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Sell Now?...or 3-5 years from now?
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Sell Now?...or 3-5 years from now?
This is the current quandary for those considering selling. This question is even more intense for those who indeed have to sell in the near future. All indications show the market is certainly not on a substantial upward trend in the next several years. There will be moderate growth in certain segments, likely the lower price ranges; however, as you go up the price scale, those increases will be minimal at best. The actual closing prices of recent sales are now beginning to reveal themselves; they are generally lower and in many cases much lower than current prices. The sellers who are paying attention to these figures and adjusting their prices accordingly are the ones who are getting their properties into contract. Those who refuse to face facts are languishing on the market and eroding the value they have.
The luxury market will probably experience a rockier road. There are, of course, outliers to this general trend; apartments that are one-of-a-kind or that are in sought-after buildings, or have a spectacular location and views of the park etc....these will fare a bit better. Aside from those unique homes, most sellers should consider getting on the market now to aggressively identify today's yield, because tomorrow's will likely be less. It is impossible to time the market, but the cycle will probably not be complete until well after the 2020 elections, which means 2021.
Will we be have bottomed out by then?...hard to say. Should we make that bet? Some actually say that we have bottomed, but agree that we will just stay here for a while before we see higher closing prices. With so many factors to consider, it is impossible to accurately time the market. Each situation and micro-market will be unique and should be meticulously analyzed, as there is value out there. If you not an "investor" and you are buying a "home", your time horizon is probably 5-7 years, long enough to endure any extreme fluctuations in value. Assuming so,
you should be out there now, as the value you seek to reap could be as much as 15-25% greater than it was in mid-2015 when the market, by many metrics, was peaking.
That current value proposition is even further compounded by the near record low interest rates we are experiencing at this very moment. These low rates have substantially strengthened your purchasing power. So, you should identify a property that works. For those trying to optimally "time" the market and buy later, will interest rates have risen? Will inventory have contracted? Will sentiment (consequently competition for properties) have strengthened? If so, prices will already be on the rise.
The average price of a Manhattan apartments has fallen 5% in the last year and resale properties sold for the largest discounts to asking prices in the last nine years. So while most of your competing buyers are sitting by the pool, there is tremendous value to be found in the marketplace and summer is an extraordinary time to capitalize.
QUESTION:
Are you prepared to dive in? You should always know what you are in a position to buy or sell at all times. If you don't know, reacquaint yourself with the marketplace. What is your property worth? What can you afford to buy? Anyone interested in buying or selling, should be rolling up their sleeves to determine whether the time is right to sell or if there's a home or investment property out there for them.
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* F E A T U R E D P R O P E R T Y *
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Coming Soon...Wait for it....
Off Market...Location, Location, Location...Views, Grandeur...
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New York's 2019 Rent Laws: What Has Changed for NYC Renters?
By Ian Port
In June 2019, New York state approved a package of rent laws designed to give strong new protections to renters in New York City.
Landlords and some in the real estate industry
opposed the laws. But state legislators and tenants' rights advocates argued that they're necessary to maintain affordability and stability in a city where 65 percent of residents - roughly 5.4 million people - are renters.
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"Be Greedy When Others Are Fearful"
Excerpt from Compound's Newsletter regarding the new Rent Laws discussed in the above article:
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Setting aside the very heated politics on both sides of this debate, we do believe that this regulation will impact New York City residents -- of all socioeconomics -- in a negative way. Rent regulated units tend not to fall into the hands of the truly needy, and the new rules diminish landlord's incentives to renovate and maintain rent regulated units which means they are likely to fall into extreme disrepair.
However, we do believe that rent regulated units will remain 99% occupied, that these buildings are located in one of the country's tightest rental real estate markets, and that the current market reaction to the regulation is a dramatic OVERREACTION.
More importantly, to quote one of our favorite value investors: "Be fearful when others are greedy and greedy when others are fearful."
As a result of the market uncertainty, we are seeing Manhattan multifamily transactions (where there is some rent regulated tenancy) at cap rates in excess of 5%. (By comparison, we see cap rates in Tampa and Denver at 4.35%.)
For the time being, until the market really figures out how to price in the new rent regulation laws, Manhattan is on sale. And that almost never happens.
We think it's an ideal time to negotiate great real estate investments right here in New York City."
I must say that, I agree.
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Foreign Investment in U.S. Homes Plummets Amid Currency Changes, Trade Wars
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Foreign investment in U.S. homes has plummeted over the past two years, as a strong U.S. dollar, threats of trade wars and a global economic slowdown puts off overseas buyers, new data shows.
Foreigners purchased $77.9 billion-worth of existing houses in the year from April 2018 through March 2019, a 36% drop from the previous year and half the amount spent in 2017, according to an annual report released Wednesday from the National Association of Realtors.
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THE NEW CHANGES IN TRANSFER & MANSION TAXES
On April 1, 2019, the Governor signed the state budget for the upcoming fiscal
year, which contains important tax changes for real estate sales.
1)
New Transfer Tax Rate of 0.65% for the following:
· 1-3 Family, condo, and co-op sales for $3 million or more
· Commercial sales for $2 million or more
· All other sales remain at the old rate of 0.40%
2)
New Mansion Tax Rates:
Instead of a 1% tax on sales of $1 million or more, the new rate is
based
on the sales price.
The table below shows the new total state transfer taxes paid by 1-3 family
homes, condos, and co-ops:
These changes take effect for closings on or after July 1, 2019, except
for sales where the contract was signed on or before April 1, 2019.
