs must have signed permission from a mayor for three or more to congregate on a lawn.

           It’s easy to laugh at these laws, which were passed years ago and were based on the moral and safety standards of the time.  I doubt very much if they have been enforced in the past 100 years or so.

           Yet, there is a law in New York City that is based on the needs of 30 years ago which is still on the books and seems as ludicrous.  Yet, it is being enforced and could have a serious impact on development in downtown New York.  The regulation is the Artist-in-Residence (AIR) law permitting only those who are certified as artists to live in lofts in downtown Manhattan.

           This made sense in the 1970s when artists were moving into abandoned manufacturing spaces in lower Manhattan serving as pioneers for the development of the area.  The artists used the large open spaces for both living and working.

           Today, these once cheap raw spaces have become some of the most expensive and luxurious housing in the city.  Most artists can no longer afford to live there and are moving to other boroughs, such as Brooklyn and Queens, where they are igniting exciting revivals in various areas.  Now it is the investment bankers from Wall Street and other affluent people who want to live in the area. 

Though, the law has been on the books, it was seldom enforced until recently. About six months ago, the Bloomberg administration stopped issuing Temporary Certificates of Occupancy for the lofts, the mechanism used to get around the law.  The result is that non-artists who move in and do not get a permanent Certificate of Occupancy are “illegal” tenants.  We’re in the process of appealing these laws on behalf of buyers, but it is  time consuming.

           This law should be changed or not enforced.  Ironically, a law that initially served as a catalyst for the development of the downtown area is now becoming a mechanism that is stopping development.  Neither developers nor prospective buyers will want to venture into an area when such uncertainty exists. A good law has become an albatross.

           Potential buyers of multi-million-dollar lofts are backing off their purchase of a home they would inhabit “illegally” and face uncertainty and a protracted legal fight. Additionally, without a certificate of occupancy, financing may be more difficult to arrange.

           SOHO and the surrounding areas have thrived because developers and owners have focused on creating quality, luxury housing in the area.  We are seeing this drive to quality now in many areas of the city. Real estate is no longer about location, location, location, it’s also quality, quality, quality.  Buyers want well-run buildings with well-appointed apartments that are more spacious and have more bedrooms and beautiful details.  These properties can command a premium and many buyers are willing to pay  extra.  Run-of-mill, mass market units are still selling, but with neither the demand nor price increases of the luxury properties.  For example, at the condominium at 260 Park Avenue South prices have increased to $1,750/$1,800 per square from $1,226.

           Overall, the Manhattan market continues to be strong with the average price per square foot and the median price in the first quarter showing gains over the prior year quarter, according to Prudential Douglas Elliman’s Market Overview prepared by the appraisal firm of Miller Samuel.  (The complete report is linked to the newsletter.)  Four-bedroom units showed the largest gain in price with a 24.8% increase to an average price of $8,957,570.  This was followed by three-bedroom units, studios and two-bedroom apartments.

           There was a large increase in the number of sales and inventory dropped by 14.2% from the prior year. The loft market set a record with an average price of a loft apartment breaking the $2 million mark, up 13.2% over the prior year.

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© 2006 An Independently owned and operated member of Prudential Real Estate Affiliates, Inc. is a service mark of Prudential Insurance Company of America Equal House Opportunity. All material presented herein is intended for information purposes only. While, this information is believed to be correct, it is represented subject to errors, omissions, changes or withdrawal without notice. All property outlines and square footage in property listings are approximate.

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