We are getting closer to the end of the year and, especially in this period, we would all like to own the proverbial crystal ball in order to see what 2012 has in store for us.
The signals from Manhattan residential market are comforting. In spite of the worldwide news of financial despair, this little island seems to be keeping up with its historical habit of not being bothered much by human troubles. Jokes aside, the fact that rental prices have been quickly rising over the last several months while prices in the sales market have been growing at a slower rate clearly indicates that a real estate investment in New York is bringing a higher return on investment now compared to a few years ago.
The truth is that the number of good quality apartments available is far fewer than the number of people interested in buying them (compared to last year). This is a healthy sign. After the 2008 financial crisis, developers have built less real estate and now the offer is shrinking. The competition amongst buyers for specific kinds of apartments in the luxury segment is often intense.
For example, a townhouse in Brooklyn has been sold above asking price in Clinton Hill (Brooklyn) last month. $2.16 million versus $2.05 million.
The key factor for a seller remains pricing the property right. If it is overpriced it will linger on the market for a long time.
With the holiday season, the market slows down and only the experienced buyer, who is aware that sellers receive less offers in the winter time, actively stays in the market with an eye towards negotiating an advantageous deal.

Brooklyn is growing up
The borough has been sporting sleek new high rises for a while now and the trend appears to continue.
The Wall Street Journal describes how the soon-to-be tallest tower in the hood will begin to be constructed in the next weeks. The address is 388 Bridge Street in Downtown Brooklyn. The expected height is 590 feet, which is 76 feet more than the current record holder, the Brooklyner, which stands nearby at 111 Lawrence Street and was completed last year. Previously the tallest structure in Brooklyn was the Williamsburg Savings Bank Tower, which was built more than 80 years ago.
The majority of these new towers are full service beautiful condos. Therefore let’s not forget that, if Manhattan is not offering our dream investment property, we can always zip across the Williamsburg Bridge and look at what Brooklyn has to offer.

from the magazine The Real Deal
This year is the 50th anniversary of the city’s comprehensive “Zoning Resolution”.
The new plans and ideas in store for the City will not bring the same huge impact brought by the original one. Instead, incremental changes are being submitted to the authorities for consideration.
One proposal involves, for example, some older Midtown buildings whose owners complain that under the current regulations they would not be allowed to rebuild them (in case they were tore down or being destroyed by accident) at the same floor to area ratio (FAR); the new constructions would have to be smaller. This seems to have little sense given the need for newer and updated commercial buildings in Midtown.
The Bloomberg Administration has been very active in reshaping New York City zoning, and has modified and affected a stunning 37% of the total City area.
Another idea that has been discussed around the implementation of new plans is “form based zoning”. This kind of zoning, already present in Miami and Denver, does not take in consideration what the building is used for (i.e. no emphasis on “residential” Vs “manufacturing) but instead the actual physical form of it.
“Performance-based zoning” is even more flexible and could allow an industrial plant to be built within a residential complex if certain environmental standards are met.
These are new concepts that should be inspiring in a new economy which is quickly bending the boundaries of definitions. People like to gather in residential spaces like hotel lounges and eventually conduct informal business meetings there.

brokers-managers
With the growing wave of international investors buying a piece of NYC real estate, there is also an increased need for managing single properties, reports the Wall Street Journal.
This means that often brokers become the managing agent for the apartment. They select the tenant, receive the rent payments, pay the bills, set up accounting, solve problems of all sorts and so on…
It is normal for a broker to offer these services to an investor who does not want to manage the property personally. The fee collected by the broker is generally very modest. The value is mainly about building a long term relationship with a client who, if satisfied, will invest more with the assistance from the same broker or rely on him to sell the property at some point in the future.

You would think New York City (metropolitan area) is the most expensive real estate in the Country, right?
Actually, according to the Center for Housing Policy, it is instead San Francisco, which has the highest median price per dwelling: $585,000 versus $450,000 in New York.

This is it for today, my Dear Friends.
I am always available to answer your questions and provide you with more information on New York City real estate.
I wish you a warm and joyful end of 2011 and a happy beginning in 2012.

Best Regards,
Riccardo Ravasini