Archives
June 2006
Jun. 30, 2006 - the newest new kitchen (in Flatiron, not Chelsea)
Here’s a new one in the G4 series, which will have to be G4.3: the “pod” kitchens of Jade Jagger (yes, that Jagger) in the new loft conversion at 16 West 19th Street. The pods are free-standing units in the public area of the units that contain storage, a bathroom and a kitchen that – when closed – are ‘jewel boxes’ with highly polished exteriors. (See the official sales site for pix and how this works, and the four color combinations available.)
Kitchens for those who don’t really need one
Triple Mint nails the point about real Manhattan folk who will love these kitchens:
“As much as big chef's kitchens have become de rigeur status symbols in the marketing of New York lofts these days, the truth is that most Manhattan-ites eat out six nights a week. On the seventh night they use their kitchen to soften a pint of ice cream. Face it, the most important kitchen appliance really isn't the stove--it's the corkscrew. These pods are a kind of tacit admission that many people in New York end up living like global nomads. It's the condo as glorified hotel suite.”
They are not for everybody (what is??), but they are probably suitable for the actual lives of more Manhattan condo buyers than the (under-utilized) killer kitchens of most high-end developments – especially given the small size of these Jade lofts.
A return to the Pullman kitchen
The units available for sale to start include a “loft” with as little as 424 square feet, with one bedroom units ranging from 460 to 1,199 square feet; the available two bedroom unit has 1,364 square feet. (Prices look to start in the $1,150 - $1,250 per foot range.) So the pods represent an efficient (and necessary) use of small space. And they do look cool! (At least until you have to open the bathroom side of the pod.)
Small “lofts”
The building is a mid-block commercial building with 12 floors, with a two-story structure with (uncommon) common amenities (reflecting pool, soaking tub, “exotic plants” in addition to the more common sun deck, lounge ad health club). Assuming the 57 apartments will be on floors two through twelve, there will be roughly six units per floor in a building Property Shark shows as being roughly 64’ x 82’, or much less than 1,000 square foot per apartment, on average. Small indeed!
But still “lofts”, on balance, due to the high ceilings, large windows and commercial provenance.
Geography fudge
Evidently, Mick’s girl -- or her Shvo playmates – thinks Chelsea has more cachet than Flatiron.
This building is just west of Fifth Avenue, in the corridor many people (including the Real Estate Board of New York) consider Flatiron. Yet the project is marketed as “Central Chelsea”. Chelsea didn’t used to extend as far east as Sixth Avenue, but these folks are tugging it along yet another block east. East Chelsea would be more accurate, if you are inclined to go there at all, as I would put Central Chelsea just west of Seventh Avenue. But they pay Shvo the big bucks to think outside this (and other) boxes.
But the reviews…
… are not good. At least not on Curbed. At least not so far. The comment about the cheap-wood-paint-finish is troubling; the rest is typically snarky Curbed community. The design is different, yes; but I think it will work for some.
More on Jade, the small spaces angle
Squeezing dollars from square feet
Their take is that Jade is part of trend towards smaller spaces in high-end construction that can command premium prices. (Also noted on this trend is the Bryant Park Tower at 100 West 39 Street, which is 65% studios, and 88 Greenwich Street.)
The Jade’s mix is noted as 24 studios, 14 one-bedrooms, 11 one-bedrooms + home office, 4 two-bedrooms and the two penthouse three-bedrooms.
The article closes with some classic one-the-one-hand-on-the-other-hand commentary about values:
Smaller apartments are historically more sensitive to interest rate moves. According the Max Dobens, an agent with the Jacky Teplitzky team at Prudential Douglas Elliman, "If you have an increase in interest rates, the first people to pull out of the market are the studio and one-bedroom buyers."
But Dobens thinks Jade's smallness should insulate it. "Because Jade is not a 400-unit building, it'll do OK at the end of the day."
Chelsea independent broker Fionn Campbell agrees that the mix of smaller apartments should work. "A lot of investors have been priced out of the market. The price point at the Jade could attract investors buying to flip or parents buying for their children -- and a lot of single people who can't afford other buildings in Chelsea," he said. "I wouldn't be surprised if they sell the whole thing in one day."
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Jun. 27, 2006 - If all news is good news (follow-up on grown-ups who smile to much)
National price appreciation to be up 5.7% in 2006 and 4.2% in 2007?
Lereah in the July issue of REALTOR® Magazine projects home sale price appreciation for 2006 and 2007 as being 5.7% and 4.2%, with the numbers of homes sold in the country projected as 6.62 million and 6.7 million. Fair enough (to me), as he is the expert and has access to all sorts of data.