The NY City transfer tax rate of 1% for residential sales of $500,000 or
less, and 1.425% for more than $500,000, remains in place.
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* M O R T G A G E S & I N T E R E S T R A T E S *
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The 30 year Jumbo is off an entire percentage point since October. Now watch your purchasing power go up.
It is impossible to predict how long this will last, so the opportunity must be taken seriously. In the example below, consider the effect that just 1% in interest rates makes to to your
purchasing power. Then below, look at where rates actually are and where they were, just a few short months ago.
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Interest Rates:
Example below reflects 3.75% vs. 4.75%
$1M borrowed at 3.75% = $4,631/month
$1M borrowed at 4.75% = $5,216/month
That is a difference of $585/month or $7,020/year.
Alternatively, we could look at it this way:
At 3.75%, $4,631/month will afford you a $1M mortgage.
At 4.75%, $4,631/month will afford you only a $887,800 mortgage.
Last year 30 year jumbo mortgages hovered close to 4.5%. Interestingly, just a few months ago rates actually popped up as high as 4.625% (see chart below). We are off an entire point since then. Question is, could they go back up just as quickly?
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Rates as of 8/4/2019 @ 1:09pm
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JUMBO
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Loan Type
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MI Type
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Interest Rate
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APR
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JUMBO
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MI Type
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Interest Rate
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GET PRE-APPROVED AND LOCK IN YOUR RATE FOR AS LONG AS YOU CAN
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* M A R K E T R E P O R T S & R E S O U R C E S *
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2nd Quarter 2019 Market Report Sales:
Interactive Rent vs. Buy Calculator:
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*
D I S C O V E R N Y C *
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This month, Roshko.....find him at "
The Met"
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Mark Rothko's Number 13 (White, Red on Yellow), 1958 which he created in 1949.
Click on the painting, then scroll down to listen to the informative analysis.
The Met has so many treasures that we often forget. The Summer is the perfect time to steal some AC and brush up on some culture. See you there !
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My Picks -
Y o l a & G i t a n o
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Yola Mezcal is the drink of the summer. If you are not familiar with Yola, it is a must and you can seek it out at any of these premiere selected establishments.
Yola mezcal is handcrafted, distilled and bottled by WOMEN on its namesake farm in San Juan del Rio, Oaxaca. They still honor the original recipe passed down from Yola's grandfather, Luis Jimenez, abiding by the 300-year-old method of traditional mezcal making.
Yola is also dedicated to promoting the economic independence of the women in Oaxaca. Cocktails.
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Gitano ...Well...if you haven't been, you have to go. I mentioned this to you too late in the season last year, so this is a reminder. This is "modern Mexican cooked on an open fire" and it is spectacular. With it's original location in Telum, they have brought the tropics to New York, part lounge, part restaurant. Before eating, arrive early have a Spicy Margarita. Then start with the guacamole followed by the Hamachi Tiradito and then finish it off with the Carne Asada. The nuance provided by the wood burning oven and open fire grill are not to be underestimated...Boom!!! If you prefer you can go to the original in Telum. More.
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The Hottest Restaurants in Manhattan Right Now
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The Hottest Restaurants in Manhattan Right Now.
Eater editors get asked one question more than any other: Where should I eat right now? NYC dining obsessives want to know what's new, what's hot, and what is going to be the next big hit in the greatest dining city on earth. So here it is, a guide to the hottest restaurants in Manhattan this month.
See the list. Image of HaSalon.
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"Short Order Dad " by Robert Rosenthal
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The Food Humorist©, is a Manhattan born man-about- town who writes, produces and hosts programs about food. I highly recommend his new book for Dads like myself. There is a new kind of dad, and he's doing far more domestic duty than at any time in history, including cooking. Although it's written with a sense of humor, this book is a serious resource for dads and anyone else interested in upping their game to make great tasting foo d bat home, even if they have never used a chef's knife or a roasting pan before.
Rob's 2 Minute Story
Cook With Rob
!!! -
10 Herbs & Spices That Will Change Your Life is his next hands-on, interactive cooking class. The idea is to turn you on to new and different flavors that will titillate your taste buds and amp up your cooking skills. You'll have fun, eat and drink, and learn new cooking tricks using his tried and true, user-friendly formula for getting the most taste with the fewest ingredients and least effort.
THURS Aug 15, 2019 | 7:00PM - 9:30PM
Class size is limited, so sign up now. Here's the
LINK.
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New York City * The Hamptons * Palm Beach * Miami
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With Partnering Worldwide, Brown Harris Stevens continues to leverage its very productive relationships with top brokerages nationally and internationally by inviting partners to high- light key properties in their respective markets on BrownHarrisStevens.com, and to feature our important properties on their sites.
learn more...
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Recognized by New York Magazine & Five Star Professional as one of the "most accomplished real estate professionals in New York City."
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Ranked nationally by REAL Trends as one of "America's Best Real Estate Agents" for avg. sales price of $4.350M.
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Recognized member of the 2016 "TOWN Elite" class
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Sold a single family Townhouse faster than any other on the Upper West Side over $10M to date. (StreetEasy)
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Certified Negotiation Expert (CNE)
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Trivia: Won the 2015 New York Times NCAA Basketball Pool.
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Licensed Associate Real Estate Broker
New York City * The Hamptons * Palm Beach * Miami
rcabrera@bhsusa.com
o: 212-906-0554
m:
917-701-3907
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