Finally Making It to Manhattan

But how long will Manhattan rental prices remain where they are, with employers calling workers back to the office, schools resuming in-person classes and vaccinated 20-somethings who spent the last year in their parents’ homes eager to resume their social lives?

“You have to be careful if you move into a place you can only afford because of the concessions,” said Susan McGettigan, a Corcoran real estate agent. “These luxury buildings that are offering three months free, it’s not going to last. I’ve already seen a lot of deals going away.”

Gary Malin, the chief operating officer of the Corcoran Group, sees the surging sales market as a precursor to a rental market rebound. “There is huge sentiment — people missed the city,” he said. “New York City is on sale, comparatively speaking, but it’s still expensive and it’s getting tighter.”

In May, there were 9,491 leases signed in Manhattan, breaking the record set a month earlier for the most signings since 2008, according to Douglas Elliman. And the median rent, including concessions, was $3,037 a month, up 8.8 percent from the previous month, the biggest monthly increase in nearly a decade, Mr. Miller said, adding that the market was nearing a pricing bottom.

Landlords seem eager to return to prepandemic pricing, going so far as to offer leases for less than a year, in the hopes that rents will rebound sooner rather than later.

Braden Macdonald, 26, a flight attendant, signed an eight-month lease for a three-bedroom on the Lower East Side in November, moving in with one of his roommates from an apartment share in Bedford-Stuyvesant.

At the time, there were so many vacancies that the broker showed them two other apartments in the same building and one in the building next door. The landlord wanted $2,400, but Mr. Macdonald and his roommate negotiated the rent down to $2,000, paying the same per person as they had in Brooklyn and gaining an extra room.

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Instant Reaction: Mortgage Rates, June 10, 2021

Mortgage rates dropped further this week although inflation rose more than expected. Specifically, the 30-year fixed mortgage rate fell to 2.96% from 2.99% the previous week. With rates at or below 3% for the last 8 weeks, more homebuyers benefit from these low rates.

Meanwhile, layoffs continue to fall to their lowest level since the onset of the pandemic. In fact, Iowa (-6%), Kansas (-16%), South Carolina (-23%), South Dakota (-10%) and Vermont (-40%) reported fewer layoffs than pre-pandemic. As more people return to the workplace, the demand for housing is more likely to increase as Americans set their sights on homeownership. Nevertheless, the U.S. still has a high number of people on government assistance. Continuous jobless claims, which measure the number of people receiving checks for regular unemployment benefits, are over 3.3 million. After adding the people who receive Pandemic Assistance and other Relief, there are over 15 million people collecting unemployment assistance.

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Instant Reaction: Consumer Price Index, June 10, 2021

Inflation rose more than expected in May to the fastest pace since 2008. Over the last 12 months, inflation rate rose 5.0%, compared to 4.2% in April and 2.6% in March, respectively. In the meantime, economists and policymakers typically pay close attention to core inflation, which is the overall inflation rate excluding Food and Energy. In May, core inflation also rose to 3.8%, well above the Federal Reserve’s 2.0% core target. Nevertheless, remember that the Fed has reassured that it will allow inflation to run above the 2.0% goal since it has been below that target for more than a year.

Due to the base effect, these higher readings were expected, especially for the period from March through May. Last year, prices were weak as nearly all states were under pandemic-related restrictions. However, the CPI basket started to rise last June and the year-over-year comparisons will be more realistic in upcoming months.

Parsing out by expenditure category, inflation seems to be rising mainly due to the supply – demand imbalances as the economy reopens and people resume traveling, going to restaurants, bars, events and shows. In the meantime, keep in mind that consumers have saved like never before during the pandemic. As a result, prices for airline fares rose 24.1% over the past 12 months. Similarly, prices for used cars and trucks were 29.7% higher than a year earlier.

While people are moving back to big city centers, rents are also expected to rise faster. For instance, the number of people moving in a zip code in New York City has risen so far by 41% in 2021 compared to 2020; 29% compared to 2019; 23% compared to 2018. Specifically, rents rose by 1.8% over the past 12 months to May nearly at the same pace as in April.

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$200,000 Homes in Maryland, Minnesota and New York

Salisbury (population: about 32,000) is the biggest city on the Eastern Shore of Maryland. It is in the center of the Delmarva Peninsula between Chesapeake Bay and the Atlantic Ocean, about two and a half hours southeast of Washington and two and a half hours north of Norfolk, Va. The Assateague Island National Seashore is about 30 miles southeast. This property is in a revitalizing neighborhood, on a street with vintage homes, within walking distance of downtown. Salisbury University is about two miles southwest, and the TidalHealth Peninsula Regional hospital is about a mile south. The house has a three-year-old roof and a new HVAC system.

