Contact Us at 917-860-2782 or vshtainer@compass.com

New York City

5 Common Questions About Making a Home Investment

5 Common Questions About Buying a Home

Buying a home is one of the largest decisions and financial transactions in many people’s lives. Because this is the largest financial asset for most many, anxiety and stress can cloud the decision-making process. Questions such as the following often  – Is this the right decision for me? Is this the home I should be investing in? Is now a good time to buy, or should I wait?

Whether a first-time home buyer, or a seasoned real estate investor adding to your portfolio, questions arise during every transaction. In our experience working with buyers, sellers, renters, and investors across all experience ranges, here is a list of the most common questions we get asked when it comes to investing in a home. 

WAS THE HOUSING CRISIS DURING THE FINANCIAL CRISIS JUST A BLACK SWAN EVENT TO BE PUT BEHIND US, OR DID IT SHOW THAT HOMES ARE NOT SAFE AND PROFITABLE HOLDINGS?

The Financial Crisis of 2008 changed the psychology of nearly everyone as it relates to finances and purchasing decisions. This has been more pronounced with Millennials.

Not all those that purchased homes during the crisis of ‘08 were negatively impacted, however, the ripple effect did bring down the overall market. Those that were hit hardest were buyers that stepped up to buy properties they could not afford, largely amplified by mortgage lenders who had much more relaxed lending guidelines and approved individuals for mortgages they could not truly afford. The latter was largely responsible for the subprime mortgage crisis during this time period.

The crisis revealed the dangers of over leveraging. While a mortgage can be a great thing, taking on too much debt can lead to many issues, especially in a home purchase. A large majority of those severely wiped out by the housing crisis mortgaged the purchase of the home with minimal equity down, thus they had no skin in the game so to speak and we were willing to just walk away from their payments as a result. This is why so many homes went into foreclosure.

Any market, financial or otherwise, is subject to a crisis, however, the housing crisis has resulted in more restrictions imposed on lenders and is certainly more prevalent in the back of buyers’ minds as they asses what they can afford.

While interest rates on mortgages are once again at historic lows, it is important to understand the true monthly payment costs and the tradeoffs associated with various mortgage products and increasing your down payment. We sat down with a Mortgage Expert to ask some questions – read more here.

 

NOW THAT HOME VALUES HAVE RECOVERED, WHAT'S THE SMARTEST HOME OWNING STRATEGY GOING FORWARD? IS IT SAFE TO ASSUME A HOME WILL STEADILY APPRECIATE?

Plain and simple – buy what you can afford! Consult with a mortgage advisor to receive a pre-approval letter if you are financing your home purchase. The pre-approval letter will reveal in what price range you should be shopping.

Time horizon is certainly a contributing factor to price appreciation. Because of the additional costs of a real estate transaction, a timeline of at least 5 years is usually a standard outlook to outweigh the costs of buying versus renting. In Manhattan the rent vs. buy analysis is more complex given pricing – we are happy to help guide you on what makes the most sense given your personal scenario depending on income, timeline, and down payment. This, of course, varies from market to market, and even neighborhood to neighborhood. If you envision yourself staying put for quite a while, we tend to see real estate prices appreciate over a long-time horizon.

IS IT SAFE TO ASSUME THE HOME WILL BE A SUBSTANTIAL ASSET FOR FUNDING RETIREMENT THROUGH A DOWNSIZING OR REVERSE MORTGAGE?

Owning a home is credited as one of the largest contributions or “escalators” to wealth. With that being said, substantial price appreciation can be observed on homes owned for multiple decades. Upon retirement, some individuals do not need the large family home they used to raise their families and downsize. Downsizing generally results in additional gains pocketed from the price appreciation of the original home versus the price paid for the new, smaller home. Essentially, downsizing is a way to pull out the equity that has accumulated over time as a result of homeownership. Equity is one of the reasons that homeownership contributes so much to an individual’s wealth!

Again, this is very market dependent as a smaller home in a different market may not equate to a smaller price tag all the time.

As to whether the additional “income” from a home sale can fund retirement, that is something the client should consult their certified financial advisor in regard to as everyone’s financial situation and needs in retirement vary.

