The median price of an apartment in Manhattan is about a million dollars. That will get you a one bedroom.

The New York Times reports that in the third quarter of 2015, the median price for a Manhattan apartment was $999,000 (Manhattan Prices Near Million Dollar Mark).

The median price is a more accurate picture of the market than the average price, which is skewed by those stratospheric sales north of $50,000,000 you keep reading about. 

And what do you get for $999,000 in Manhattan? Most likely a single bedroom. 

A quick search for apartments currently for sale in Manhattan priced between $950,000 and $1,050,000 yielded nine studios (yes, there are million-dollar studios), 84 one-bedrooms, 36 two-bedrooms, and seven apartments with three or more bedrooms.

Yes, I know, not so long ago a million dollars could buy you the moon. And if you're in Columbus or Muncie, it probably still can. But New York is--well, let's just say it's different here.

According to Jonathan Miller of Miller Samuel Inc. Real Estate Appraisers and Consultants (millersamuel.com), there are not enough million dollar apartments to go around. 

If you've got one to sell, it will go in a flash.

  

Here's Jonathan's absorption report for the month of November, which shows the number of months it will take to sell the currently available properties at each price point.

You may have seen this chart here before, but in case you haven’t, the green columns are co-ops, the blue ones are condos. The total number of months of inventory in each price bracket is at the top of each column. Less than six months is a sellers' market, six to nine months is a balanced market, more than nine months is a buyers' market.

As you can see, with no more than five and a half months of inventory priced under $2,000,000, the lower end of the market is still squarely in the hands of the sellers.

On the other hand, with up to 31 months of inventory, the upper end is still equally squarely in the hands of the buyers. If you've got $10,000,000 or more to spend on an apartment, sellers will greet you with open arms.

Another reliable authority on the subject is Noah Rosenblatt, who publishes Urban Digs (urbandigs.com). 

Noah reports that 49% of sales in Manhattan trade at or above the asking price. 

This is what happens when there's so little inventory at the most popular--that would be the lowest--level. It also indicates that properties that are priced properly are the ones that are selling. 

Buyers are not making offers on properties that are priced too high. And they all read what's on the web about real estate, so they know when a seller is delusional about price.

(For more on this subject, see Pricing 101: Why you have to get it right the first time, and Pricing 102: How to get it right the first time.)

Among other helpful services, Noah also tracks the number of contracts signed every month (Urbandigs Monthly Contract Activity), which is a more current indicator of market activity than the number of closed sales, as there is a lag time of two or three months between contract signing and closing. 

He groups them by the month for the last eight years so you can compare this past November to Novembers in 2014, 2013, 2012, and the five previous Novembers, to eliminate seasonal changes in the market.  

November of 2015 had 861 contracts signed, 9.1% fewer than November of 2014, which was the busiest November in the eight years Noah has been keeping track.  May of 2013 had the most signed contracts ever, with 1,427.

To find out what your apartment is worth in this environment, call me at 917-991-9549, or e-mail cstimpson@stribling.com, and I'll happily come to look at it and put together a broker's opinion of value. No charge or obligation. It's my idea of fun.

If you're thinking of buying an apartment, I'll be glad to help.

Under $3,000,000, it's still a sellers' market in Manhattan. Above $5,000,000? That's another story.

Bottom line, the market for both condos and co-ops priced under $3,000,000 still belongs to the seller.  Although inventory is beginning to ease upward, there is still a real dearth of property in this category.

For those priced from $3,000,000 to $5,000,000, the market is balanced.  (This is good for everybody. Sellers get a fair price, and buyers don’t get discouraged and drop out of the market.)

I’ve been saying it for more than a year, and it’s still true: now is a great time to sell a mid-range co-op.

Above $5,000,000, the market overwhelmingly favors the buyer. In fact, it’s interesting to speculate on what will happen to the 34 months of condo inventory priced above $10,000,000.  Will the prices come down?  Will the condos turn into rentals? Will they just sit there, gathering dust and waiting for buyers? 

The scary thing is, there are more and more of these super-high ticket properties coming on the market. 

But (whew!) that’s not our problem.

Another interesting thing is that, at every level, there are more condos available than co-ops.  This, despite the fact that at least two thirds of the ownable housing stock in New York is co-ops.

