New York Renters Faced with Steep Lease Renewals

Data shows rents in New York have reached or surpassed pre-pandemic pricing

Rents across New York City have been on a tear, rising passed pandemic lows in some neighborhoods of the city. Rents plunged at the start of the pandemic as uncertainty swept the city and many renters fled to other homes outside the city or relocated. Now, however, rents are surging.

Many renters that entered into leases during lows of 2021 are approaching the end of their leases and are being caught by surprise with the steep renewal rates that are being proposed by landlords.

During the pandemic, Renters that new that would be staying put in the city began apartment shopping, finding spaces that they never thought were possible for themselves. Perhaps that was simply being able to afford to live alone or upgrading to a luxury building with full amenities in a prime location. When vacancy rates were high, landlords were desperate to secure tenants and offering extensive concessions.

The need for rock bottom prices and concessions came to an end as demand increased in New York. Rents in New York rose 33% between January 2021 and January 2022, nearly double the national average according to a study cited by The New York Times.

Rents in city’s most coveted neighborhoods experienced even larger swings, with some areas such as the Upper West Side and Williamsburg now seeing rents some 40% higher and even higher than before the pandemic.

Rents in some neighborhoods of Manhattan such as the Upper West Side have increased some 40%, more than double the national average

With pandemic deals expiring, rents are rising by hundreds of dollars a month. While many Renters who locked in COVID deals on their leases knew the deal was not going to last, many did not expect the extent to which rates would increase after the initial lease period.

The increase in rent, while a sign of the market stabilizing and the city recovering, is a frustrating situation for renters nonetheless.

In data cited by Bloomberg, it notes that tenants paid a median rent of $3,630 in February 2022, the highest for any month in more than a decade

What Should Renters Do?

Renters facing steep increases on lease renewals need to really asses the increased cost. While large rent increases are a hard pill for anyone to swallow, sometimes all the factors of moving can still be more than staying put.

Additionally, inventory is tight so finding a new option could also be challenging. Renters will need to re-adjust their expectations of what they can afford at their price range in today’s market.

Of course, if the proposed renewal price is simply out of your price range, begin your search for a new space as soon as possible. Partnering with a Broker that knows the city and can navigate the complex Rental Market will be a huge asset. Who you work with matters, so ensure you are working with an Agent that is a good fit. Negotiating with Landlords can be challenging so having a skilled negotiator on your side to get you the best deal is a must.

2022 Predictions for New York City Luxury Real Estate Market

2021 was a record-breaking year for the New York City luxury real estate market. In fact, Manhattan had an impressive $30 Billion on sales last year. With each New Year we receive the golden question of “what’s in store for the year ahead?”. While we do not have a crystal ball, we do have some key themes based on last year’s activity that help inform how the landscape of the 2022 NYC Luxury Market may shape up. In short, while there may be some slowdown relative to 2021, we do not see any signs of the pandemic recovery stopping in 2022.

Heading into 2022, we expect continued strength across the housing market. The start to the new year has already been a strong one for Manhattan luxury, marking the best start to a year since 2006. The week between Christmas and New Year saw 22 contracts signed on properties priced $4M and up.

We expect the following themes to rise to the top: Rising Prices, Rising Rates, Rising Investment in New York.

Rising Prices:

Prices have already begun to recover in the New York market, particularly in the luxury sector. Strong demand and shrinking supply has been placing upward pressure on pricing. This is likely to continue as inventory shortages may increase in certain pockets of the market, and we expect to demand to remain persistent. Price appreciation may not be as rapid as the past year, but we expect an upward trajectory. Additionally, supply disruptions that have increased input and replacement costs are contributing to rising prices.

Turn-Key:

Stemming off of the last point above, whether looking to buy or looking for a New York City luxury apartment for rent we expect a strong preference to remain for turn-key or renovated units. Challenges with labor costs as well as sources furniture, etc. has made a renovation a much larger and time consuming project that many individuals no longer want to do.

Rising Rates:

The Fed has given a confident signal that multiple interest rates are nearly certain this year. The most recent guidance from the Fed signaled 3 rates for 2022. Buyers have been enjoying historically low interest rates for years, so the initial rate hikes may cause an upfront “shock” to the market. Savvy Buyers that have been contemplating purchasing are moving to lock in rates and make the purchase before rates rise. 

