New York City Residential Rental Market Report: March 2020

The Corcoran Group’s newly released Rental Market Analysis for March 2020 finds that compared to the month prior, rents in Manhattan and Brooklyn increased for some apartment categories, but declined for others, which suggests that the current public health crisis has not yet influenced overall pricing. 

While changes to Manhattan rents varied by apartment size year-over-year, rents increased across the board in Brooklyn, which reflects the borough’s increased desirability to tenants. 

From February to March, rents for Manhattan studio and two-bedroom apartments decreased 2%, while they declined 10% for one-bedroom homes.  In contrast, rents for three-bedroom units climbed a substantial 32%. A signed lease for a $25,000 per month rental at The Halcyon (305 East 51st Street) caused this noteworthy jump. 

In Brooklyn, rent changes were a mixed bag as well.  Pricing for smaller apartment sizes (studios and one-bedrooms) increased 5% and 2% respectively.  Meanwhile, rents for two- and three-bedroom homes were down 3% and 2%. 

When examining concessions, 34% of rental transactions brokered by The Corcoran Group offered a free month’s rent and/or payment of the broker fee to entice new tenants in March 2020 –higher than the 30% in February.  The percentage of concessions is also up from the same period last year.  In March 2019, 29% of leases included one. 

These move-in incentives continued to be much more prevalent in Brooklyn, where they were found on 49% of leases in March 2020 – versus 28% of Manhattan leases during the same period. 

In March, the Manhattan vacancy rate was 1.12% – nearly unchanged from February’s rate of 1.11%.  It is the lowest vacancy rate seen since August 2019 (when it was 1.17%).  We attribute the steady (but low) vacancy rate to the fact that due to the pandemic, many tenants are simply staying put. 

Additional relevant findings of the March 2020 Corcoran rental report are outlined below.   

In March 2020, the average monthly rental price for a Manhattan studio was $2,408. For one-bedroom homes, the average was $3,031.  For two-bedrooms, the average rent was $4,266.  Finally, the average three-bedroom apartment rented for $8,127.** (impacted by the $25K The Halcyon rental noted above) 

Brooklyn studio apartments (in the 14 neighborhoods studied) rented for $2,721 per month on average.  For Brooklyn one-bedrooms, the average rent was $3,216 – while rents for two- and three-bedrooms clocked in at $3,986 and $5,367 respectively. 

The most expensive Manhattan neighborhood for renters in March was SoHo/TriBeCa with a median rent of $7,255.  The West Village was the second-priciest area – with a median rent of $4,195. 

For Brooklyn, DUMBO was the most expensive neighborhood with a median rent of $4,675 – followed by Brooklyn Heights, where the median rent was $4,005 per month. 

Manhattan rents were lowest in March 2020 in Morningside/Washington Heights, with a median rent of $2,260.  When examining neighborhoods below 96th Street, Murray Hill was the least-expensive neighborhood for renters, with a median rent of $2,600. 

Bedford-Stuyvesant, with a median March rent of $2,550, was the least-expensive Brooklyn neighborhood tracked in our report, followed by Bushwick– where the median rent was $2,575. 

With a vacancy rate of 0.85%, the Upper East Side was the Manhattan neighborhood with least inventory in March 2020, followed by Murray Hill at 0.89%.  On the other end of the spectrum, the vacancy rate was highest in Midtown West (at 1.29%) and the Upper West Side (at 1.28%). 

Click here to view market statistics from February 2020, and click here to view market statistics from prior months. 

Click Here To Read The Full Report 

The Value of Outdoor Space

Private outdoor space in New York City is a luxury to say the least. Whether you're peering over from your balcony to buzz up the delivery man, sipping the morning coffee on your terrace, watching the sunset from your roof top cabana or grilling "shrimps on the barbie" in the garden with your friends – a balcony, terrace, cabana, or garden space is just about as "outdoorsy" as it gets in NYC. This week we are featuring a look at the value of this precious outdoor space that we love so dearly.  