AS A YOUNG INVESTOR, WHAT DO I HAVE TO DO TO ENSURE I WILL BE ABLE TO SUCCESSFULLY PURCHASE A HOME?

For many young couples looking to purchase their first home, the largest obstacle in achieving that is coming up with the down payment. There has been a definite shift towards this being a large struggle over the last decade as more and more young couples are burdened with large amounts of student debt given the increased costs of education. They are then forced to rent, which can be costly, and have minimal bandwidth to save for a down payment with all their various financial obligations.

A minimum 5-year timeline is reasonable in most markets in order to cover the costs of the transaction on both the buy side and the sell side if moving down the road versus price appreciation over that timeframe. Of course, the longer one stays in the home, the more the transaction costs are spread out over time which is coupled with additional time opportunity for price appreciation.

It does not necessarily always make sense to reach for the most expensive home. If buying the most expensive home they can afford means tapping out their budget and being on the line with meeting monthly expenses, this is probably not the wisest decision. Instead, buyers should look to purchase something in their price range that they love yet still allows them to live their daily lives while meeting financial obligations.

WHAT KINDS OF MISCONCEPTIONS AND FEARS ARE YOU SEEING IN THE MARKET AMONG ALL YOUR CLIENTS?

Working with buyers in the current NYC market, we would identify a lack of urgency as the biggest commonality across different price points. Buyers have an advantage over sellers in the current market as well as a large selection of inventory including both resale and new construction. This can lead buyers to stretch out a search as they feel what they are looking for will “still” be there. Additionally, macroeconomic events such as the political climate, a possible Trade War with China, and Stock Market volatility contribute to Buyers’ hesitancy to leave rentals and make a purchase.

In New York City specifically, the market is also feeling the impact of local laws related to Rentals as well as increased Mansion Taxes. The latter progressively increases the Mansion Tax depending on the sale price of the property. Buyers in the $2-$5M range are likely feeling the impacts of the increased taxes the most.

In regard to young people taking on debt – as referenced in some responses above, we think the young buyer’s mentality towards debt has definitely changed living through the financial crisis as well as coupled with the increasing amount of student debt. As a result, some can be apprehensive to take on additional debt with a mortgage. However, talking through some of the advantages of mortgages, such as tax benefits, as well as reviewing the myriad of products available with a mortgage broker can alleviate some of these upfront concerns. We are seeing younger people having to rent longer than their predecessors given the inability to save for a down payment rather than aversion to taking on debt in the form of a mortgage.


Manhattan Market Update: Halfway Through 2019

Manhattan Q2 Market Report

Manhattan - First of the year was a mixed bag if you collectively look at Q1 and Q2. Q1 got the year off to a slower start when looking at the market on a year-over-year (YoY) basis, however, Q2 finished with a 31% increase in sales compared to Q1 and a 7% increase YoY. This yearly increase in sales volume was the first time for Manhattan in nearly 18 months.

So what is driving the real estate market, and what do we expect as we think about the rest of 2019?

Taxes:

At both a national and local level, taxes have been a huge influence on the luxury market thus far in 2019 and will likely continue to be so. From a National, perspective, the reduction of State and Local Taxes (SALT), have certainly had an impact in a high-tax marketing like Manhattan. Some benefits of homeownership such as tax deductions have been reduced as a result of the new Federal tax laws.

On a local level, the passage of a new Progressive Mansion Tax can be observed in Q2, but we likely have not seen the full brunt of the impacts this may have on the higher end of the market - $10M+. The increase of YoY sales volume for Q2 2019 can likely be attributed to Buyers that pushed up closings in to late June to avoid the new, increased, progressive taxes that took effect as of July 1, 2019.

Furthermore, after July 1, the Manhattan market went nearly 3 weeks without a property over $10M going in to contract. If this is any indication of the Progressive Mansion Tax’s impact on the luxury market, it is certainly not favorable. This will be a key trend to monitor for the remaining part of 2019, specifically the volume of deals at $10M where the tax liability as escalated as a result of this.