Rising Investment in New York:

The city is incredibly excited to welcome a new Mayor and administration that has promised to shift the narrative of the city toward one of economic recovery and pro-business. A new Mayor could peak investors that were avoiding de Blasio’s New York. With the return of foreign buyers to New York City luxury real estate, rising inflation, and a strong rental market, we see a favorable environment for investors to consider New York for their investment.

2021 Holiday Tipping Guide

The Holiday Season has officially kicked off. With Black Friday and Thanksgiving over, holiday decorations are going up across town. With the arrival of the Holiday Season comes the question on the mind of many - “How Much Should I Tip?”

While some traditions will be put on hold, other traditions synonymous with the Holiday Season will continue, one of which is Holiday Tipping. 

One could argue that Tipping is even more important this year than ever before - it has been a challenging year for all, and for those that are fortunate and have the ability to tip those that have helped throughout the Pandemic, this is the year to do so.

Building staff in Residential New York City buildings have been essential to all residents through the COVID-19 pandemic. Building Staff have been responsible for increased cleaning protocols, receiving and managing an exponential increase in deliveries, and checking in on vacant apartments for residents that have escaped to second homes.

We’ve adjusted our annual tipping guide to account for 2020 - some of the individuals that are key in a typical year such as your Manicurist may not have played a role in 2020 because of the Pandemic. Additionally, if you are considering giving more this year to your valued Building Staff and are concerned they will expect this amount in future years, consider stating in your note with the tip how grateful you are for all they’ve done during this challenging year to set expectations. 

Our friends at Brick Underground publish a go-to holiday tipping guide, which has been circulating since 2013. We condensed it, and put our take on what is appropriate as you budget for your holiday tipping. Remember, these are simply guidelines. There are many factors that can influence the tipping decision such as the size of the building (a larger staff equates to smaller individual tips), level of service, seniority, and time in building. Additionally, owning versus renting in a building can play a big factor as well.

Of course, if you live in a building with a part-time doorman, virtual doorman, or no staff at all, the below levels could be adjusted downward.

Renters: Tips do not have to equate to the dollar amount you are paying each month for rent. If you receive a lot of packages, have a stroller that is carried in and out of the building, etc., factor this into your tip. 

It is recommended that you tip in cash. Doorman, Concierge, Supers, etc. all of bills to pay like you and I- they are not looking for fruit cakes, cookies, or homemade gifts at the holidays!

Many buildings have organized drop off locations for your tips so you can safely give to your Building Staff rather than direct contact due to public health guidelines.

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TIPPING GUIDELINES

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Super: $150-$200
Doorman/Concierge: $100-$150
Package Room: $50-$75 per individual*
Housekeeper: 1 Week Salary
Dog Walker: 1 Week Salary
Garage Attendant: $50-$100
Personal Trainer: $100*
Personal Assistant: 1 Week Salary
Hairdresser: $75-100*

*In the post-pandemic world, it is important to remember all the people fielding the large increase in orders you are placing and the sheer volume of orders they are now receiving, just for you alone. From Uber Eats to Amazon and every shopping destination in-between, there is no denying that we all place significantly more online orders than prior to the pandemic. We recommend tipping Package Room staff more than previous years. In most buildings it will be the package room employees, however, Doormen/Concierge are likely fielding these requests after hours.

Additionally, if someone such as a Trainer has moved to a Virtual Model and you continued to use their service, we recommend continuing to tip these individuals.

When: Most building staff will prefer to receive their tips in early December so they can plan their own holiday spending accordingly. Tips account for a large part of building staff’s anticipated income at this time of year.

This guide was presented in 2018 and has been re-shared to include updated information

Real Estate Market Braces for Return of Foreign Buyers

Key Luxury Markets around the Country including New York City are expected to benefit from boost in demand from Oversees Buyers

For key luxury markets around the country, especially New York, Foreign Buyers have been a key part of the Buyer pool. For the past nearly 3 years, this Buyer has been virtually absent from the New York Luxury Market.

The pandemic and associated travel restrictions prevented foreigners from physically coming to the United States. While some deals did occur virtually by foreign Buyers, that has been small compared to deal volume when travel bans were not in place.