Q: How do you put a price on outdoor space?

A: Pricing outdoor space is determined by a number of factors. First, one must consider the use of the space, design, size, views, private or shared, and its proximity to the kitchen.  For example, private terraces are obviously priced higher than shared terraces. Being able to walk out to terrace from your bedroom is convenient, but having a balcony or terrace with an entrance from your living room is more desirable for entertaining guests and more valuable. Who wants to have theirs guests traipse through their bedroom to get to the outdoor space. Size clearly matters too, but there is a sense of utility placed on every space.  For example, 500 square feet (SF) is perfect for a table, lounge area and grill area, but perhaps a 1,000 SF is just not necessary. In this case, many buyers may not want to purchase an expensive space like this so the buyer pool is narrow and hence base on supply and demand, the value will typically be less per square foot if the space is too large. 

See below for different multiples to be applied to outdoor space in order to arrive at the fair market value. These multiples are applied to the interior price per square foot of the given building. 

Garden space: ~25%

Outdoor space with views: ~50%

Outdoor space without views: ~33%

Additional characteristics affecting the valuation of outdoor space include but are not limited to direct light, shade, views, layout, planted, noise level, quality, ability to grill, the building itself, location, privacy, etc. All of these factors will help to determine how the multiplier scale of ~25% to ~50% of the interior square footage of the building will be applied. 

What about BBQing in NYC?
Summer in the city is a season for entertaining, enjoying the outdoors, and of course barbecuing! Did you know that propane grills are not allowed in New York City? The NYC Fuel Gas Code states that you can't store standard backyard propane on a balcony, roof deck, backyard, or in a courtyard [1]

In FAQ’s for Those Lucky to Have Outdoor Space, The Brick Underground also shares that, “You can use a propane tank that’s smaller than 16.4 ounces in some cases. Remember, you can be slapped with fines of up to $10,000 or more if you don’t comply, although the law is mostly unenforced.”  Fines this serious are simply necessary because the fire department doesn’t have enough manpower or time to check every terrace, therefore if you’re caught violating the law and using propane gas to BBQ you will be fined.

On a brighter note, according to New York City’s Department of Buildings, “Cooking with a charcoal barbecue is legal on a terrace or in a backyard — but not on a balcony or roof. There must be a 10-foot clearance between the grill and the building.” If you get really lucky some buildings like 125 North 10th Street, actually have induvial gas line connections installed, so yes BBQing is legal, safe, and a favorite pass time for residents who own cabanas.

It could be a conversation piece, an additional extension for entertaining, or even your private escape from four walls - it's really not classified as traditional "living space", but regardless it's coveted space and adds value to your property. 

Sources:

[1] Https://www.brickunderground.com/blog/2013/05/outdoor_in_nyc_faqs_from_those_lucky_enough_to_have_patio_roofdecks_and_gardens

[2]

http://streeteasy.com/talk/discussion/2247-how-to-price-outdoor-space-deck-balcony-garden-and-basements

2015 - Multi-Million Dollar Club

What a great way to start the New Year!
I'd like to thank my customers, family and friends for making 2015 another successful year.

The Road to a Successful Closing - No Detours!

Dropbox Link to a PDF Version

Purchasing property in Manhattan can seem like a maze at times, but our helpful info-graphic above and our three critical "next steps" below will illuminate the proper path to a successful closing! Preparing financially is the most important aspect to purchasing an apartment and it is commonly left to the last moment by the majority of buyers. Below is designed to initially explain the three key components of every co-op purchase and what everyone will need to proceed:

Ø  Financial Statement – Full disclosure of your finances is required with every offer. Please note: When working as a buyer’s broker, I have a fiduciary responsibility to my customers through reasonable care, undivided loyalty, confidentiality, full disclosure, obedience, and duty to account. An accurate assessment of the following is required:

Liquid Assets (cash, money market and brokerage accounts)

Retirement Assets (or any other long term assets)

Income (salary, bonus, interest, dividends and any of miscellaneous income)

Liabilities (any debts)

Generally, co-op's will require supporting documentation once we have a fully executed contract of sale. Below are important ratios used by co-ops as a standard to qualify buyers. 