 Pricing:

Looking at the data and negotiating for our clients, it is evident that pricing is still an ongoing issue, namely, the market is saying properties are still a bit overpriced. With that said, price reductions have been instrumental to keep product moving. Sellers are reducing prices for luxury properties anywhere between 9-11% before they enter contract. Pricing will continue to normalize in order to keep transactions moving through the rest of 2019.

With that said, pressure on pricing is being influenced by myriad things including inventory and negotiability. We are certainly in a Buyer’s market, however, there are many Buyer’s that continue to sit on the sidelines. Buyers know they can get a deal and have a wide array of selection, so they can become stubborn in instances, waiting for a deal they think is “better” to come down the line. As a result of increased inventory and a degree of Buyer hesitancy, time on the market has climbed for the luxury market in Manhattan. In Q2, average time on market had climbed to 168 days. This number can escalate quickly as price tier increases. We have seen some ultra-luxe properties on the market in excess of 365 days.

Politics:

Similar to the impact of Taxes, we have seen and expect political impacts to be felt from both the local and national levels. Thinking about the remaining part of the year, the 2020 Election will definitely have an impact on the market in some way as we progress towards the election throughout the cycle. That, of course, remains to be seen, but we expect some impact on the market at a larger level

Additionally, aspects of the current political climate that have resulted in Macroeconomic impacts such as a possible Trade War with China and Stock Market volatility have ancillary effects that trickle in to the luxury market. Largely, both of these events have contributed to some of the lingering hesitancy in the market from Buyers despite amazing deals being prevalent on properties.

At a local level, there has been influence on the market as a result of political decisions that resulted in Amazon pulling out of NYC as the location of its second headquarters as well as the recent passage of updated Rent laws by City Council.

Manhattan Q2 Inventory by Type
Manhattan Luxury Real Estate Q2 Sales by Unit Type

 

5 Most Expensive Homes Currently on the Market in New York City

New York Real Estate is viewed by many as one of the most competitive luxury markets in the world. There is much talk about the luxury market slowing down, but on the ultra-luxe end, there is no shortage of unique, ultra-pricey listings. From townhouses to penthouses, we rounded up a countdown of the five most expensive properties presently gracing the NYC real estate market. 

*All listings and image of respective listing agents/brokers

#5- 25 Columbus Circle, PH80

Photo: Corcoran/Deborah Grubman

Photo: Corcoran/Deborah Grubman

Related CEO Stephen Ross listed his Penthouse high above Columbus Circle in the Time Warner Center for $75 million. This has been Ross’s residence since Time Warner Center was initially completed. The interiors are designed by Tony Ingrao, who interestingly enough, have done the interiors at Related’s 35 Hudson Yards. He has customized virtually all aspects of the home.

Listed By Deborah Grubman Corcoran

#4- 45 East 22nd Street PHAB

Photo: Douglas Elliman/Noble Black, Holly Parker

Photo: Douglas Elliman/Noble Black, Holly Parker

Perched on over 13,000 square feet of living space above Madison Square Parks green space, this gorgeous triplex penthouse located at 45 East 22nd Street could be yours for a mere $77,700,000. Sprawled out over three top floors of this luxury building the penthouse features two separate studio apartments for staff, two parking spaces, access to all the buildings amenities including a golf simulator, gym, and a playroom, and not to mention the 360° views of all of Manhattan. With floor to ceiling windows and incredible entertaining space, this apartment is perfect for dinner parties and having guests over. Despite the interior concepts of Lee Mindel, Ryan Korban, and Thomas Juul-Hansen, the condo is being sold as a blank canvas for the owner to have the ability to truly make it their own.

Listing Courtesy of Douglas Elliman - Noble Black & Holly Parker

#3- 134 Charles Street

Photo: Bespoke Marketing

Photo: Bespoke Marketing

Back on the market a year later with an additional $30 million tacked on, meet 134 Charles Street. An 18,000 square foot single family home converted from a warehouse space. This listing, owned by investor Ciaran O’Kelly first popped up in 2014 on the market for a whopping $47.5 million after having purchased the building for 17 million and 2008 and giving it extensive renovations. Boasting an infinity pool, a 47-foot garden space, and a roof deck this apartment has returned once again for $80 million.