We expect that dynamic to change and the foreign Buyer to return with strength now that the United States has lifted the travel ban on approximately 33 countries for fully vaccinated visitors. With the travel ban lifted, foreign buyers can once again enter the country and physically see and buy properties. We expect this to have a positive impact on the New York luxury market as many want to invest their dollars here.

For a luxury market that has continued to set records throughout 2021, we anticipate the return of the foreign buyer to be an additional boost of demand as we end 2021 and enter 2022. 

This could add tens of billions of dollars in transactions to the market.According to the National Association of Realtors, foreign Buyers spent $267 Billion on American Real Estate in 2018 and in 2019 they spent $183 billion. 

Wealthy Foreign Buyers are interested in high-end homes and New Construction

What We Expect from the Return of Foreign Buyers to the United States

• New demand in key luxury markets across the country such as New York, Miami, and Los Angeles

• New Construction will likely be the main beneficiary of this new demand as foreign Buyers prefer new product

• Thanks to increased asset prices across both real estate and equity markets since prior to the pandemic, many foreign buyers have elevated wealth

• The economic impact of travel resuming should be a positive for multiple sectors of the market - tourism, retail, and ultimately real estate.

My Lease is Expiring: Should I Stay in my Apartment or Rent Something New?

If you are currently a Renter or have rented a property before, you. Know that dreaded feeling when your lease expiration date is quickly approaching. With the expiration of your lease approaching comes the question, and decision, of: should I stay in my existing apartment, or find a new apartment to rent?

 It is important to remember there are two sides that are influencing here – you as the Renter, and the Owner or Landlord. This can be a tough decision to make as it is influenced by multiple factors – we discuss how to think about decision so you can enter your next lease with confidence.

Factors Influencing the Owner or Landlord 

When thinking about renewing an existing lease with a tenant, an Owner must weigh various costs. The owner is looking at these factors for you to stay:

1. Broker Fee: Depending on the state of the Rental market, it is likely that the Owner will need to offer a concession to secure a new tenant. This is typically paying the Broker’s fee so the new tenant does not have to. This is one’s rent or 15 percent of the annual rent.

2. Standing Empty: What is the risk of the unit sitting vacant for 1 month? 2 months? Even longer? When the empty is unoccupied, the Owner risks losing income.

3. Current Market Conditions: The Owner must have a pulse on the current state of the rental market at the time of your renewal – is it favorable to Owners or Tenants? This impacts the dynamic of their being able to increase the rent, how quickly they may be able to find a new tenant if they do not offer to renew, etc.

4. What is the last price a comparable apartment rented for? Perhaps you entered your lease when the market was lower, and the Owner may be able to rent at a much higher price in the current market. However, Owners prefer a good, known tenant that they dealt with rather than a new unknown tenant. This is where the tenants’ discount lays.

What to Consider as a Tenant

As a tenant, is important to approach the expiration and possible renewal of your lease with an understanding of the following questions.

1. How long do you need to extend for? One year? Six months? Month to month? The shorter the lease, the more it will cost monthly.

2. Current market value for your apartment that you are renting: If you have been paying significantly less than what it could rent for today, it is not unreasonable to expect some increase in the monthly rent on your new lease.

3. Cost of moving: Perhaps one of the biggest considerations that is often overlooked. Is saving $200/MO on rent really worth the cost of moving?

The costs of moving include more than just the fee paid to the Movers. There are both financial and mental costs.

Think about Security deposits, packing, finding movers, moving fees, broker’s commission, time lost from work, possible condo application fees, unpacking. Often times, this costs will largely outweigh the annual cost of an increase in rent.

4. How long do you plan on staying? Does your timeline have moving to a new location in 2-3 years, or perhaps moving in with a partner or buying a property? If so, it may make sense to stay in your existing apartment despite an increase in Rent. Again, the costs and stress of moving may not outweigh an increase in rent.

Summit One Vanderbilt Observation Deck Opens in Midtown Manhattan

A new observation deck has opened in New York City that once again raises the benchmark. Summit is located on the 91st-93rd floors of One Vanderbilt, a new high-rise office building in Midtown Manhattan. Perched 1,200 feet in the air, Summit is the highest vantage point in Midtown.