Debt to income ratio (typically needs to 28% or less) this is all of your monthly debt plus the new mortgage and maintenance/taxes divided by your total gross monthly income including any bonuses. 

Cash reserves – Most co-ops require 2 years of mortgage maintenance and taxes to be in “liquid” reserves after closing.  They do not consider IRAs, 401Ks Keoghs, TIA CREFFs, or Real Estate assets to be liquid, unless you are over the age of 65.

Ø  Pre-Approval Letter – It is important to know your borrowing potential, especially now with lender’s tightening credit standards. A mortgage banker will qualify you and indicate what documents are required and ask to pull your credit. This will offer you piece of mind, determine your purchasing power, define the current mortgage rates and help us determine your monthly expenses. This letter is also required with every offer.

Ø  Attorney – Once we have an accepted offer, they will offer important advice throughout the process and conduct due-diligence. This is a must expense for even the most savvy investors and it is highly recommended to use a Manhattan based real estate attorney who knows the business. They will look over the co-op’s minutes, budget, tax statements/returns, contract, and prospectus/offering plan. They will review all of the closing papers, walk you through the closing and will also advise you of potential risks.

Sold! Another Successful Transaction

353 East 72nd Street, 5B

This south facing one bedroom with wall to wall windows throughout is filled with sunlight and has beautiful tree top views. In this case, the unit was only on the market for 36 days! In today’s complex real estate market, it is imperative to work with an expert who understands the unique process of selling in your specific building and neighborhood. See the link below for more details about this sunny residence.

See Property Here!

New Studio Listing in Williamsburg!

242 South 1st Street, 2F

Here's Your Chance to own a REAL Williamsburg LOFT! This stunning and sunlit studio LOFT plus Balcony is in Williamsburg's sought after LOFTS1 Condominium. Formerly a cheesecake factory built in 1911, this four story Williamsburg conversion is complete with fine finishes and modern amenities while preserving much of its authentic pre-war warehouse detail including wide plank maple wood flooring and the original exposed concrete beamed ceilings. There are upgrades galore including ceiling fan with LED light, window in wall, German-made ironwork outdoor lighting fixture, entryway LED lighting fixture, o
verhead chandelier, a custom Murphy bed and closet system and automatic blackout blinds

The building is a block from the Grand Street Shopping District (home of the upcoming Whole Foods and Apple store), and several more blocks from the Bedford Avenue strip and L train. The Marcy Avenue J, M, Z is also just short walk away. Superb opportunity to explore and experience Williamsburg's hottest venues, restaurants, bars, shopping and nightlife at your fingertips! Pets are allowed. Interior photos will be posted over the weekend.

For more details, click Here

The history of keys goes back for thousands of years, reaching the very first moments when modern human civilization established their reign and started developing sciences and technologies enabling the birth and growth of our present way of life. Even in those ancient times, people wanted the ability to safeguard their possessions and store them in places where nobody else could have access to them. 

For that purpose , engineers, designers and scientists created the first example of keys. Keys represent possession and when speaking about residential real estate, possession is 9/10ths of the law. You provide the keys to the buyer when selling and hopefully obtain a fair value in exchange, A more memorable experience is when you obtain the keys to your new home. We strive to be present in these joyful moments and ensure you maximize your investment. Call us today for a complimentary market evaluation. 

Listings in Manhattan:

269 West 72nd Street, 6CD
http://www.corcoran.com/nyc/Listings/Display/3482238

1991 Broadway, 3C
http://www.corcoran.com/nyc/Listings/Display/3497266

The Accidental Skyline Tool

Ever wonder why that skyscraper popped up next to your building and took away your lot line windows? Or why SoHo and the East Village do not have the same building heights as the rest of the city? Well, you're in luck! Above is a great tool to research, visualize and understand how real estate development and FAR works in New York City. Whether you are a beginner to real estate or an expert, this is a very handy tool to bookmark and look into. Click the photo above to check out the interactive map.