Listed By Zachary Vichinsky of Bespoke Real Estate

#2- “Le Penthouse” 172 Madison Avenue

Photo: Keller Williams NYC

Photo: Keller Williams NYC

Boasting every amenity imaginable Le Penthouse, located at 172 Madison Ave, comes in second with a price tag of $98 million. This 11 bedroom, 14 bathooom Skytop mansion is going for $4,945 per square feet, giving you almost 20,000 square feet of living space (4,500 of which are outdoor). The apartment boasts a private rooftop deck featuring a jacuzzi and a 67-foot salt water pool in addition to a gym, a pet spa, a playroom and much more. 

Listed By Raphael Sitruk and Efraim Tessler of Keller Williams

#1- “The Pinnacle” The Woolworth Building

Alchemy

Alchemy

Coming in as number one of the five most expensive listings currently on NYC’s market is the Woolworth buildings “the Pinnacle Penthouse” for $110 million which sits nearly 700 feet above the City. This penthouse is spread out above five floors featuring an elevator giving the owner easy access to all five levels. The Pinnacle first hit the market in 2017 and if sold anywhere near the asking price, it will break the record of most expensive sale ever downtown with the previous titleholder, a property at Chelsea’s Walker Towers selling for $50.9 million back in 2014. 

Alchemy Properties had to conduct extensive work to the Pinnacle before bringing it to market as the crown previously held maintenance equipment for office tenants below. Work included adding additional windows and replacing nearly 3,500 damage terra cotta on the facade. 

Besides being located in the iconic Woolworth building, this apartment boasts 360° degree views of the city, a 400 sq ft observatory, and 24-foot ceilings. 

How New York City's New Rent Laws Could Impact You

You may have heard chatter over Rent Laws in New York City over the recent weeks, and wondering what is it all about? City Council recently met to conduct their annual meeting in Lower Manhattan to discuss this years rent guidelines. With over 65% of New York’s 8 million people being renters, these regulations will likely impact you or somebody you know. With mixed opinions on the board's decisions, let's dive into precisely what the board decided. 

Rent Regulation

One of the most significant disagreements to be resolved in this years meeting was the issue of rent regulation. Previously if a tenant were to live in a rent regulated apartment and their income was to surpass a certain amount, the apartment would become deregulated.

Now, if you live in a regulated apartment, your apartment will continue to remain regulated despite your financial situation. Additionally, the laws called for more apartments to be part of the rent-regulated system. Additionally, and notably landlords now only have the power to add up to $89 to an apartments rent in between tenants after a renovation, previously landlords had the ability to add up to $1000.


For Renters

For regular renters, this meeting was a harbinger of good as well. It was a common occurrence for troublesome tenants to be put on a “blacklist” by their landlord; this is now considered a misdemeanor. Additionally, more restrictions have been placed on evictions, giving the tenants more time to leave their apartment if evicted and creating a fine between $1,000 and $10,000 for illegal evictions on the part of the landlord. 

Other ways the new laws impact Renters include:

  • Security Deposits must be returned to the Tenant within 14 days of vacating the unit

  • At least 30 days’ must be given to Tenants if the Landlord intends to raise the rent by more than 5%

  • Tenants have 30 days to fix lease violations, up from 10

  • Application fees are limited to $20, even when a background check is included


However, the news was not so good if you are a renter of a rent-stabilized apartment with the board voting 5-4 to raise rents for the 3rd consecutive year. The increase will go into effect on renewal leases started on or after October 1st, 2019, and September 30, 2020. The increase will come at a 1.5% increase for one-year leases and 2.5% for two-year leases. While this is still an increase, it is rather small compared to the 14% increase that New York had seen in the ’80s.


The new regulations affect a wide variety of renters and landlords in positive and negative ways. Feedback from Landlords is that these laws are disincentivizing them to upkeep existing apartments given there may be a cap on how much they can increase rent after a renovation. However, tenant advocates see the laws in a positive light, saying that some of them were desperately called for. 


Interview: Why Long-Time Upper East Side Resident Makes the Move to Upper West Side

When speaking to Real Estate, you know that the first thing anyone mentions about property is “Location, Location, Location!”. In New York City, we are fortunate to have so many diverse neighborhoods, each with their own character and offerings.