What sets Summit apart from some of New York’s other famous observation deck is the experience one you get to the top.

Jump onto the elevator from the Grand Central Terminal and ascend to Summit. 

When elevator doors open, you step into an immersive art exhibit designed by Kenzo Digital.Mirror floors and ceilings provide a unique perspective on your surroundings. Kenzo Digital intended to design a space that would feel dreamlike and an escape from the reality on the ground.

For those looking for a bit more than just gazing out to the skyline and horizon, you can experience “Levitation.” Levitation consists of 2 glass ledges suspended 1,063 feet over Madison Avenue, ensure to offer heart-racing views of the city below. 

Visitors that want to take things even higher can try “Ascent”, glass elevators that scale the outside of the building. They are the largest glass-floor elevators in the world and take passengers up 1,000 feet in just 42 seconds. 

Before you make your way back to the ground, stop by Apres to enjoy a quick bite and drinks by Danny Meyer’s Union Square Events. You can enjoy bites and drinks from open air terraces and indoor lounge areas.

Tickets must be purchased for access and are available at one the Summit One Vanderbilt website. Prices start at $39 and New York City residents can get a $5 discount.

Images via Summit

Condo vs. Co-Op: A Guide for First-Time Homebuyers

Buying a home is one of the most exciting adventures on which you will go. However, it can also be very stressful and frustrating, as finding the right property can take a lot of time and energy. In New York, we have different property types, and understanding the difference between them is important in making your decision. The market is primarily dominated by two types: Condos and Co-Ops.

If you are still unsure what is the right choice for you, we're here to help. Below, we have prepared the pros and cons of both property types. Understanding their differences and what ownership of each entails will make it easier for you to make the right decision.

Condo vs. Co-Op: the main differences

Co-ops and condos have many similarities, so it can be very difficult to notice any differences at first sight. Of course, as with many things, the devils are in the details.

A cooperative, or a co-op for short, is run by a non-profit corporation. The residents buy proprietary leases from this corporation. In a Co-Op your ownership is not that of real property but shares in the corporation. The proprietary leases are shares in the property. By buying proprietary leases, the residents gain certain rights such as access to communal areas of the building as well as to their individual units.

The main difference between Condominiums and Co-Ops is in the structure of the ownership. In a Condo, residents actually own real property and hold the deed to their unit. Additionally, the have an interest in common areas of the building such as hallways and amenity spaces. When you're buying a condo, you are going through the same process as if you were buying a house. The best part is that condominium buildings are everywhere, which is not the case with co-ops. For example, if Manhattan is your dream location, it will be very easy to find a perfect condo – most new construction projects are Condos.

Differences Between Condos and Co-Ops

As said, the main difference between these two types of properties is ownership. However, there are other things that make them different, understanding the full implications of the differences will help you decide which property type is best for your scenario.

●      Price - Condos are usually more expensive, but they give you bigger flexibility as they are much easier to sell or rent. However, have in mind that the down payments for Co-Ops are usually higher.

●      Fees - In co-ops, all monthly expenses are rolled into one bill known as the “Monthly Maintenance”. Also, the utilities are charged as per the percentage of share a resident owns. For example, if they own 3% of the property, they'll pay 3% of the electricity or water bill.

●      Taxes - When it comes to condos, as they're owned individually, the property taxes are charged in the same way as you would pay for a single-family home. As co-ops are considered a single property, property taxes tend to be lower as they are shared between the residents. In a Condo, you will typically face two monthly charges: the real estate taxes as well as monthly Common Charges.

●      Board Approval: Both property types have boards and your purchase will be subject to board approval, however, Co-Ops are notorious for having very strict boards and they do not have to disclose why they approve or disapprove a potential resident.

What to have in mind before making your decision?

Now that you know the main differences, here are a couple of more details to consider before making a final decision between condo vs. co-op. 

Consider your budget

Every home buying process starts with budget questions. Therefore, make sure to assess how much you can spend by consulting with your Mortgage Broker and Real Estate Agent in order to set your home search up for success. Before you choose a lender, make sure to check with at least three to ensure you are receiving the most competitive rate.

