Robust and Rigorous: August Brighter Report

August 30, 2019

Median Sales Price for new developments is on a downward trend.

August was Robust and Rigorous
I'm listening to History Hyenas, a hilarious podcast featuring Yannis Pappas and Chris DeStefano. If you haven't met Maurica or the Bay Ridge Boys, check em out!
 
As a Born and Raised Brooklynite, it's nice to hear some voices that hearken back to the old New York, or at least let you remember that part of the reason Real Estate prices have gone way up, is because the city is safer and cleaner than it has ever been. 

Even though the frame of reference is definitely not Crown Heights in the 80s, I totally identify. Their content is super New York, unapologetic comedy, and hiliggity (mad funny). 

NB, it is not a real estate podcast but since when does culture not inform RE. Dass It! *Disclaimer: Adult Language and not PC, fyi.
 
• Back to School Means Parents Can Get Back to Being Productive
 
I only have a kid in day care, but this summer was exhausting making the best use of the city's Ferries, Parks, Waterfronts, Sprinklers, and Beaches

So many memories, but I do think we averaged 5 hours of walking per weekend and I probably did like 8 sets of Beach Body Workout lugging Sand Affiliated Paraphernalia from the Uber/LIRR to the Shore. 

SO yeah. I can't imagine what it would be like having beautiful children in need of supervision, edutainment, and physical activity ALL summer, while having to work and sneak drinks in so Parents can still feel like autonomous people. 

Shout out to the Parentals who can now focus on Phonics, Binomials, and Social Studies... (Is that still a thing?)

For those of you looking to move to a new school district, you can still switch in Winter, and your kid can be the edgy new addition to the cast of classroom characters.

While I can't advise on school districts, or even "family-friendly" neighborhoods, I can 100% help you find the home of your dreams with the easiest commute money can buy! #fairhousing #justdidmycontinuinged. 
 
• Q4 Big Purchase & Investment Season

For those of you who are looking to purchase property in NYC as a cash-flowing investment, Q4 is looking Righteous. Tons of nerd charts and talking points below.

Market conditions in the sector where Days on Market is pushing past 180 days mean impatient sellers will be ready to do deals come to Holiday Season. Gobble Gobble to Christmas Cookies. 

Send me a message to start the process!
 

• Recession on the Horizon?

I am not a pink paper reading armchair economist, but Keller Williams’ New York CEO says a recession is on the horizon.

Citing the inversion of the yield curve and declining manufacturing output, Keller Williams’ Mark Chin said in a recent interview that a recession was likely but it wouldn’t be anywhere near as devastating as the 2008 collapse.

You gotta get behind the paywall on Inman to read the article, but here's a telling slide from our sales meeting.



What does it mean for you?

For sellers: Price aggressively to take real and perceived risk of external factors on buyer liquidity off the table.

For buyers: Use looming recession, US/China Trade War, and Brexit in negotiating better prices due to potential effect of these macroeconomic events on the general buyer pool.

 


LIVE BRIGHTER!
NERD CHARTS / PRETTY DATA PICTURES

[Supply continues to diminish through Q3. Overall inventory has increased 10% YTD but is down almost 11% from the prior month.]


[Monthly new supply in Manhattan peaked in April 2019 at 2,078 listings and, has reached its lowest point YTD in July at 1,018 listings & is trending toward a continued decline in August.]





Key Takeaways

Supply - The number of properties for sale increased over the course of the first half of the year and has continued to decrease over the back half of 2019.

Median - Sales Price for new condo developments is on a downward trend due to rising days on the market and months of supply in higher price ranges of $3M+.




For Sellers:

• Average price per sq ft is stable at best.
• Market has the most options for Manhattan buyers since 2012.
• 33% increase in days on market Y-O-Y will drive continued Price Capitulation
.




Key Takeaways: This graph simply shows that fewer listings are trading over the asking price.
 
The vast majority of the market is trading at or below the asking price, indicating that sellers are likely adjusting their prices to match buyer expectations, either at list or a contract.


For Buyers:

• Capitalize on Q2 buzz. News of recent sales will motivate sellers to do deals. 
• "Value" deals in 1-1.9M range won't last, those low 2M buyers who just missed the Mansion Tax implementation date may descend into your buyer pool
• Unique discount opportunities for unrenovated co-op market due to a surplus of new construction condo product (Major Key).
G.O.O.D CONTENT

Well, if you want to buy a true investment property, you could buy a starter home outside of NYC, in an area where salaries are not as high, there isn't a ton of "luxury" rental product, or there is a microeconomy of transient workers, students, or tourists.

Buying Multifamily in the Boroughs is a great option.

To stay under 1M you need to be in areas with limited Thai Restaurants, Beer Gardens, Curated Vintage/Consignment stores, and Artisanal Cafes.

A quick search revealed East New York, Brownsville, and Cypress Hills in BK.

But then again, new rental legislation passed in Albany could make potential profit thru y-o-y rent increases less tenable as maintenance costs steadily increase.

How New Rent Laws in N.Y. Help All Tenants

Disruptive Country Home

You could buy a house within an hour of the city, rent it on a yearly basis, or flex some design/marketing skill and lease it as a mercenary country house. A place where City Folk can buy some meat, bring some alcohol, and unwind a bit (with Netflix, Spotify, and hopefully a pool). This is my favorite. 