Too often, New Yorkers are caught off guard by new development in their neighborhoods. The Accidental Skyline offers tools to help demystify the city planning process and bring the public into the conversation.

The maps above show where new development could occur across New York City – allowing New Yorkers to assess how their neighborhoods could be impacted. These maps add to a body of work available on this site, including The Accidental Skyline, presentations and media coverage. Additional reports will highlight how other cities are responding to these challenges.
~via MASNYC

Tips on using the maps

How transferable air rights work
Data sources

Draw Where You Think Your Neighborhood Borders

"New York is a city of neighborhoods, and debating where those neighborhoods begin and end is a time-honored tradition. Longtime Lower East Siders reject its subdivision into the East Village. Uptown Manhattan residents feud over whether Thayer Street is part of Inwood or Washington Heights. Some Brooklynites insist 4th Avenue is in Park Slope, while others insist it's Gowanus.

"You could take two people who live side by side and ask them 'what are the boundaries of the neighborhood in which you live?' and you'll get two answers," Bronx historian Lloyd Ultan said.

It turns out there's a good reason those debates haven't been settled: the city doesn't have official neighborhood boundaries. According to Department of City Planning spokeswoman Rachaele Raynoff, officials have a general idea of where neighborhoods are and even has a map of the city's neighborhoods, but lines are a different story.

"We've never put down boundaries," Raynoff said. "Community districts are what are in the City Charter." City Planning does have something called a "Neighborhood Tabulation Area," but Raynoff stressed that these lines are only approximations of neighborhoods created purely for statistical purposes. So with no official answer coming, we're leaving it to you, dear readers: use the map to draw where you think your neighborhood's borders are.

When you finish you can compare your boundaries to those of other residents in your neighborhood — and once we've collected enough results we'll share the consensus and see if we can finally settle this feud once and for all."

~ Nigel Chiwaya | August 11, 2015

Renovating your Dream Home

If you play your cards right, buying a charming fixer upper to renovate can be a very profitable venture. See below for some tips on how to stack the deck in your favor.

1.    Buy for the right price! An ideal purchase is a truly dated property. The one most people would enter and say, “Oh my God! This is going to take a lot of work…” or the one that has just been so distastefully decorated that the average buyer cannot look past the atrocities. These properties are typically priced well below market and without much interest the perfect opportunity may present itself to snag a deal. 

2.    Good Bones is a must. For a Condo or a Co-op you are generally looking for cosmetic fixes, a new kitchen, new bath, refinishing the floors and painting the walls. Be certain that your construction plans are feasible, both financially and legislatively. Some buildings, particularly co-ops, have very strict rules about wet over dry, adding a washer/dryer in the unit and how construction should be done. Be sure to have your attorney ask about this information prior to closing the deal. If you are buying a townhouse, a home inspection is a must. These are typical townhouse expenses; new roof: $10,000 - $20,000, new windows: $10,000, new plumbing: $10,000 and new electrical: $8,000. Be cautious of any structural issues. A little settling is normal, but heavy leans or horizontal cracks in the foundation are a good indication the property does not have “good bones”.

3.    Add onto the building if you can. If you are buying a townhouse, look at the Floor to Area Ratio (FAR) of the property. This will let you know how many additional sqft you are allowed to add on via the department of buildings. As real estate values are generally devised from square footage, adding square footage is the surest way to increase your property value. IE: a three unit townhome with two thousand square feet and a purchase price of $1,440,000, or $699 per sqft. The owner does a full scale renovation including a three story addition of 383 sqft for a cost of $250,000. The new home is 2443 square feet, which at the pre-renovated price per square foot would be valued at $1,707,657 and completely cover the cost of the renovation. The new renovation price per square foot would be higher ($100 - $200 more) than it was pre-renovated, and all of that becomes pure profit. When doing your calculations, everything that was added counts towards your FAR, even a deck.

