Getting serious about home, sweet home.
"Real estate has come back to its roots of location, location, location," said Daren Hornig, president and chief executive officer of the Quest Group which just formed a new investment and development division with Shea Commercial.
Hornig, whose first New York property, luxury condo, The Prime, is under construction at 333 W. 14th Street in the Meatpacking District, added, "I think New York is going to continue to be vibrant for another 200 years. There are 13 miles of real estate just in Manhattan."
Jacky Teplitzky, executive vice president with Prudential Douglas Elliman said, "The number of people that are buying is down, but those who are buying are serious. They are also taking thier time. Before, buyers would look at about 15 places before buying. Now, it averages to about 20-30. They really want to see everything that's out there."
At a National Realty Club luncheon this week, Grubb & Ellis executive managing director Robert Von Ancken said the massive influx of new condo developments coming to the market over the next several years would create major competition in the high-end market.
"It gets to the point where we don't know where all these (buyers) come from. We look at the demographics, and the city doesn't have that many wealthy people," said Ancken, who added that many foreign buyers were giving the city the cold shoulder because they believe the condo market here has peaked.
However, according to Patricia Warburg Cliff, senior vice president & director of European sales for the Corcoran Group, there are still plenty of investors out there, particularly Korean and Irish buyers.
"Manhattan is still a good place to park your money," said Cliff. "And, every time there's a hiccup in the world politically, people look for a refuge in case things go downhill in their own country."
Teplitzky agreed. "The image of New York City has improved. It's cleaner, safer and foreign buyers just want a piece of the Big Apple."
According to Cliff, technology professionals, actors, entrepreneurs and those from the financial services sector have become the buyers propping up the higher-end of the market, although she said developers are also doing everything they should to attract the new influx of family buyers whose migration back into the city has become a significant trend.
"20 years ago, couples would have a child then move to Massapequa, but now they are gravitating to the city because the buildings that are coming up have such amenities as playgrounds: everythiqg conceivable to adapt to a young families lifestyle."
One of the premier examples of family-oriented development is Orin Wilf's 170 East End Avenue, a luxury tower of 115 condominiums, some up to 4,900 s/f, that appeal to every member of the family, from parents to teens, 'tweens to toddlers as well as to the sophisticated young Wall Street executive and the empty-nester. The 12,000 s/f building includes a squash court, golf simulator, yoga, pilates and dance studio, toddler's playroom, arts and crafts room as well as an interactive center complete with everything from the last word in computer games to arcade favorites including PlayStations, air hockey and pinball. There's also a 40-seat screening room, billiards room and a library.
When Wilf first announced his plans for the development, he told Real Estate Weekly, "There have been no buildings ever built in Manhattan that have taken consideration of the family living style and what a family needs to help them with their lives. To be able to come to 170 East End Avenue and have a concierge who can take care of the babysitting, help you get applications for the local schools, who'll know the people who run the schools and who can help make everything just a little bit easier for you, is priceless.
"My family life is very important. As a businessman and person who works hard, I cherish the time I get to spend with my family. I want to be able to give them a great life and be able to grow up and have what they need right here in New York City."
But across the Hudson River. companies such as R. Hovnanian Homes are giving the city a run for its money with a plethora of mixed use communities that offer not only family-friendly units, retail and leisure components, but spectacular views of Manhattan as well as an easy commute by ferry or lightrail.
The home builder has just recently scrapped its policy of solo brokering and is tempting Manhattan brokers to bring buyers to the Gold Coast with a full 3% commission deal.
Douglas Fenichel, regional director of public relations for K. Hovnanian, said the company recognized that, in the current market, it had to reach out to work with the brokers in the community, but added that buyers both from the city and elsewhere continued to take advantage of historically low interest rates to fulfill their American dream on the Jersey side of the tunnel.
Fenichel also noted that, with developemnt restrictions limiting the number of condos that can be built along the Hudson, buyers are "striking while the iron's hot."
He said, "We're seeing buyers coming from both the city and New Jersey. There is a steady demand for homes and it's a demand that's not being met. Because of regulations in place in New York and New Jersey, people see the possibility of owning a home that looks across the river at the best view in the country and realize that there aren't that many homes like that available."
He agreed that, while there appear to be less buyers on the market, those who are out there are serious buyers.
"There aren't too many opportunities to leverage a relatively small amount of money to purchase an asset like a home and, at the end of the day, a home is a lot more than an investment, it's a place to take solace from the world and enjoy your family. When you add to that the amenities and the views being offered on the Gold Coast, it's no wonder we're seeing good sales here."
Back in the city, the new condos are also attracting young, financially independent first-time buyers who were previously forced to rent because they couldn't meet strict co-op finance stipulations.
"[These first time buyers] don't have to have so much in way of assets for new condos," said Cliff. "Most put down 50% when they get their bonus, but they don't have to have another $3 million left in liquid assets to satisfy the co-op board. And, it's a nice, clean transaction--they don't have to renovate and there are a lot of great starter homes for young people who make a lot of money but don't have a lot of assets."
Yet another group of buyers, according to Cliff, are corporations. "There are so few hotel rooms and rates are so high, corporations are buying apartments for their top executives to stay in when they visit New York on business."
Cliff predicts a steady sales year, noting, "I see the absorption rate at places such as 15 Central Park West, which was 75% sold out in a matter of months, so I'm not worried.
"I sold a penthouse for $5,000 s/f in 15 CPW--that's just shy of $30 million for a second home. At 200 Chamber street in Tribecea they are 70% sold out. There's plenty of money out there, there just isn't enough inventory."
With rents going through the roof, Teplitzky also predicts a steady market for the next several months at least.
She commented, "Buying instead of renting seems to be the only resort for New Yorkers. Renters have no other choice than to pay $5,000 to $6,000 a month, so it really is better to buy than rent.
"Certainly the market might be down in other areas of the country, but it hasn't hit New York."
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Residential: Marketing & Brokerage: SECTION|
|Publication:||Real Estate Weekly|
|Date:||Sep 20, 2006|
|Previous Article:||What condo buyers need to know: do you take American Express?|
|Next Article:||REBNY's new lawyer-on-call solving all life's mysteries.|