By thoroughly analyzing your budget, you'll have a clear picture of how much you can spend and what kind of property you can purchase.

When setting your budget, make sure to take other factors besides your mortgage into consideration. Keep in mind that co-ops are less in demand and therefore cheaper. However, owning a condo comes with low maintenance costs. You need to weigh both options and figure out what works best for you in the long term.

Also, be mindful of the size of the property you can get for your money. Perhaps the home you used to rent was big, and now you have to downsize. Therefore, you might not have enough room for all your belongings. An easy and inexpensive solution is to rent a storage unit. However, make sure to do your research and notice warning signs before making your choice. For example, if you see any water damage in the unit, that should be an immediate red flag. As you want your belongings to be kept safely, you need to choose the most reliable storage company you can find.

Consider how much responsibility you are willing to accept

The number of responsibilities you'll get with a property might help you resolve the condo vs. co-op dilemma. When you live in a co-op, it almost feels like being a part of a club or society. Every big decision such as a renovation or accepting new tenants has to be made jointly by all residents. Afterward, the elected board will act on any decision residents make.

If you decide to live in a condo, you can choose if you want to decide about these issues on your own or let the condo board make the calls. You may wish to be excluded from these decisions and be responsible only for your own property. It's your decision how much you want to be engaged.

Living in a co-op means that you'll have to participate in every decision regarding your building.

Therefore, make sure to do your research and find out what kind of expenses and obligations you are getting with your first home. Nowadays, all information can be easily found online. You can even buy a property remotely if you wish! Your real estate agent will be able to advise on the monthly common charges or maintenance costs for a given unit.

However, if you are a first-time home buyer, we definitely recommend hiring an experienced real estate agent to help you.

6 Signs You're Working with the Wrong Real Estate Agent

Buying or selling a home is likely the largest financial decision you will make in your life. It is undeniable that the search for the perfect home can be a daunting process. However, you should be aware that sometimes you might be dealing with an unqualified agent rather than a demanding real estate market.

With the historically busy Spring market right around the corner, whether you are Selling your home or looking to Buy, it is important you are partnering with the right agent to get the job done.

Has your listing been lingering on the market, or your home search lasting longer than you would like? We have listed six signs you're working with the wrong real estate agent so that you can assess if the professional you've chosen might be slowing down your progress towards purchasing or selling a property.

1. The real estate agent you hired is rarely present at showings

Attending and organizing showings is extremely important, especially if you are looking to buy or invest in a highly competitive real estate market like Manhattan. If your real estate agent cannot attend them, especially on the weekends, which are typically considered the primetime days for showings, you might be facing an issue. No matter how well-informed you may be when it comes to real estate, the very purpose of hiring a real estate agent is always to have access to an experienced and reliable advisor that can guide and inform your decisions.  

Some red flags include agents who:

• do not return your calls in good time

• are frequently unavailable or out of town

• cannot dedicate enough time to show your home to potential buyers

• cannot give you relevant advice on which property listings you should take into consideration

A good Real Estate Agent should be present and involved at all times

2. The real estate agent lacks a cohesive marketing strategy

In real estate, marketing is everything. Having an agent with a solid online presence, know-how about current real estate trends and visibility on an array of online platforms is vital for reaching buyers or sellers. If your real estate agent does not seem to be experienced in this regard, this may very well hurt your property value.

The days of relying on a simple MLS listing or a sign in your yard are long behind us, which means you need a real estate agent who will proactively search for customers beyond these obsolete marketing methods, especially if you are considering selling or buying a home during a recession. Before hiring a real estate agent, check if they use social media platforms, whether they send out mailers, or if they market or locate showings online.

Additionally, be sure to ask for the agent's marketing portfolio, which includes examples of property listings with photographs. This will allow you to assess if their marketing skills and strategies are professional enough to keep up with the ever-evolving real estate market trends in NYC. So, photos taken on an iPhone simply will not do.

3. You’re working with the wrong real estate agent if their negotiation skills are lacking

Marketing or finding a property is just one part of a real estate agent's job. When it comes down to the crunch and your agent is too passive, inexperienced, or disinterested in negotiating in your stead, you might want to consider hiring someone else.