I love the idea of renting the apartment I like and can afford in the city, and owning a "country home" that I have access to whenever I want, but realistically will only use a handful of times a year, that I can rent to similar NYCers when they get that thirst for nature, chlorinated pools, and "authentic" farm to table dining in a suburban setting.

You could buy pre-construction as a speculator (ideally in a cheaper market) with limited supply of like kind, and sell upon completion.

Out-of-State Investment

There are also luxury properties in other cities like Miami and Austin, that are much more affordable, and may even allow you to AirBNB your unit or have it professionally managed and leased. *Setting up next Section.

Natiivo AirBNB powered condos in Miami/Austin
So people travel more on vacation, are less likely to make a long term commitment to a city, enjoy a fairly even quality of "digitally connected" life in multiple locations, have less disposable income due to increased consumerism, AND are completely fine renting a property that is sexy and meets their preferences for modern luxury and convenience. But who will manage my property, what will be the restrictions on short-term sublets?

Enter Natiivo. AirBNB powered condos built to accommodate investor demand for flexible sublet terms, and market demand for luxury accommodations that better suit lifestyles indivisible by 12.

Natiivo is launching In Austin and Miami, while I have been to Austin and KW is based in Austin, I spend more time in Miami, and have access to friends and family pricing for the launch. Please send me a message to learn more. Here are some articles and Soundbytes.

"The 48-story tower, with roughly 600 units, will have about 400 condos and 200 Natiivo hotel units, according to a release. Cervera Real Estate was hired to handle sales and marketing of the condo units. The project, designed by Arquitectonica, is expected to open in the spring of 2022. Urban Robot is handling interior design. Prices start at $300,000."

The Real Deal

"A new downtown Miami high-rise being unveiled Tuesday is promising buyers the chance to profit from their luxury units through Airbnb without running afoul of the condo board.

The first Natiivo buildings are planned for Miami and Austin through a partnership between Miami-based real estate company NGD Homesharing and Airbnb. They are slated to open in spring 2022.

“Basically, these are the first buildings built, designed and licensed for homesharing,” said Harvey Hernandez, CEO of NGD Homesharing."

Miami Herald
Move to Miami
No Personal Income Tax, tropical weather, luxury housing stock at a discount...
Easy Flight to NYC if you have to comeback to take a meeting. What more could you ask for?
 

After several trips to Miami, 1 closed deal, and a lot of relationship/data mining. I have compiled a shortlist of newly constructed condos that I can introduce you to, including pre-construction projects that could yield a sizeable profit in 3 years. 
 

Obviously I can't quantify or promise that sizeable return, but when a globally recognized luxury brand provides 50,000sf of amenity space, a shuttle yacht to a private island, and world-class design on a tiny sliver of bayfront land, it becomes a bit more believable than just another cookiecutter glass tower.
 
BRIGHTEST SUMMATIONS
BUYERS
 
In short, it is still a good time to buy, if that is your prerogative, indecision and shifting attitudes towards homeownership are making it easier to purchase a home you like, so long as you are not being unrealistic with expected quality.

Hit me up and I will guide you to the best possible deal on the market for your budget and search parameters.

RENTERS
 
Whether you are looking for w/d, d/w convenience, or doorman/gym/roof deck luxury, while the cost of rent is high, it is relatively cheaper than ownership, with more flexibility. 

I rent. And barring an extra/unexpected $250k and a sudden interest in learning to drive, I will probably continue to do so. 

Being creative in scope can yield new opportunities for investment in personal development, entrepreneurship, and more affordable markets or platforms for fractional ownership.

INVESTORS
 
On a global/cosmopolitan scale, NYC is still relatively inexpensive for everything the city has to offer. Think London, Paris, Shanghai, Singapore, Dubai, etc.

If your target renter is looking to spend 5-8k a month, you can still find property in Manhattan, BK, and LIC. Think 35+ single or with family would rather pay a premium for a quality product that is luxe but not cookie cutter.

If you are looking to buy a multifamily, live in a unit, and rent out 1-3 to defray/offset your mortgage. Still possible between 1M and 2M.

If you are looking to buy a vacation property or self-managed short-term rentals, this is more complicated. Contact me.

Follow me on IG @BRIGHTERBROKER
 
Look for new updates to the website, and a new holistic approach to the way you as newsletter enthusiasts can interact with and continue to advocate for the BRIGHTER Brand.

UNTIL NEXT TIME.
#LIVEBRIGHTER
How can I help you?
Buyers: 150k-15M. 
Sellers: 500k-5M. 
Renters: 1800-18k per month.

Areas Served. 
All Manhattan.
All Brooklyn: accessible by train, 1 fare zones.
Queens: LIC/Astoria, Forest Hills, Jackson Heights
Bronx: accessible by train, 1 fare zones.

Property Types:
Rentals: Doorman, Walkup, Elevator, Loft, Townhouse
Sales: Condo, Coop, Condop, Townhouse/Brownstone
Commercial: Office Leasing, Retail Leasing, Investment Sales

Copyright © 2016-2019
Brighter Real Estate Group
All rights reserved.


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