Prepared by Miller Samuel Real Estate
Appraisers and Consultants

The chart above, prepared by Miller Samuel Real Estate Appraisers and Consultants, measures absorption rates, that is, how long it will take to sell the co-ops and condos currently on the market.

The columns represent the different price ranges.  The numbers at the top are the estimated number of months it will take to sell the properties currently available in that range.  Less than six months means a sellers’ market. Six to nine months is a balanced market; more than nine months is a buyers’ market.  Blue columns are condos, green columns are co-ops. 

For more information, including information about absorption in your specific part of town, here’s the link to the Miller Samuel website:  Miller Samuel Absorption Report.

For specific information about the market for your property and a detailed broker’s opinion of its value, with comparable sales and other information, e-mail me at cstimpson@stribling.com, or call me at 917-991-9549.

I’m happy to do this free of charge or obligation.  And even if you never, ever, ever plan to sell your property, it’s always nice to know what it’s worth.

What makes an apartment worth $20,000,000? Or more?

At the moment, there are more than 100 apartments for sale in New York with price tags at or above $20,000,000. 

Many are in the new midtown buildings that spring up almost daily as builders play their endless game of mine's taller than yours.

Each of these gigantic, thousand-foot-and-more obelisks is surrounded by a cloud of buzz as fluffy as the clouds it pierces.

157 East 57th Street,
architectural rendering
(Daily News, MARCHMADE)

The buzz, which helps jack up the price, typically involves an expensive marketing campaign and a lot of press about its starchitect (it's always a starchitect) along with the Russian oligarchs, the hedge fund managers and the movie stars who are paying stratospheric sums to live in it.  

But if you buy one, besides an address that makes people hate you at the same time they’re angling for invitations to it, what do you actually get for your $20,000,000+?

One57, that is, 157 West 57th Street, is the 90-story (Wikipedia says it's actually only 75, but it's being marketed as 90) condominium that began the transformation of a not particularly exciting stretch of office buildings into what’s now known as Billionaire’s Row.   

Central Park and Canada, as seen from 
the upper reaches of One57

It offers a truly spectacular view of all of Central Park at once, through walls that are made entirely of glass.  

To the south, you see the city skyline—all of that, too, along with both rivers.

You get hotel services from the Park Hyatt.  

You get proximity to lots of places to spend the rest of your money, like Bergdorf's and Barney's and David Webb and other shops so expensive and exclusive nobody even knows their names.

Fifth Avenue near 52nd Street

You do not get outdoor space.  You do not get a private entrance; you will share a hall unless you’re in one of the full-floor apartments. 

You do get walk-in closets, marble bathtubs and separate showers in the bathrooms, lighting with dimmer switches, brand name fixtures and hardware, a washer and dryer and an intercom system to reach the concierge.  

You will share, along with  the Russian oligarchs and the hedge fund guys and the movie stars and whoever it was who paid a mere $6,000,000 for the little one-bedroom down on the 39th floor (definitely Not Our Kind, Dear, the poor thing), a fitness center, yoga studio, indoor pool, private dining, catering kitchen, library with billiards table, screening and performance room "and more," the ad says.  You can have a pet, and onsite parking is available.

Onsite parking would be pretty cool.

One of several choices for the first of three courses on the $76 
prix fixe menu at Le Bernardin, an easy walk from Billionaire's Row.

But on the other hand, if you live in a $20,000,000+ apartment, getting the car is probably your driver’s problem, not yours.

For this kind of money downtown, in an older loft building for example, what you get is different.

These buildings generally have too few units to support a doorman, but then those who buy these properties prefer not to have a doorman anyway.  Doormen talk.

Besides, you will in all likelihood get a whole lot more square footage. In a property of that size, there is room for your own staff person who will, among other things, open the door for you. 

Warburg photo

You have a much better chance of getting outdoor space.  A whole lot of outdoor space.  Sometimes enough for a lap pool, certainly enough for a hot tub, and you won’t have to share either of them with some Russian oligarch or hedge fund manager or movie star you don’t even know. 

You can have your own private screening room.  You can have a private steam room big enough for yourself and five friends.

You will not get hotel service or onsite parking, but there are some very nice hotels and parking garages nearby. 

You will not get a spectacular view of Central Park or the city, but you will have a lovely view of the flowers and trees in your own roof garden.