We help our Client hone in on the neighborhoods that best align to their lifestyle. We often find that people end up falling in love with a neighborhood and staying for many years.

But what about when people are interested in a neighborhood that they’ve never considered? It happens, and yes, it can actually offer great opportunity!

Why Long-Time Upper East Side Resident Victoria Shtainer Moved to the West Side:

Move to the Upper West Side

 Q: As a long-time resident of the Upper East Side, what made you explore additional neighborhoods that were not in your original consideration set?

Victoria Shtainer: It is a Buyer’s Market currently in NYC and we wanted to take full advantage of that. It is currently cheaper to Buy than to Rent, especially when we need a large apartment to accommodate the entire family. With that said, there is New Development available in NYC that offers Tax Abatement, which is a huge positive for Buyers/Investors and something that should strongly be considered, even if those buildings are not in your target neighborhood.

Q: You mentioned Financial Reasons – Can you elaborate a bit more on some of the opportunities out there for Buyers currently?

Victoria Shtainer: Yes, given it is a Buyer’s Market, and the volume of New Development that is on the market in NYC, the ball is in the Buyer’s court to negotiate. While some may be hesitant to buy, that is when even greater opportunity can be had. Financial opportunities can include

  • Tax Abatement: Buildings such as One West End Avenue and Waterline Square are offering a 20 Tax Abatement which means monthly Real Estate Taxes are incredibly low for 20 years, thus reducing the carrying costs significantly. This is a huge benefit, especially if you are an investor looking to purchase your unit to rent.

  • Incentives: New Developments are offering Buyers incentives to attract them to their projects given the competitive market. This may include Sponsor paid Common Charges for X amount of years, Sponsor Paid Transfer Tax, as well as negotiability on the Asking price.

I practice what I preach! All of this comes together to result in what was an amazing opportunity to move to the Upper West Side from an investment standpoint. Just as I would advise Client looking for a great opportunity, I demonstrated that by doing so myself.

Q: Do you foresee yourself having to adjust your lifestyle from what you might have been used to on the Upper East Side versus your new neighborhood?

Victoria Shtainer: No! In fact, the amenities here from both a building and neighborhood standpoint are amazing. Given the Upper West Side has many New Developments, the building is outfitted with state of the art amenities including a pool, expansive terrace, in-building parking, and more.

From a neighborhood perspective, we have access to everything we would want such as Supermarkets, working studios such as Soulcycle a block away, and popular coffee shops. Additionally, you can easily access the West Side Highway to get to the Lincoln Tunnels and George Washington Bridge.

Q: Given the New Development selection around the City, what made you focus on the Upper West Side compared to another neighborhood?

Victoria Shtainer: I think that there is tremendous upside in this area, especially from an investment standpoint when you factor in the financial benefits I previously mentioned.

Hudson Yards is a few blocks South and has completely transformed the Far West Side, and the arrival of Waterline Square is going to add great value and interest to this neighborhood. The project included 3 amazing buildings by 3 world-class architects and will be bringing a host of neighborhood amenities including 28,000 square foot Cipriani and Empellon, 2.7 acre park, and an ice skating rink in the winter.

 I think that the Far West Side is experiencing what Downtown experienced during the post-Sandy era.

Fourth of July: Things to Do in New York City and The Hamptons

It is almost time to celebrate America’s independence and enjoy the long weekend ahead.  The Fourth of July marks a time to partake in summer festivities including barbecues, beach trips, and of course fireworks. Whether in NYC or the Hamptons we have rounded up some of our favorite ways to celebrate this classic American holiday from firework displays to parties. 

NYC

Whether viewing the fireworks or going to a rooftop party spending the Fourth of July weekend in New York City is never a bad idea. Here are some of our favorite things to do in order to celebrate.


The 5th Annual Freedom Fest at Pier 15

via

This annual event is celebrating its 15th year this year. The event features a top DJ, a dinner buffet fully stocked with Fourth of July classics such as burgers and hot dogs, an open bar, and most importantly an excellent view of the fireworks. The event will run from 6:45-11:00pm on July 4th. Tickets are $205 per person.