Once the offers start to arrive, you must have someone by your side who can communicate your wishes and needs and maintain a professional and successful negotiation with all interested parties. Be on the lookout for red flags and potential oversights on the part of your real estate agent.

Once you seal the deal, you should be equally vigilant when it comes to hiring movers for your relocation to NYC. Buying or selling a home is just the start of your real estate journey, which means you have to be careful and choose the best option possible for your relocation. 

4. The agent lacks experience in market

Hiring a real estate agent who is new to the business is not necessarily a faux pas. In fact, sometimes, younger real estate agents might be even more skillful and knowledgeable when it comes to marketing on social media and other media outlets. Furthermore, they might bring an entirely new perspective to the table compared to their older counterparts that work within the same real estate agency.

However, if you notice that the real estate agent does not have the necessary information or expertise when it comes to current real estate trends in the local housing market, you might want to look for someone else. Moreover, as we have mentioned, your real estate agent should be a consummate negotiator in order to meet the grade, which in some cases comes only after a few years of working as a real estate agent.

5. The real estate agent is not familiar with the local housing market

Even if you hire a real estate agent with an extensive portfolio, this is no guarantee they are the perfect person for the job in the given real estate market. They have to be well-versed in property values in the area; otherwise, they are merely shooting blanks anytime they make an offer to a potential buyer or seller of the property.

In a city such as New York, real estate is hyper-local where it can even matter if the agent is familiar with a particular building. At minimum, working with a neighborhood expert is important, but always partner with the agent that has the most experience with your neighborhood and property type when possible.

Additionally, they should be in the know when it comes to other vital aspects that influence the value of the property. So, for instance, there are a few home features New Yorkers will pay extra for, and awareness of these and similar influencing factors can significantly impact the property's final price.

There are many factors that influence property prices in the NYC real estate market.

6. The real estate agent is too pushy

So, you have found a real estate agent who is an engaged, communicative, and skillful negotiator and marketing expert. They are also experienced enough to know all the trends and factors that influence property values in the area. You might be thinking that you are finally on the safe side and that you can now focus on your relocation and start thinking of an unpacking plan once you settle into your new NYC home.

Your agent should advise you, providing their expert insight and arm you with facts to make an informed decision

However, if the agent is too eager to seal the deal and finish the job as soon as possible, this is one of the telltale signs you're working with the wrong real estate agent. Do not let their confidence or reputation influence your decision.

Your Agent should have your best interest at heart – if that means the perfect property comes along in 1 month or 1 year, they should not be pushing the first property you see just to get a deal completed.

Thinking of Buying, Selling, or Renting? Our Team is comprised of industry leaders that execute across all the critical touchpoints of a successful transaction. Find out how we can help you

The Victoria Shtainer Team provides industry leading Real Estate services in New York City, Miami, and The Hamptons

2021 Outlook: What to Expect for the New York City Real Estate Market

With the arrival of 2021 comes new predictions for the year ahead. It goes without saying, New York City faced a very tough 2020 as a result of the Coronavirus pandemic. The real estate market came to a near halt of in-person showings and activity was ceased from March-late June. 

While many Media Outlets wrote of the mass exodus to the Suburbs and a bleak state of the Luxury Market in New York, the market actually turned a corner once in-person activity resumed in late June. In fact, some weeks of 2020 had higher contract activity in luxury properties than 2019. 

People will always need a place to call home, and we saw the power of that throughout much of 2020.

We are all entering 2021 with  guarded, yet hopeful optimism that we will turn a corner towards normalcy. We expect the market to continue its Pandemic recovery, barring any unforeseen circumstances of a large resurgence of cases, etc. The arrival of the vaccine which is expected to become more widely available as we progress into 2021 should help curb another lockdown.

What Do We Expect for 2021? We largely expect persistent demand from Buyers as the narrative shifts away from “New York is Gone” to a narrative of opportunity and recovery. We’ve already seen that the story the Media tried to paint of NYC in a post-pandemic world was not the reality. Some folks that originally left the city have already returned or have plans to return in the near future. New Yorkers and those in the surrounding areas are betting on New York Real estate and taking advantage of discounts in a big way.