The screening room in a 
downtown penthouse

For a very good reason, you may well have a painfully unpretentious, small, rather dusty vestibule instead of anything that could be called a lobby. 

This is because people who live in these buildings like to keep it a secret that there are trillions of dollars worth of art, jewels and other treasures upstairs.  A lobby that looks like the building is still a warehouse full of old machine parts is one way to get this effect.

(It's just possible there is some reverse snobbery involved here as well.)

As I said, it’s different. 

So mull it over.  Think about your priorities. 

And let me know as soon as you decide where to spend your $20,000,000.  (Or more.)

Any questions?  E-mail or call me (cstimpson@stribling.com, 917-991-9549) and I’ll either have answers or know where to get them.

8 in 10 Manhattan home sales all cash? Nope. Not even close.

Recently the Washington Post ran an article that offered some very discouraging information for buyers of Manhattan real estate. (8 in 10 Manhattan home sales are all-cash)

Fortunately, it's far from the truth.

Only 36% of Manhattan co-op sales (co-ops represent 60% of all sales) are all cash, as per Jonathan Miller, president and CEO of Miller Samuel Real Estate Appraisers and Consultants.

A full 64% of Manhattan co-op sales are financed.

The overall figure for all-cash sales in Manhattan is 45%, Miller says.   

Here’s Miller’s explanation:  Manhattan Home Sales Are NOT 80% All-Cash (They Are 45%)

This is still a high proportion compared to the way things used to be.  Sometime back before the flood, when I was in real estate school getting my salesperson’s license, our teacher told us that 99% of our deals would involve financing.

No more.

When the market’s tight and there is competition among buyers, the buyer who can pay all cash is the one who gets the property.  And mega-wealthy foreign investors are often looking for a place in the US to park their cash, as it may be safer here than elsewhere. 

This does not, however, mean that financing does not occur frequently.  

Let me repeat: a full 64% of co-op sales are financed. 

So you’re by no means automatically shut out of the game if you must finance. 

Just be sure you talk to a reliable bank or mortgage broker before you start looking for your new home so you have a good idea of what kind of financing you can get.  

And of course, remember that the qualifications of the building you want to buy in also have to be strong.  Not every bank will lend in every building.  There are a number of factors that can make a building unattractive to a bank.

Also, while the strongest offers are indeed all cash and the next strongest involve financing (the less the better) but are not contingent on it, do not ever make an offer that’s not contingent on financing unless you are absolutely sure either that you’re going to get it or that you can close without it.  

A good lawyer can write a rider to a contract that protects you in case the building doesn't measure up or the bank changes its mind at the last minute.  (That's why they get the big bucks.)

Yes, it does occasionally happen that buyers must default because of lack of funding, and no, sellers do not return their 10% deposits when this happens.

But can you still finance a new home?  Yes, of course. Just be careful.

As for the Washington Post?  They should have called Miller before they ran the article.

Any questions?  E-mail or call me, cstimpson@stribling.com, 917-991-9549, and I’ll either know the answers or will get them for you.

Combining apartments: Need another bedroom or two? How about the ones next door?

As you may have heard (over and over again), there are very, very few apartments for sale in Manhattan.  

Need a bigger apartment?  Too bad.  There aren't any.  So more and more, people are buying the apartment next door and combining it with the one they already have. 

Some may even buy the apartment beyond the one next door as well, or the one on the other side of theirs, or upstairs, or downstairs.  I’ve seen combinations of as many as four units.

This can be a satisfactory arrangement for all concerned.

The people next door may be motivated to sell by the prospect of getting a higher-than-market price for theirs, as they hold all the negotiating chips.  

The buyers pay a premium, but they get the additional space with considerably less hassle than they’d have if they sold their current apartment and bought another larger one, assuming they could even find another larger one.

Plus, there's synergy in a combination.  

Jonathan Miller's Combinations: Creating a Larger Manhattan Co-op or Condo says that the more square feet involved, the higher the price per square foot, or in Miller’s words, “1 + 1 = 2.5.”   So the combination is worth more than its components would be worth separately.

Miller is president of Miller Samuel Inc. Real Estate Appraisers and Consultants, and the universally acknowledged best source of information on  Manhattan real estate.

The value of the smaller apartment in a combination is increased even more if it’s in the back of the building, gets less light, or has other disadvantages.  