View the Fireworks from any of the Free Viewing Spots Around the City

via

This year Macy’s will be hosting its 43rd annual fireworks display with fireworks launching from the Brooklyn Bridge and barges along the lower east river. The fireworks can be viewed from many locations across NYC including Brooklyn bridge park, and dedicated viewing sections on FDR drive, or any place with unrestricted views of the bridge. The firework display will begin at 9:20pm on July 4th.

Circle Line Fourth of July Cruise

Get an incredible view of the fireworks and the NYC skyline this July 4th on circle line cruises. Cruise down the Hudson river with complimentary beer, wine, and a buffet. Tickets are $229.

The Hamptons

Fourth of July events will be taking place all throughout the week out East in the Hamptons. Here are some of our favorite places to celebrate or view the fireworks.


Southampton Fresh Air Home’s American Picnic

via

This Hamptons classic event will be taking place for its 32nd year on Friday July 5th from 7-10pm. Featuring fireworks by Grucci, carnival games, a picnic, dancing, and music this event is perfect for families and and event not to be missed.

Sag Harbor Yacht Club

With one of the best Hamptons fireworks display, pulling in around 20,000 viewers a year the Sag Harbor Yacht Clubs annual John A Ward Independence day fireworks display is back. The event is set to take place at 9:30pm on Saturday July 6th and can be best viewed from the marine park, Sag Harbor Wharf, or Havens beach.

Veuve Clicquot Champagne Pool Party

via

Set to take place at the Topping Rose House on July 4th from 1-5pm this pool party is not to be missed. Featuring a DJ, a grill out, and champagne this event is a great way to kick off fourth of July weekend. Tickets are $50 and include two glasses of champagne.  






Guide: 5 Things to Do for Mother's Day in New York City

Mother’s Day is Sunday May 12th. Whether spending the day with Mom in the city, or sending her a gift, we’ve rounded up 5 ideas for Mother’s Day in New York City as well as a few gift ideas. From Brunch to a Staycation, check out these fun things to do with Mom in New York City:

Brunch

Photo: Teddy Wolff

Photo: Teddy Wolff

We could right an entire post just on Brunch places…it is New York City after all. Check out Simon & the Whale conveniently located in Gramercy in the Freehand Hotel. The restaurant is done by Gabriel Stulman who is also behind city favorites Fairfax, Charlie Bird, and Fedora.

Notable items for a Mother’s Day Brunch include griddles banana bread with date syrup, ricotta artichoke popovers, and sorrento lemon mascarpone danishes

New York Botanical Garden Party

via

Enjoy the beautiful spring blooms at the weekend-long garden party at the New York Botanical Garden. This year is expected to be the biggest Garden Party yet! Stroll through the newly opened Lilac collection and enjoy live music and dancers on the garden’s main stage. There are a bunch of activities planned throughout the whole day, making it a great family event. Activities include putting on the green, croquet, guided walking tours throughout the gardens, face painting, and bouquet making demonstrations to name a few.

The event will take place during the entire weekend, from 10am-6pm on Saturday and Sunday.

All garden pass $28, $12 children // 2900 Southern Boulevard

 Mother’s Day at the MoMa

via

Check out that exhibit you’ve been wanting to see at the MoMa with a special day planned for Mom. Before the Museum opens to the public, enjoy breakfast in the Terrace 5 Café which overlooks the Abby Aldrich Rockefeller Sculpture Garden.

After breakfast, you can participate in exclusive group tours of the MoMa collection, including special exhibitions.

Tickets: $120 Adults // $25 Children

Staycation at the Four Season New York Downtown

via

Treat Mom to a special weekend Staycation at the new Four Seasons New York Downtown. They are offering a special promotion package for Mother’s Day called the Overnight Pamper Package. The package includes:

  • Overnight accommodation

  • In Room Dining Breakfast for Two

  • 80 minute Soveral Facial

  • Complimentary glass of Champagne or Wellness Elixir in The Spa

Rates starting at $795

Tea at Bergdorf Goodman

via

BG at Bergdorf Goodman hosts afternoon tea daily from 3-5pm. If a full brunch isn’t your thing, this is a great way to pass the afternoon at a place that all women love, the famed Bergdorf Goodman department store.