Fight of the Boroughs:

We anticipate the battle between top Borough in the city to remain heated in 2021. As a result of the Pandemic features like  more space,  outdoor space, and  in-unit laundry became priorities. All of these features could be found in Brooklyn which help contribute to the borough’s post pandemic spike in activity, however, reduce pricing has made Manhattan more affordable to more people…which will win?

Buyers Will Continue their Return:

Buyers have been entering the market since the lockdown was lifted. We saw a strong uptick in market activity in June 2020 when in-person showings resumed. The year finished on a strong note, and we expect Buyers that  are serious and  know they are staying in  New York  City to take advantage. There are many factors that are driving Buyers including low interest  rates  as well as increased wealth. Many New Yorkers of means actually saw an increase in wealth during 2020 thanks to a sharp rise in Tech Stocks as well as the ability to retain employment remotely.

Low Rates Here to Stay:

We expect Mortgage Rates to stay low in 2021. Will they may inch up slightly throughout the course of 2021 (we saw numerous record lows set in 2020!), rates will remain historically at low levels. Low Rates have drastically been increasing purchasing power of both new Buyers and Homeowners looking to roll their equity into a larger home.

Deals on New Development:

The Manhattan  Luxury Condo market has been overburdened with Supply for the past few years. While some Developers have been rolling out discounts and incentives in 2019/2020, we expect discounts on new inventory to uptick. Developers are at the mercy of project financing - they need to get units sold and move onto the next project so they can pay their lenders. This means great opportunities for Buyers of New Development.

Shifting Preferences:

What ranks as important to Buyers will likely shift as Consumers continue  to  evolve their needs and wants coming out of the pandemic. We know that the multi-functional homes are a must and people now prefer outdoor space to the latest appliances, but we expect that these preferences will continue to be refined heading into  2021. In New York, there is likely to be a resurgence with  Boutique buildings with  minimal amounts of units compared to  large buildings with hundreds of homes.

What is a Co-Op and Why are They in Demand?

If you follow our newsletter, blog, and other content, you’ve likely seen us mention condos leading the board for demand over the past few years…what about co-ops? 

Many are unfamiliar with the different property types in New York City, most notably condos and co-ops. There is a seemingly endless debate of pros and cons of both, but there is a new interest in co-ops emerging as a result of the pandemic. 

To set the stage what is a Co-Op?

A Co-Op, short for Cooperative, is an ownership interest in shares of a corporation that own the cooperative. The number of shares owned is directly correlated to the size of the apartment in the building. These shares entitle the shareholder to a proprietary lease on the unit.

To contrast, a Condo represents ownership in real property so there is a big distinction in ownership interest between the property types. 

As a Co-Op owner, you are responsible for monthly maintenance fees which typically includes property taxes as well as items such as the building’s mortgage and interest, insurance, management fees, building employee salaries, and common area upkeep.

Co-Op Appeal Increases During Uncertainty

With Condos being the leading star for many years, what is making Co-Ops appeal to more Buyers than usual? The pandemic has actually positioned aspects of Co-Ops that previously put Buyers off as a positive amidst uncertainty. 

Co-Ops are notorious for their strict vetting process and Boards. In times of uncertainty, this becomes attractive to Buyers. Co-Ops typically examine a Buyers credentials and finances with a fine tooth comb, ensuring they have enough liquidity to continue to pay their mortgage and maintenance charges despite and unforeseen circumstance. 

In hard times, you are less likely to find a Co-Op owner that passed the Buildings Board vetting to be defaulting on a mortgage. In turn, that means less risk of assessments and hits to the building’s financials. 

Some Co-Ops are loosen their once very strict rules as Buyer demographics are shifting. This includes some allowing pied-a-terre purchases as well as increased financing limits.  

This trend is not new, in fact, we saw a similar attraction to Co-Ops during the Great Recessions of 2008. It is important to note that there are Co-Op buildings that have survived the Great Depression, World Wars, and 9/11 - some of the toughest times economically.

Upper East Side Co-Op On the Market

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315 East 72nd Street, 10C

Located in the heart of the Upper East Side, this rarely available oversized one bedroom 1 bathroom co-op apartment is your chance to live on beautiful East 72nd Street. This fully renovated, bright and airy apartment is a great value in a full-service co-op building.

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