Size: 2,688 square feet

Price per square foot: $73

Indoors: A foyer with high ceilings edged in dentil molding opens to a living room with a wood-burning fireplace on the right and a dining room on the left. Both rooms have hardwood floors. The living room opens to a four-year-old enclosed sunroom, while the dining room connects to a two-part kitchen with black-tile flooring and white cabinets with granite countertops. The near portion is a breakfast room with a bay window. The far portion, separated by a peninsula, is a work area with stainless-steel appliances. A powder room and a back staircase are off the kitchen.

The four second-floor bedrooms are spacious, with hardwood floors and closets. The primary bedroom includes an en suite bathroom with vintage floor and wall tile (basket-weave and blue) and a streamlined tub with a shower head. The hall bathroom also has Deco flourishes as well as a ceramic bowl sink set on a vintage cabinet.

Outdoor space: Lawns stretch in front and back. The fenced backyard also has a patio, circular garden beds, specimen trees and a shed. The attached two-car garage includes finished loft space.

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Why the Charms of the Uruguayan Coast Are Drawing Homeowners

For Ingo Schirrmann, a television producer from Germany, a hastily planned New Year’s vacation in Uruguay turned into a new lifestyle. In December 2012, almost on a whim, he canceled his tickets to Courchevel, France, and flew to Punta del Este, on the Uruguayan coast, instead. The beaches of South America sounded more exotic, not to mention warmer, than the slopes of the French Alps, he recalled.

He headed straight to José Ignacio, a bohemian-chic peninsula about 20 miles east of downtown Punta, and had a grand time — grand enough to buy a plot of land near the ocean and eventually build a modernist house there, designed by the acclaimed local architect Martín Gómez. Mr. Schirrmann, who was based in Hamburg, intended to use the house during the Southern Hemisphere’s summer, but as he began spending time in José Ignacio, he was taken with its slow-going, friendly atmosphere. The pandemic cemented his decision to make it his primary residence.

“Five years ago, if you told me I’d be living in a small village I wouldn’t have believed it,” he said. “What makes José Ignacio special is the people who come here. It’s easy to connect with like-minded people from different parts of the world, and it’s all super laid back.”

La Huella, that invariably delights patrons with its fire-grilled seafood and weathered-wood decor. There are gravel streets dotted with Instagram-friendly boutiques. Most importantly, there are vast beaches, open skies, and no reminders of the stresses of modern life. The proximity to Punta del Este, a larger, more urban resort, is both a convenience and an afterthought.

“The coast of Uruguay is an international meeting point,” said Alejandro Perazzo, a real estate agent affiliated with Sotheby’s International Realty. “For buyers from abroad, this country has a lot of benefits relative to the rest of the region. The rules of the game don’t change here, no matter who’s in government, and this predictability is attractive. It’s also safe.”

Mr. Perazzo was comparing Uruguay to neighbors Brazil and Argentina, two countries with a history of political and economic upheavals. Argentines and Brazilians have been summering in Punta del Este and José Ignacio for decades. But lately, given Uruguay’s stability and the announcement of tax benefits for foreign investors, many of them are staying for longer stretches of time. (Requests for permanent residency in Uruguay by Argentines, for example, tripled last year to nearly 10,000 requests, according to local news media.)

And so the real estate market has been abuzz, especially when it comes to luxury residences with inspiring views. In and around José Ignacio, a series of upscale (yet fittingly understated) waterfront developments are underway.

the Colette, a waterfront condominium with a minimalist concrete-and-glass aesthetic. To blend in with the pastoral surroundings — grassy dunes, pine groves and stonewalled chalets — Mr. Álvarez Castillo designed four low-rise buildings separated by leafy courtyards. There are 42 units, starting at $1.3 million for a 1,600-square-foot three-bedroom, overlooking a seemingly endless beach.

Mr. Álvarez Castillo also splurged on high-quality materials like Italian marble, German fixtures and Brazilian lapacho wood, yet he exercised some restraint when planning the building’s amenities. His idea was to keep expenses at less than $2,000 a month per unit (there is an outdoor pool and a small gym, but not much else).

Fendi Château Residences, a complex of four buildings, tops out at 27 stories), José Ignacio and its vicinities have strict building codes aimed at preserving the environment as well as the rural identity of the area (buildings cannot exceed 20 feet). At a time when people around the world have been rethinking city living, the promise of everlasting rusticity coupled with good taste is highly appealing — and it comes at a price.

Mr. Gómez recently completed a 5,000-square-foot residence built right on the sand dunes of Playa Mansa, known for its spectacular sunsets. Including the land, it cost about $4 million.