But then he says that
A soft landing with cooling sales and easing appreciation this year will help the market in two ways.
First, it’ll give household income a chance to gain ground lost to home prices.
Second, it will drive safety-conscious buyers back into more stable fixed-rate financing products.
I don’t get that, either first or second.
How can income keep up with that?
First, I don’t have the hard data but I doubt that real average household income will increase 5.7% in 2006 and 4.2% in 2007 (by “real average household income” I mean to exclude the impact on the average of the Gates, Buffett and other super-compensated households; seems to me I have seen reports that real wages are stagnant or falling … but I digress…). If household income increases by less than 5.7% in 2006 (and less than 4.2% in 2007), then household income will not “gain ground lost to home prices”; it will just lose ground less quickly.
I guess that is good news, but not the same good news that Lereah claims it to be. And certainly not as much good news.
What more motivation do safety conscious buyers need?
Second, I don’t see the connection that Lereah sees between slower home price appreciation and motivation of “safety-conscious buyers” to use “more stable fixed-rate financing products” rather than more exotic loans. Seems to me that “safety-conscious buyers” have enough motivation to go fixed-rate from the Fed’s continued campaign to raise interest rates. But maybe I am missing something….
This kind of spin on this kind of data (or projections) does not seem to me to be helpful. If all news is good news, credibility is bad.
If he keeps this up, Lereah’s credibility will be down 5.7% in 2006 and 4.2% in 2007. Or more.
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Jun. 22, 2006 - Building BOOM downtown – measuring pain one truck at a time
NY Newsday ran an article this week from the AP about some very real costs associated with the building boom (emphasis on ‘boom’), especially downtown Manhattan: jackhammers and pile drivers going from early until late.
Noise, dust, vibration and general congestion on sidewalks and streets will be near-term problems for many folks downtown. Battery Park City will have the new Goldman Sachs HQ construction to the north and several new residential buildings to the south, as well as being hemmed in to eth east by the WTC site. Other folks near the WTC will suffer more or less, depending on wind and traffic flow.
How much traffic? One truck every 3-5 minutes for one year, just for the excavation work for 3 towers at WTC, according to Newsday: “When contractors begin excavating to build three new towers at the trade center site, [Charles] Maikish [executive director of the Lower Manhattan Construction Command Center] said, ‘they're going to be running trucks every three to five minutes for a period of 12 months’." That can’t be good for Holland Tunnel traffic…
One (small) piece of relative good news for the WTC area development that I read about recently [can’t put my cursor on an article at he moment] is that the blasting being done for foundation work is well-muffled, at least for now. It is hard to believe, but I did see multiple reports that people on street level a block away would not have been aware of the blasting apart from the warning whistles. Hope that is true and that it continues.
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Jun. 21, 2006 - G4.2 a new generation of Loft kitchens – “post-open”
Original Manhattan lofts often had kitchens that matched the authentic industrial feel of the space: they were open to the rest of the space and more functional than stylish; perhaps an industrial sink, more likely to have shelves rather than cabinets, “basic” appliances. Call those G1 loft kitchens.
Fast forward to a (developing?) new style loft kitchens, which I will dub G4.2 loft kitchens but the NY Times calls “guy décor”: closed kitchens that have more in common with grand prewar apartments than with classic lofts, or even with modern luxury lofts.
“Cozy” in a loft kitchen??
Rick Marin in the Times talks about (nearly) returning to the closed kitchen of his youth when he renovated his kitchen to suit his new lifestyle (ten years earlier, “open kitchens were integral to the cool, sophisticated loft lifestyle to which I aspired”.)
He implicitly blames Emeril Lagasse, Bobby Flay, Mario Batali and other TV super-chefs for the trend toward high-end open kitchen, the kind of kitchen his wife hates:
“the arrival of the husband in the kitchen, roughly concomitant with the advent of the Food Network, was a major event. He demanded huge, manly appliances with Teutonic names like Viking and Wolf. Not only did the act of cooking become a part of the culture of American society, but watching people cook became a desirable activity. And helping to cook became a matter of etiquette, as the line between guest and host blurred. Dinner parties took on that vaguely tacky potluck quality that makes my wife, a hostess who values old-school niceties, insane.”
Since kitchens are such a “lifestyle” feature of apartment living, Marin’s new family structure called for “cozy” (when they eat in the kitchen) and “old-school”, when they entertain (presumably, they have a dining area – though he never says so).
If this is a trend for loft kitchens, it will be G4.2.
Kitchen Darwinism in Manhattan lofts
G2 loft kitchens were the upgraded kitchens in original lofts, or the newly built kitchens in loft conversions of the 1970s and 1980s: stylish appliances, higher-end cabinets, butcher block kitchen islands and expensive pots and pans hanging pretty much everywhere.
