Families are among the most important engines that kept the market moving in the past quarters of slow paced real estate activity.
In fact, during the dark 2009, there were 1,200 sales of three and four bedrooms apartments in Manhattan, a purchase typical of families. Similar real estate product transactions were 670 in 2008 and 830 in 2007 (Miller Samuel data)! Isn’t this worth noting?
Now that prices are more affordable, many households have decided to move back to town from suburbs in Upstate or Long Island. They realize that the real estate investment will still allow them to provide their kids with a good education, for example. This combination of costs was too expensive for many up until few years ago.
Another almost “paranormal” trend is rent stabilized tenants buying and moving to new apartments. This small pool of lucky people were once considered lost to the real estate market given the discounted rates they were allowed to pay for rent.
Today the sale market is becoming that attractive given the combination of low interest rates and reasonable pricing.

A neighborhood that is changing due to the influx of families is Long Island City, just across the East River from Manhattan, in Queens. The so called LIC went through a first transformation in the past ten years from former industrial and storage area to a residential one following the construction of condos after a new law permitted the development of this kind of buildings. LIC has then become one of the centers of attraction for young professionals looking for new affordable neighborhoods in the past 3 or 4 years and finally the blossoming of families or the arrival of new households. Movement to LIC has  also been helped by the presence of parks and outdoor recreational areas for the youngsters.
LIC is fast becoming another good investment opportunity given the development of a lot of condo supply in recent years when the demand has been lacking. The result is a good discount – from the first quarter 2008 to the second quarter 2010 prices went down 14%.
Are you still sitting down?

If on one hand the summer brings with it a reduced sales volume historically (simply: there are less people in the city, schools are closed, and generally it’s not that pleasant walking in the sun with shoe-melting temperatures), on the other I have to report positive statistics from Prudential Douglas Elliman about the second quarter 2010 sales volume that was up 79.9% from 2009.
After Labor Day we will have an idea on the sales activity which is expected to go back to the spring levels.

Ground Zero +
Larry Silverstein, the developer who is leading the reconstruction of the World Trade Center, is encouraging a number of TV networks and production companies to seize the opportunity to document this important public work.
Steven Spielberg is co-producing “Build It Bigger” by Discovery Channel, a TV program in 6 episodes that will be filmed over the next two years.
Ron Howard has been shooting since 2002 “Project Rebirth”: a documentary that follows the life of ten people directly touched by the 9/11 tragedy and its aftermath and of course the rebuilding of One World Trade Center.
Another TV program being produced on the subject is called NOVA.
Silverstein himself is often on camera through these various production projects. An entire floor of his Seven World Trade Center is dedicated to installations by artists like Todd Stone, Marcus Robinson and more.

Developers are getting smarter (or so they think).
While building a residential tower, developers often tweak floor plans of units yet to be completed after they get an initial feedback from potential buyers during the first marketing efforts.
Gerard Longo, Madison Estate and Properties president says that developers must do everything to keep this flexibility in building-almost-on-demand to match the buyer’s needs in a still competitive environment.

Reporter Adam Pincus, in the magazine The Real Deal, reminds us that this month of August in 1980 the City of New York announced a plan to sell more of its public schools following a decline in student enrollment and consolidation of classes.
Between 1975 and 1982 a big chunk of these schools were purchased by private companies and converted into apartment buildings.
Many of such conversions are still taking place nowadays. For example: P.S. 90 in Harlem, was a school abandoned in the 70s and  was then sold in 2008 to private investors. It is now a beautiful condominium with large windows and impressive ceiling height with some apartments featuring massive terraces overlooking Central Park and Midtown Manhattan.

That is all for today.
I am always available to answer your questions about your next investment in New York City Real Estate.

Warm Regards,
Riccardo Ravasini