There are still some opportunities to be found. In La Juanita, a rugged, slowly developing neighborhood just a mile west of the village, plots situated about 900 feet away from the beach cost between $30 and $40 a square foot.

But many buyers, especially foreigners, may not be keen on overlooking a ground-up construction or taking care of home-maintenance logistics. The upcoming Costa Garzón offers both custom-designed homes and condominium-style services like housekeeping, landscaping and more. Conceived by Alejandro Bulgheroni, an Argentine energy magnate who owns a nearby championship golf course and an award-winning winery, Costa Garzón is poised to be the most exclusive development in the area, if not the entire country.

Set right on José Ignacio’s Playa Brava and just a five-minute drive away from the center of the village, this collection of oceanside plots — ranging from 12,000 to 16,000 square feet and starting at $1.7 million — come with an array of extras, including membership to the Garzón Tajamares Golf Club and the Bodega Garzón wine club (where members can create their own wines using varietals from any one of Mr. Bulgheroni’s vineyards in Uruguay, California, Italy, France and Australia.). There will be a beach house with a sit-down restaurant as well as a toes-in-the-sand dining option called El Chiringuito de Mallmann (named for its famed Argentine chef, Francis Mallmann), which had its soft opening in 2020. To build their homes, buyers can hire Costa Garzón’s team or bring their own architect, as long as the design adheres to certain aesthetic guidelines.

While Mr. Bulgheroni caters unmistakably to the jet set, he’s aware of the importance of respecting the pastoral style of the area. “I think this place will continue to attract more people, but it was never meant for people who are formal; it’s relaxed and it’s bucolic.”

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For Chloe Flower, the Décor Always Serves the Music

Location. Location. Location. So goes the real estate mantra. To which Ms. Flower responds: Who cares? Who cares? Who cares? “Whenever I’m looking for an apartment, I’m never concerned where it is, because I’m either working from home or working in a studio,” she said.

“I prefer certain areas of New York, of course,” added Ms. Flower, who previously rented in Union Square and Gramercy Park. “But New York has everything everywhere. Same with Los Angeles.”

In fact, she was living in L.A. when she and her boyfriend, Michael Sepso, a New York-based entrepreneur, decided to move in together and began looking for suitable quarters.

It was the musician Questlove who introduced his pal Ms. Flower to New York by Gehry. He is a tenant, “and when I saw his place, that was it,” she said. “I was, like, ‘Wait. Hold on. The view.’ I was so excited.”

One attraction was the bay window in the living room, which “makes the apartment feel much bigger,” Ms. Flower said of the space, which is almost 1,400 square feet.

Much of it is ceded to the Steinway Spirio|r, a piano that can record and play back performances, and to a Baldwin SD10 concert grand with a transparent lid and a cladding of hundreds of glass tiles, a loaner from the estate of Liberace to add flash to those Instagram videos. The man known as Mr. Showmanship often took it on tour. “Aesthetically, it doesn’t look like any piano you’ve ever seen. It’s really, really cool,” Ms. Flower said.

“I love Liberace,” she added. “I know he’s not a traditional classical pianist, but he used his flair and drama and passion to break into the mainstream pop world. I like to celebrate him.”

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Tracking Housing Construction at the Local Level: April 2021

Housing supply is one of the major challenges that the housing market has faced for the last several years. With the pandemic and favorable demographics intensifying the demand for housing even further, it may now be more imperative than ever to build more homes. In fact, there are about 680,000 fewer homes available for sale across the country compared to the average number of active listings in the last 5 years. As a result, the housing inventory shortage has pushed national home prices in April to a new record high at $342,000. If home prices continue to rise at this pace, many would-be homebuyers will be priced out of the market thus hurting homebuying activity. The good news is that housing inventory is rising with construction to pick up further in the following months as COVID-19 restrictions ease.

The National Association of REALTORS® tracks the number of building permits issued by metro area every month and identifies the top 10 markets with the most and least single-family building permits issued within the last 12 months. The purpose of this blog series is to identify where housing construction is rising and where we need to address the issue of underbuilding at the local level.

At the national level, housing starts slowed down in April after reaching the highest level since 2006 in March. Nevertheless, we are currently building 24% more homes than we typically have built in April in the last couple of decades. Thus, housing construction is trending upward with housing starts likely to reach 1.6 million for all of 2021 and rise further to 1.7 million in 2022.

Along with housing starts, building permits are also a leading indicator of housing activity for the upcoming months at the local level. Specifically, building permits provide an estimate of the number of new housing units that have been authorized by the government. Specifically, in April, 46% of metro areas are issuing more single-family building permits than the historical average.