G3 loft kitchens reflect the arms war, especially in recent developments. As Marin says, the kitchen as fashion accessory: The “open kitchen has become a fashion accessory, the shoes or handbag of the new Manhattan apartment” and he uses the Altair condos at 15 West 20 Street and 32 West 18 Street as the archetypes, with an ad featuring a “youngish couple in matching aprons stand by an open kitchen island — more of a peninsula, really — giddily preparing dinner with five female friends who look as if they might consider spaghetti straps a food group. ‘In a 23-foot kitchen,’ the copy reads, ‘there can never be too many cooks.’”
I can’t put a cursor on that ad at the moment, but two examples of the open kitchens at Altair 20 can be seen in the listing data for the “A” line here and the “B” line here. (If you think my usage of the term “arms race” is a bit over the top, check out the description of these kitchens as “beyond state of the art”, then reconsider.)
Metaphysics for dummies: How do you get beyond state of the art?
If the Altairs (and their similarly breathless competition) represent the G3 loft kitchen, why is Marin’s closed kitchen G4.2 rather than G4? Because the (other) newest loft kitchen style may be coming our way from Milwaukee – of all places.
This G4.1 is the "inside-out" kitchen pictured in the Marin article:
“Diana Murphy, editor in chief of Kitchen & Bath Portfolio, sees a trend toward the inside-out kitchen, citing a loft in Milwaukee, featured in her magazine, in which the customary L shape of the open kitchen is reversed. Instead of being tucked in a corner, its corner juts out into the apartment. Sort of an extreme open kitchen.”
Visually stunning? Of course. But a long way from Point A to Point B in that kitchen.
So maybe G4.1 isn’t likely to catch on … but Marin’s G4.1 may….
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Jun. 20, 2006 - trading 48 apts + 117 parking spaces for an old SoHo garage
starts and fits (“A log about land use and transportation”) had an item on Sunday about the demolition of the garage at Broome & Thompson in SoHo and the plan for a new eight story 48 apartment building. Aaron Donovan’s take is that the exchange of the 188 car garage for a 48 unit apartment building with street retail and 117 parking spaces is a net gain for a more pedestrian-oriented area (though an esthetic loss of the corner medallion of the former garage, pictured in the link).
I guess so.
Not a pedestrian haven to begin with
But this intersection is just east of the Holland Tunnel on a major entry street for tunnel traffic. Evening rush hours are not a very nice time to be a pedestrian at this intersection (or an apartment dweller, I would think).
Donovan suggests that 71 motorists will be “more or less” removed from the road (because of the net loss in parking), but that could take some time. More likely, the near term reaction of people who used to park in that garage is that they drive around and around (and around) more. Then, when the 117 parking spaces are ready, they will return to the intersection like (starlings?) to Capistrano, when the losers who can’t park there start driving around (and around) again.
I guess any reduction in parking spaces should ultimately reduce the number of cars looking for Manhattan parking space – a good thing, undoubtedly -- but this cause-and-effect may take a while.
And I wonder what the tunnel traffic will be like when a lane of traffic is taken up with construction equipment. Can you hear the car horns from where you are?
Can’t fit any lofts here?
I have not seen any news about this development before. Assuming the 7,340 sq ft quoted as retail space is the footprint of the building, the 48 apartments on floors 2 through 8 will average just over 1,000 sq ft. Sounds as though that may be too many units in too little space. And not enough space to be “lofts”.
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Jun. 16, 2006 - Rah, rah, sis boom (or sis bah)? Too much happy talk from grown-ups.
Why do professionals in the real estate brokerage world feel compelled to spin all data toward price appreciation, rather than trying to be honest brokers of information and balanced analysis?
It is probably unfair to select any specific speakers on such a broad indictment, but Corcoran’s chief volunteered with this quote from the New York Times about Q1 06 data: "It shows that the New York market, after having a lackluster fourth quarter, is back in full swing with strong numbers across the board." [the article continued “She said recent transactions logged by her firm suggested that the stronger sales trend would continue into next quarter's figures as well.”]
Does Booster-ism Have a Price?
Leaders of other firms (including mine) have probably been guilty of the same kind of booster-ism. These leaders run the risk of alienating anyone who pays attention to the numbers, which are certainly not uniformly positive for price appreciation.
I noted this whopper from NAR’s President, Tom Stevens, just before Memorial Day, which made me want to gag: “Inventories levels have come up to balanced levels between home buyers and sellers, so the pressure has come off of home prices and most owners can expect steadier gains in home values for the foreseeable future.”