Tea service comes with an assortment of tea sandwiches, freshly baked scones, fruit preserves, Devonshire cream, and a variety of petite sweets. We recommend getting the option paired with a glass of Veuve Clicquot Champagne. After tea, take mom downstairs to pick out a luxurious gift.

$45 per person or $62 with glass of Veuve // 58th Street at 5th Avenue

Gift Ideas:

Flowers: Flowers always make the perfect gift for Mother’s Day. What Mom doesn’t love a beautiful arrangement? One of our favorites in New York City is Ovando

Ovando takes a unique approach to floral arrangement, creating stunning displays both classic and modern. Quality and craftsmanship defines the brands beautiful arrangement. The store, dubbed the Botanical Gallery, is a experience not worth being passed up, and can also be rented for private events.

They have a special collection for Mother’s Day which you can shop directly here.

Fragrance: Replenish Mom’s favorite perfume, or buy her a new one. Byredo has some of the best scents available. For Mother’s Day, why not pick a scent thats grounded in floral notes?

Byredo Rose of No Man’s Land is an elegant floral fragrance that was created to pay homage to the nurses and heroines who served on the front lines of World War I. The fragrance has notes of pink pepper, Turkish rose petals, and raspberry blossom among others.

Available at Barneys

Dress - Looking to splurge on Mom? Treat her to an iconic Dolce & Gabbana dress that will be perfect for Spring and Summer whether in the City, The Hamptons, are the Almafi Coast. Dolce & Gabbana has beautiful prints inspired by the Italian scenery and Coast. They are known for the recognizable floral prints.

Dolce & Gabbana Cold Shoulder Anemoni Print Poplin Dress - Available at Bergdorf Goodman

Are Glass & Steel Skyscrapers Being Banned in New York City?

de Blasio Comments on Glass Skyscrapers

Headlines have been swirling around various media outlets stating that, per Mayor Bill de Blasio, glass and steel skyscrapers will be banned in New York City moving forward. The Mayor made comments on Monday morning’s edition of Morning Joe on MSNBC where he was quoted saying, “We are going to ban the classic glass and steel skyscrapers, which are incredibly inefficient.”

This message took on various other similar forms and was picked up by multiple media outlets including a cover on the New York Post here in the city. De Blasio spoke on various media outlets using a similar tone of strong language that implied a ban. He stated that these traditional skyscrapers are contributing to global warming. This prompted many to begin to think about a New York where there would be no new glass and steel skyscrapers.

Are Glass and Steel Skyscrapers Being Banned?

The short answer: No!

The comments from de Blasio were made with very few details or facts supporting them. The Director of the Mayor’s Office of Sustainability also chimed in to clarify that there is no prohibition on buildings made of glass in New York City.

It is important to note, however, that we are likely moving in a direction that would require construction to meet certain environmental efficiency standards. City Council just passed a package of bills which was inclusive of a mandate for building retrofits to reduce carbon footprint by 40 percent by the year 2030.

We are already seeing new construction as well as construction from recent years adapting to a more sustainable model by having projects certified as various LEED levels.

LEED stands for Leadership in Energy and Environmental Design and was devised by the United States Green Building Council. This rating system is the most widely used green building rating system in the world, and the LEED certification is a globally recognized sustainability achievement.

The rating system evaluates the environmental performance of a building, and through this process, encourages market transformation. The evaluation looks at things such as materials, water efficiency, and performance such as indoor quality for occupant comfort. 

Fun Fact: 10 Hudson Yards was the first commercial office space in New York to receive the coveted Platinum LEED certification.

NYC Real Estate Tax Changes: What You Need to Know

We recently provided updates on the proposed Pied-a-terre tax that had the possibility of being passed in New York City. With the recent passing of the State budget, there has been changes to Real Estate Taxes in New York. Below is everything you need to know about the real estate tax changes as a result of the New York State budget.

Overview: The Pied-a-terre tax was not implemented. Instead, there is a newly revised and implemented Progressive Mansion Tax and Progressive Transfer Tax. This will impact those in the $2-$5M purchase range the most.

The Progressive Mansion Tax:

The new law applies to all closings that take place on or after July 1, 2019 except for those contracts that were entered into prior to April 1, 2019. This is specific to NYC contracts.