Now it’s part of a nice big apartment in the front of the building with plenty of light.  If it’s turned into, say, a master suite, the lack of light may become an advantage. 

Some combinations work more gracefully than others.  Here’s what to watch out for:

If you’re thinking about converting one of the kitchens to a bathroom, check with a plumber well in advance to make sure the waste line in the kitchen will accommodate a toilet. 

If a bathroom is to become a laundry room, remember you’ll have to either vent the dryer or get a dryer that does not require venting.

If you want to move or add plumbing, especially if you’re thinking about converting a closet to a powder room or laundry room, be aware that most buildings do not allow wet rooms over dry rooms.  

The room directly below the closet you’re thinking of converting is also a closet.  Leaks happen.  Nobody likes leaks, especially leaks into closets.  Closets are where people keep things they particularly don’t want to get wet. 

Be aware that your maintenance may be disproportionately high.  As of course you know, maintenance in a co-op (I’m dealing mostly with co-ops as they comprise the lion’s share of ownable residential real estate in New York) is based on the number of shares attached to the apartment in a co-op.  

From the many offering plans I’ve looked at, it appears that an apartment gets a certain base number of shares just for existing as a discrete unit.  Then more shares are added for higher floors, balconies, fireplaces, etc.   

After you combine, you have the base number of shares for two or more apartments instead of just one.  

Thus your new three bedroom apartment may have significantly more shares—and thus significantly higher maintenance—than a three bedroom in the same building that’s not a combination.  

Of course you will play with the floor plans, which should be in your co-op or condo’s offering plan. 

If you’re combining two or, especially, more than two one-bedroom apartments, you may have to do significant reconfiguring in order to have a living room that’s big enough to be in proportion to the size of the new space. 

Make sure the new living room will be facing the street, not a brick wall or an airshaft (a courtyard in real estate language).  

Check for lot line windows in the new apartment (these are windows that legally don’t exist, as they will be lost if another building goes up next door).  

Note that thick black lines in floor plans indicate walls that can’t be removed—either they’re holding up the building or they house plumbing risers or something else too important or difficult to change.

The fewer obvious seams between the apartments, the better.  The combinations that work best, and are most valuable for resale, are those where you can’t tell where the division was originally.  

Be aware that an architect may have better ideas for arranging the space than you will, but be absolutely sure you hire an architect who has combined apartments in the past and is familiar with co-ops.

There are also legal issues to be addressed, such as what to do about the stock certificates, and what impact the combination will have on the building's certificate of occupancy.  

Miller suggests keeping the stock certificates separate, to give the owners and the co-op more flexibility.  

But if you keep them separate,  you may have to re-separate the two apartments, restore a kitchen, put up a wall or two, or whatever, when you ultimately sell.  

Talk about what to do with the stock certificates with your lawyer and of course your co-op board and or managing agent.  

If possible, talk to someone in your building who has already done a combination.

By the way, even if you’ve owned your apartment for many years, you will need co-op board approval to buy a second one in the building.  You will most likely have to go through the same process you did the first time.  For a condo, you will still probably have to get a waiver of the right of first refusal.

Any questions?  E-mail cstimpson@stribling.com or call 917-991-9549.  I'll either answer them or know where to get the answers.

Yes, rent is very high in New York. But it's a lot higher in Los Angeles,* and that's not counting the car.

More years ago than I care to admit, when I was a very young advertising copywriter in Los Angeles, I needed to borrow money to buy a used Volkswagen.
 
I had been taking the bus to work from the north end of Van Nuys, where rent was cheap, to Wilshire Boulevard, where the ad agency was cheap.                                                                                                             

It was sometimes said that this was a great agency if your parents could afford to send you there.  At the time it was considered the best in the world.  I wasn't about to seek a better salary elsewhere.

But after a year of spending three hours a day commuting, including half an hour walking to and from the bus stop on Victory Boulevard and twenty minutes waiting for a connecting bus at Hollywood and Highland, I was finally earning enough to buy a small, inexpensive car.  

The bank reluctantly gave me the loan.  They were reluctant because my rent was too high--23.5% of my salary.  

The rule then was that your rent should be no more than 20% of your salary.  They wanted me to live someplace even cheaper.