Forecasting the Future (continuing sunshine)
While this may be a defensible general proposition based on past national housing value trends and reasonable forecasts of future national economic trends, but “most” owners own a single home, for whom national and general trends may not apply. To suggest that Joe and Mary Apartment-Owner should comfortably expect to see steady gains for the foreseeable future strikes me as (a) unlikely to assist Joe & Mary if they are unsure about their local market, and (b) invite ridicule from anyone paying close attention to local data that suggests that maybe – just maybe – the near term trends in inventory, employment and pricing portends a possible rough patch ahead.
The boosters seem like reverse Chicken Littles, running around shouting “the sky is not falling for the foreseeable future, the sky is not falling for the foreseeable future.”
Consumers will stop paying attention, at best, and may count the boosters among the sleazy salespeople of ill-repute, at worst.
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Jun. 12, 2006 - Terrific locution, but everything old is …
… new again, in the NY Sun article New York’s Newest Suburb.
I love TriBurbia
Here’s the lead: ‘Welcome to "TriBurBia."’ LOVE that "TriBurBia"! (But shouldn’t that be TriBurbia??)
This reads like one of those everyone-so-often articles that editors ask for. Just imagine the conversation. Ed: “how long has it been since we did an overcrowding in TriBeCa article?” Rep: “Must be two years, at least.” Ed: “go get ‘em….”
The new data for this round is the Census data that there were fewer than 35,000 residents below Canal Street in 2000 while the Community Board 8 Chair estimates the present population as over 50,000. That is impressive growth. But the media had the same articles when the population was closer to much smaller.
Nothing against Karie Parker Davidson, but I would swear I read quotes just like this five years ago. Even ten years ago. Even twenty years ago, when I lived in TriBeCa.
"Our secret is out," a 39-year-old TriBeCa resident, Karie Parker Davidson, said. "There used to be nobody on the sidewalks, and you knew absolutely everyone in the neighborhood. Now, there are tons of strollers, but chances are you still know everyone." ….
"It's starting to feel a little crowded," Ms. Parker Davidson said. "The economics are different; the demographics are different. People here have tried to maintain that downtown, artsy feel, but you can't have an edgy, artistic neighborhood without artists."
Indeed, I distinctly recall feeling in about 1986 that you couldn’t take a stroller into Washington Square Park until someone else with a stroller vacated.
But the locution TriBurbia justifies all! I don’t know if it is original to Sun reporter Gabrielle Birkner or not, but it is new to me. Thanks Gabrielle!
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Jun. 8, 2006 - However (says Virginia), loft inventory numbers are different
Q1 06 loft data stronger than general market data
The loft-specific data in the Miller Samuel 1Q 06 Market Overview paint a very different picture about the vitality of the loft market compared to the Manhattan coop and condominium market generally.
Granted, the numbers are small, so they may not be the source for comfortable predictions but the contrast to the general market data is striking. Compared to the overall markets, the market for loft apartments in the first quarter of the year had:
ü fewer days on the market (125 days for lofts; 138 overall)
ü number of transactions up a bit Year-Over-Year (187 vs. 172 in Q1 2005) and way up Quarter-Over-Quarter (187 vs. 110 in Q4 2005)
ü loft inventory is DOWN 28.1% Quarter-Over-Quarter and up only 4.6% Year-Over-Year (compared to the general market inventory up 15.8% and 59.6%)
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Jun. 7, 2006 - Yes Virginia, inventory is up but buyers are buying (Q1 report)
Inventory is the big news
As mentioned in my original post on this report THE big news in the Miller Samuel 1Q 06 Market Overview is the inventory data, about which Jonathan Miller has been quoted elsewhere as describing as indicative of a market "between" a Seller's Market and a Buyer's Market. The little big number is the 15.8% increase in available Manhattan apartments and townhouses for sale in the first quarter of 2006 compared to the last quarter of 2005. The big big number is a stunning 59.6% increase in inventory from the first quarter of 2005 to this year's first quarter.
Miller has noted that the Q1 2005 inventory was near historic lows, but still.... A big big number, indeed.
Much of the rest of the story from this report has been told in the press (sometimes breathlessly, sometimes confusedly, sometimes in contradictory fashion).
Finding the key data point (hint: look at price per square foot)
One of the things I like about Miller and his reports is that he tries to identify "key" numbers in a blizzard of data. For him for this quarter it was average price per square foot, which he says
"best characterizes market conditions for the current quarter since it is least impacted by the shift in unit mix toward larger apartments this quarter"
(meaning that the "average" or "median" prices for transactions are heavily weighted by whether relatively more studios and 1 Bedroom apartments sold in a quarter compared to 3 and 4 BR units).