The new tax now has 8 tiers that have a higher Mansion Tax rate as purchase price escalates.

NYC Progressive Mansion Tax.jpg

The Progressive Transfer Tax:

In addition to the Mansion Tax overhaul, effective April 1, 2019, the Transfer Tax also received an overhaul.

For Residential purchases over $3 million, the NYS Transfer Tax increases from its current rate of 0.4% to a rate of 0.65%.

Additionally, for Commercial transactions greater than $2 million, the NYS Transfer Tax will increase from its current rate of 0.4% to 0.65%.

What Does it Mean for Me?

While no tax increases on property would be ideal, the above could be make less of a blow than the Pied-a-terre tax. The pied-a-terre tax would have positioned New York City as being not investor friendly and was also an annual charge -i.e. the property owner would have incurred this tax every year for owning the pied-a-terre.

As a Buyer, it is important to understand that, while yes, costs of gone up on certain transactions, these taxes are a one-time, upfront cost. The owner does not incur the Mansion Tax and Transfer tax on an annual basis as would have been the case with the pied-a-terre tax.

As was the case with the proposed pied-a-terre tax, the State has earmarked the additional revenue (expected to be $365 million) from the Progressive Mansion and Transfer Taxes to go to the failing MTA system in New York City.

 

As always, for questions about how taxes impact you, consult your qualified tax advisor who understands your personal financial sitaution

Pied-a-Terre Tax Looms Over New York City Luxury Real Estate Market

Thought taxes in New York City couldn’t get any higher? Think again. The Pied-a-terre tax is back on the docket, and it has recently gotten some major support that pushed it further along than what it was last a topic of discussion in 2014.

Ken Griffin made headlines when he purchased a penthouse at 220 Central Park South for $238 million, making it the most expensive home in the country. He plans to use the home when he visits his New York office. This headline also caught the attention of City Council who started discussion on the Pied-a-terre tax once again.

So, what is a Pied-a-terre and the proposed tax?

A pied-a-terre is a part-time second home occupied for less than half of the year. Often times, it is an investment for the owner and may not be occupied. Given that the owner’s primary address is elsewhere, owners of a pied-a-terre in New York are not subject to state or local income tax.

The current proposal has a sliding tax surcharge and fee for homes priced $5 million and over, with higher priced homes incurring higher fees. City and State officials cited that they feel this additional tax is necessary to fund the failing mass transit system in New York City.

 Cause for Concern

Regardless of whether you think it is fair to tax the rich disproportionately or not, a proposed tax plan should be assessed in regard to economic impact before being implemented. From a real estate perspective, there is cause for concern based on the proposal of a pied-a-terre tax in New York City.

International Buyers: International Buyers have already been on the decline in recent years, and the implementation of a pied-a-terre tax would likely prevent some would-be foreign buyers from investing in New York.

 Luxury Condos and Co-Ops: We would likely expect to see some sort of downtick in the luxury segment of the market. Just because a buyer can afford a $5 million apartment, does not mean they spend frivolously and love taxes. Why would they invest in New York when they could invest in another viable city that does not impose a pied-a-terre tax?

The luxury segment of the market has already been under pressure in recent years, so another tax could additional pressure that is not needed in this sector.

 New Development: An adverse impact on the Luxury Market would likely spill over to the New Development pipeline for luxury properties. If there is a decreased demand overall for properties $5 million and up, why would Developers be incentivized to build properties that may not sell? This, of course, would then have an impact on all the employment created within the construction sector when development is booming.

High Costs to Transact: New York City is one of the most expensive places to transact on property without the additional pied-a-terre tax. Costs associated with a real estate transaction in New York City include Transfer Tax, State Transfer Tax, Mortgage Recording Tax, Mansion Tax, and Real Property Taxes. Not to mention, under the new Federal Tax Code, the deduction of SALT has been eliminated.

 Overall, if the tax were to have an adverse impact on the real estate market for properties $5 million and up, we would likely see a reduction in value at the high end of the market. This may especially may be the case for properties that are already valued/priced near the $5 million threshold as Buyers will submit bids under $5 million to avoid the tax.

Image via Getty Images