The current analysis includes data for 262 metropolitan areas across the country. Below are the areas with the most single-family building permits issued within the last 12 months ending in April (expect large metro areas to have the highest number of single-family permits due to larger population). While 10 to 12 months is the typical time that it takes to build a single-family home, more than 14,500 new single-family homes have already been added or they will be added soon to the market in the following months.

Areas with the most single-family building permits in absolute values (during May/2020 – April/2021):

We also identified the areas with the fastest/slowest growth of single-family permits. Since last year, the year-over-year comparisons may look much higher due to the “base effect,” we compare them with the 12-month average in the last 20 years of single-family building permits.

Areas with the fastest/slowest growth of single-family building permits:

In the areas below, the number of single-family building permits is more than twice the number of single-family building permits in the last 20 years.

Hover over the map below to see how many single-family building permits were issued in the last 12 months in 262 metro areas across the country.


Meanwhile, the job market continues to recover with 560,000 new jobs added to the market in April.  While 7 million jobs are still needed to get us back to the pre-pandemic levels, layoffs are falling. Kansas, South Carolina, South Dakota, Vermont and Wyoming are reporting fewer layoffs compared to pre-pandemic. As more people return to the workplace, the demand for housing is more likely to increase as Americans set their sights on homeownership.  This implies that the housing supply shortage may be aggravated even further in the following months due to strong demand.
In a balanced market, a single-family permit is issued for every two new jobs. This is the ratio for the Houston metro area. Specifically, during the last 12 months, 52,090 single-family permits were issued while the local economy added 120,900 new jobs. However, that’s not the case for Orlando area. In this area, 16,340 single-family permits were issued compared to 97,500 new jobs in the last 12 months. Overall, a single-family permit is issued for every 5 jobs in the top 10 areas with the most single-family permits showing that constructions should speed up even more.

Hover over the map to compare the number of single-family permits and new jobs that were created in the last 12 months in the following areas. The darker the color, the larger the housing shortage.

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Buildings With Sections That Seem to Hover in Midair

The architecture firm FXCollaborative had a similar goal when it designed Jolie, a condo developed by Trinity Place Holdings at 77 Greenwich Street in the Financial District that is nearing completion.

“We didn’t really have a height limitation, but there is the practicality of how high you want to build and how skinny you want to build,” said Matthew Messinger, the president and chief executive of Trinity Place Holdings. “This building actually tops out at a little over 500 feet, but offers extremely competitive, attractive views,” he said. “We didn’t have to build a total toothpick of a building.”

The team achieved its objective by adding a series of modest cantilevers totaling 10 feet over the landmark Dickey House to the south (which Trinity Place Holdings restored as part of a new home for Public School 150), as well as introducing a pleated facade that directs views out over the southern tip of Manhattan. “All the views were to the southwest,” said Dan Kaplan, a senior partner at FXCollaborative, “to the harbor, to the water, to the Battery itself, to the Statue of Liberty.”

Building larger floor plates at the top of the building also resulted in more floor area exactly where the developer wanted it — in larger, more expensive apartments. “It did really make the layouts at the top much better to step over the Dickey house,” Mr. Kaplan said.

Confined by zoning regulations, architects and developers are using cantilevers as a creative way to gain every possible advantage in an increasingly crowded cityscape, even if it involves structural gymnastics.

By making leftover airspace habitable, cantilevers can help overcome a building site’s limitations, which makes them uniquely valuable in a city like New York where there is little vacant land left. It most cases, it’s not just about making an architectural statement — it’s about finding a way to build more, and more compelling, homes.

“What’s really great about New York City urbanism is there’s a set of rules and everybody sort of figures out a way to interpret the rules a little bit differently,” Mr. Kaplan said. “They find their clever way to work within the rules to create the skyline.”

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Instant Reaction: Jobs, June 4, 2021

“The job market continues to make progress with 551,000 net new additions in May. Another 7 million jobs are still needed to get us back to pre-pandemic conditions. Construction jobs got a boost of 4,400 from homebuilding but were lower by 2,500 for residential general contractors. More lumber is needed but there were 1,100 fewer workers in the logging industry. In commercial real estate, there were 500 more jobs in construction of buildings but a reduction of 16,800 of general contractors. For better or worse, there are a record-high number of REALTOR® members at over 1.5 million as of May, as more newcomers are giving the career a try in a hot and fiercely competitive industry.

Though the job market is not fully back to normal, total production in the country is already at 100% compared to pre-pandemic levels. Worker productivity has risen, and companies want to hire more workers. There are 8 million job openings currently, which is even higher than in the months before the pandemic when 7 million “help wanted” signs were posted. At the state level, Utah and Idaho have more jobs now compared to pre-pandemic. Montana and South Dakota look to join that rank in a month or two. By the end of the year, around 30 states should be in positive territory.”

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