For Q1 06, the average price per square foot was $1,004, which is essentially flat Quarter Over Quarter ($1,002 in Q4 05) and up 10.3% Year Over Year. From which one could credibly argue that prices held steady at historic highs -- the headline in many press articles about the report.
Buyers bought, though many sellers didn’t sell
The number that I think is under-appreciated in the data blizzard is the number of transactions. Much press attention was focused on the mix of transactions being majority condo rather than coop for the first time, which is generally explained by the nearly all new construction or conversion of apartments as condos rather than coops and a ton of new condos that continue to come to market.
But the overall number of transactions was 2,005 in Q1 06 (1,073 condos plus 932 coops), up about 30% over Q4 05 and nearly even with the Year Over Year total of 2,028 transactions in Q1 05. From which one could credibly argue that the buyers were still there in early 2006, and that they were buying and not just shopping. I did not see much mention of this datum in the press commentary.
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Jun. 6, 2006 - NY Daily News article about “stories” that help sell apartments
The Daily News ran a fun article (Celebrity owners & intriguing tales always help…) Make A Sale last week in which I was quoted at the start and end. Reporter Lore Croghan did a nice job on an angle that seems obvious to me – as an agent – but she found to be sufficiently ‘not obvious’ to warrant a story. Here is her lead:
“A home is easier to sell if there's a story to tell — whether it's about rock stars or 19th-century architects, or even the seller's happy life.
A catchy tale is an often-used tool for marketing real estate in New York — where the chances that someone famous lived in a building, or designed it, are way better than in some small town in the Midwest.”
She’s got examples in there about celebrity apartments, a townhouse with a ‘spicy past’, and (my angle) a ‘story’ about the family selling that some buyers may relate to. It’s all part of marketing.
Funny thing is, she didn’t use a story she had heard that I thought was one of the best use of a marketing hook I have heard about. She mentioned a 1 BR apartment that was sold to a (30-something?) single woman that had been owned in succession by two single women who sold and moved to larger apartments when they got married. I guess the karma was a good fit for the right buyer!
I spoke to Lore for about an hour when she did her research and I am very happy with the results. (Not everyone has that experience with the press every time, I know.) She quoted me accurately (spelled my name right!) and – I think – intelligently.
Here is my first quote in the piece:
“It [a ‘story’] helps some buyers make an emotional connection to a property," said Sandy Mattingly, an associate broker at Coldwell Banker Hunt Kennedy. "You want them to imagine it as a home — then as their home."
And the second and closing quote for the piece:
“You create a parallel between the seller's experiences and the buyer's hopes and dreams," Mattingly explained. "You show a movie of what their life could be."
That attempt to create the parallel is about as good a brief description about how we market apartments as I can come up with, even now, after much reflection. That parallel was a terrific hook for the single-woman-with-aspirations-of-marriage buyer that did not appear in the article, but I think her editor made a mistake with that choice.
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Jun. 5, 2006 - Good Article, Terrible Headline (NYT on coop apartment letters of recommendation)
A Sunday NY Times article about letters of recommendation in cooperative apartment purchase applications has a lot of good content – but a terrible headline. Mightier than the Board is bass-ackwards, as the text of the article demonstrates that The Board has all the power in reviewing an application, not the letter writers or the purchasers.
And some Boards are far more willing than others to use (abuse?) that power.
Perfunctory letters (“I have known John Smith and Mary Jones since college and they will make great neighbors”) never help a purchase application, but ‘reasonable’ Boards will look positively on any detailed letters from people who know the applicants well that speak to the applicants’ relevant qualities as potential neighbors and shareholders. Other Boards (be they unreasonable or downright snooty) require letters from “people like us”, which can be other captains of Industry, society dames, or people who belong to the right clubs. Indeed, in the most extreme cases, if your grandfather did not go to church with their grandfathers, forget it.
I worked on a purchase application last year for an established and financially secure 60-something couple seeking to buy in a not-quite-snooty building. At the suggestion of the listing agent, they provided biographical material about their parents and their adult children. The word is that the Board was pleased to see that one set of parents of this mature couple had owned a coop nearby (a similarly snooty building it seems). Would they have been approved without that ‘connection’? No need to find out, but that was the report.
Letter writing is a lost art, and coop reference letter writing is a most arcane skill that few people have. That is why I do a lot of coaching for letter-writing (which I tell my buyers to blame on their anal agent) and why I suggest they get one more letter than they need (which I tell my buyers not to tell their letter writing friends and associates).
Tough town. Tough business. Mistakes here are very painful!
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