4.    Renovate with others in mind. If you are planning to live in your home after renovating, think of the needs of your family. Do not get too specific in terms of taste or layout, as you want your space to translate well for the next buyer. Avoid this mistake: While an oversized master suite or an open living room may be ideal for your family, never take a three bedroom down to a two because you are cutting your resale value immediately. Likewise, while you may love rose patterned tiles, it is better to keep the tiles neutral and opt for rose patterned towels instead.

5.    Choose your finishes wisely. There are certain items that make an apartment’s entry a “wow moment” and can also make the entire unit feel very luxurious, thus upping the value. Standout items such as kitchen appliances or high end countertops can go a long way to hiding Ikea or other pre-fab cabinets. Another trick: Use high end hardware and faucets to make a cheap vanity look polished and well done. Be wary of paying for the brand name, however. While a professional grade stove may be on everyone’s wish list, paying for Viking or Subzero may not be the only way to go. The best finishes on the market might not significantly increase your return so spend $300 - $500 for a moderate, beautiful piece. Finishes rapidly increase the budget so it is important to have a few splurge items that will really elevate the look of your home.

6.    Get the right help. If you are renovating in New York, you will need a licensed and insured contractor, an architect and an expeditor if there is any potential structural work. If possible, always use a referral from someone you know. Your real estate broker can be a valuable resource as well. Check your local websites for helpful information. Brownstoner.com and Brickunderground.com cover everything under the sun. Lastly, make sure to do a full internet search on everyone you hire. I have heard horror stories from people trying to get contractors and subcontractors to show up, only to find they are wanted in New Jersey for defrauding customers! 

7.    If the project is DIY (Do It Yourself), make sure to have plenty of time and patience to get the job done. Generally speaking, it is best to leave the work to the professionals because you never know what you are going to find. The potential to further damage your home is not worth the risk. Alternatively, you can build your own Ikea furniture or cabinets and/or paint the walls to satisfy your DIY yearnings.

8.    If you have any kind of structural work or additions taking place in your home, the approval of the Department of Buildings will be needed prior to any permits being issued and any work being done. In this case, the architect and expeditor are the ones who will handle everything with the Department of Buildings. Therefore, the architect and his expediter are the two most important individuals on your team. Anticipating, deciphering and fulfilling the needs of the DOB is a true art form and if you have someone who knows how to do this properly it can save you time, aggravation and money. Be sure you feel comfortable with your selections here and know that what the DOB says - goes. The renovation process could take months so expect changes, additions and several rejections prior to approval.

9.    When all is said and done, renovating is really worth it. Finding a well valued property and doing the renovation work can lead to a large return on investment. Especially if the project is completed logically and efficiently.

Here are some examples of real New Yorker's who have been there, done that and are smiling all the way to the bank!

749 Union Street, Apt 1L
Purchased for: $640,040
Sold for: $975,000
Approximate Renovation Cost: $75,000
Approximate Profit: $259,960

198 11th Street (Townhouse)
Purchased for: $1,440,000
Estimated Market Value: $2,100,000
Approximate Renovation Coast: $300,000
Approximate Profit: $360,000

"Drinking Kool-Aid keeping Corcoran’s Jeff Nolan at top of his game"

Many thanks to Holly Dutton! See below for an excerpt of her article:

"When Nolan was first starting out at Corcoran, he met a woman through networking that became one of his first clients, and he helped her purchase an apartment. Six years later, she called him up out of the blue, saying she was looking to get into real estate.

“I said, work for me,” said Nolan. With that, she became his assistant, and then later, moved up to become a salesperson with Corcoran, where she still works.

Nolan estimates that in the seven years he’s been in the residential real estate industry, he’s generated..."

Real Estate Weekly Article by Holly Dutton