Today in Los Angeles, median rent is now a horror-inducing 47% of median income, or exactly double what the bank thought was too high for me years ago, according to a recent article in The New York Times (In Many Cities, Rent is Rising Out of Reach of Middle Class). 

And in Los Angeles, you also have to pay for a used Hyundai, a new Maserati, or something in between.  Then, after you pay for the car, you have to pay to park it, to insure it, to put gas in it, to change its oil, rotate its tires, and on and on.  Cars are expensive.

The magic proportion for a landlord is now 30% or less (re less: fat chance for most).  That’s what a landlord wants to see when you fill out an application to rent an apartment.

The Times, citing an analysis done for the paper by a real estate website, says there are 90--90!--U.S. cities where the median rent, not including utilities, is more than 30% of median income.  Los Angeles is at the top of the list.

Presumably, people moved in when their rent was no more than 30% of their incomes, thus satisfying the landlord, but then their rent went up and their incomes didn’t.

New York ranks tenth on the list, with median rent at 39.5% of median income.  

But our position is artificially high to my way of thinking, as New York is the ONLY city on the list where you don’t have to have the added expense of a car.  (Try living in LA without one, as I did for a year. Or in San Diego, or Flagstaff, or Hattiesburg, Mississippi.)

California is over-represented in the top twenty, with nine cities.  New York state has only two, us and Ithaca.

So yes, if you’re renting in New York, you definitely have a right to complain.  But you’d have a right to complain a lot louder if you lived in LA, or any of the other eight cities where rent takes more of your income than it does here.  Not to mention the car.

E-mail or call me any time if you have any questions about real estate, or just want to discuss. cstimpson@stribling.com, 917-991-9549 

*Several people have pointed out to me that this headline is not strictly accurate.  They're right. In absolute dollars, rent is probably higher in New York.  It's as a percentage of income that the rent is higher in LA.

The less-than-fabulous truth about some of those fabulous condos in the sky.

The longer I stay in the real estate business, the more jaded I get.

Most people walking into a $50,000,000 apartment on a floor high enough to have a view of Montauk would say oh my god, this view is fantastic! 

I can walk into the same apartment and say oh my god, these floors are awful.

This is exactly what I did yesterday.  The floors really were awful.  They looked cheap.  They were warping and separating. 

Of course, it is true that whoever buys an apartment like this is probably going to think of it as raw space, ready for demolition and a complete redo, regardless of the floors.

But still.

Somebody planning to spend $50,000,000 on an apartment is going to notice a thing like that.

The beauty of a view of Montauk--or any other view--is significantly diminished if you’re standing on a really awful floor, especially when you’re expected to pay more than $13,000 for a single square foot of it.

Another apartment I saw recently for a mere $17,000,000 was--no kidding, seriously--the ugliest place I have ever been.  

The original space was probably lovely when the building was built, but what the current owner has done to it is obscene.  I can’t even describe it.  

Every square inch of wall in every room was covered with something hideous and jarring.

In yet a third property with a price well into eight figures, the view from the living room was very nice, but the direct, head-on view from the tub in the master bath as well as the bed in the master bedroom was of the huge black condo building across the street.

And vice versa.  

There’s nothing the owner can do about that except maybe put up some curtains (the walls of those rooms are basically all glass), but it will be interesting to see if the final selling price is anywhere near the asking price.

Another apartment, same price range, had floors of polished concrete. Polished concrete floors were popular about fifteen years ago; these had been laid circa 2012.  

Can you imagine what it cost to put those in? Can you imagine what it will cost to replace them with something friendlier?

I once showed a famous and very witty writer an apartment with polished concrete floors.  She said she wouldn't live on concrete floors unless she was sentenced to them.

The moral of my story is, don’t wish for some fabulous trillion-dollar apartment.  What you’re living in right now may very well be nicer in many respects. 

But if you ever plan to sell it, here’s some advice:

Have as much fun as you want with the furniture (you can always store it and rent something less fun but more universally appealing to stage the property when it’s time to sell), but keep the walls, floor, kitchen and bathrooms as neutral as possible.  

If there’s some major flaw, such as a window with a brick wall view, consider covering that window and hanging a picture in its place.   

And if there’s one thing you shouldn’t stint on, it’s the floor.  Get the best quality you can.   

Any questions?  E-mail or call cstimpson@stribling.com or call 917-991-9549 and we'll talk.