Home Sales Inventory Hitting All-Time Highs Throughout New York City According To New Market Report

StreetEasy  recently released their May 2018 Market Report and it is very promising for the future.  The market report which is a monthly overview of the Manhattan, Brooklyn and Queens sales and rental markets which aggregates data from public recorded sales and listing from real estate brokerages indicates that sales inventory is hitting all-time highs.  Manhattan in particular is increases year over year that is the highest on StreetEasy's record.  The figures are promising as inventory has been hampering the sales market for some time now.  These figures will hopefully allow buyers to have a better negotiating stance going forward.

According to the report, inventory in Manhattan rose 16.7% year over year which is the highest increase ever recorded.  Queens and Brooklyn saw increases actually higher than Manhattan.  Queens saw an increase in inventory of 42.8% while Brooklyn saw a 23.4% increase.  Although there was an increase in inventory, sales prices also increased throughout the three boroughs.  Queens is seeing all-time highs in home prices as there is a 9% year over year increase to a value of $544,587 or a $45,000 increase.

 Grant Long, Senior Economist for StreetEasy states the following: “Sellers are betting on a wave of demand from the peak shopping season, but this summer’s market has turned out to be a crowded one. However, prices are high and continue to rise. More affordable homes are the hardest to find, and are sure to sell quickly. But higher-end homes, particularly those joining the market from the ongoing stream of new development, will be pressured to lower prices or linger on the market. This summer is poised to offer an excellent negotiating opportunity for buyers with big budgets.”

Here are some of the highlights of the report per borough:

"Manhattan

• Sale prices rose in all submarkets but one. The StreetEasy Manhattan Price Index increased 0.6 percent to $1,157,995. Prices rose in four of the five submarkets, led by an increase in the Upper East Side, where the median home price rose 1.9 percent to $1,038,046. Prices in Downtown Manhattan remained flat at $1,691,204.
• Inventory rose at a record pace. Sales inventory in Manhattan rose 16.7 percent year-over-year. The Upper East Side experienced the largest increase, with inventory up 20.2 percent since last year.
• Fewer rentals offered a discount. Sixteen percent of rentals in Manhattan were discounted in May, a decrease of 1.6 percentage points from last year.

Brooklyn

• Prices reached new highs in North Brooklyn. The StreetEasy North Brooklyn Price Index increased 11.1 percent to $1,229,838, a record high for the submarket despite the looming L train shutdown. Borough-wide, prices rose by just 1.1. percent since last year, to $720,555.
• Sales inventory continued to climb, except in North Brooklyn. Sales inventory in the borough reached a record high — up 23.4 percent over last year. Inventory rose the most in South Brooklyn, which saw a 44.7 percent increase over last year. North Brooklyn was the only submarket where inventory dropped, by 6.7 percent since last year.
• Rents rose in all submarkets except North Brooklyn. The StreetEasy Brooklyn Rent Index increased 1.4 percent year-over-year to $2,562. South Brooklyn experienced the largest spike: up 2.6 percent to a median rent of $1,885. North Brooklyn was the only submarket where rents stagnated, likely because of the L train shutdown starting in April 2019. Rents in the submarket remained flat at $3,062.

Queens

• Sales inventory swelled. Queens saw the largest year-over-year increase in inventory, rising 42.8 percent. All five submarkets in the borough saw a surge in inventory.
• Queens was the only borough with an increase in the share of discounted rentals. Seventeen percent of Queens rentals offered discounts: up 2.9 percentage points over last year, and the highest share of the three boroughs analyzed."

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

 http://www.blueharbourpropertymanagement.com/home-sales-inventory-hitting-all-time-highs-throughout-new-york-city-according-to-new-market-report/

What NYC Property Management Companies Should Know About NYC's Smoking Policy On Residential Buildings

On August 28, 2018, the City of New York has placed as the deadline for all owners of all Class A multiple dwellings, including all cooperative corporations and condominiums to adopt a “smoking policy.  Local Law 147/2017 requires all buildings with 3 or more units to adopt a written policy with regarding to smoking on the premises.  What should be taken into account is that that smoking in the common areas of residential buildings such as lobbies and hallways has already been prohibited.  Also of note, this is not a smoking ban but a policy of smoking in residential units.  Property management companies in New York City should advise their boards in either condos and co-ops and owner of rental units of the upcoming Local law enactment.  They should also start preparing for the implementation in written form.

For condominium and co-operatives, it is implied that the board of managers (condos) or board of directors (co-ops) should adopt a written smoking policy and incorporate it into their by-laws as they would be considered owners. The law provides that “in a condominium, the board of managers shall incorporate the building’s smoking policy into the condominium by-laws or rules” and “in a cooperative apartment corporation, the board of directors shall incorporate the building’s smoking policy into the by-laws or rules of the cooperative apartment corporation.”  This issue that will become central is how will the boards have the ability to amend by-laws without unit owner or shareholder approval.  Amending the proprietary lease in co-ops will also be difficult and most of the time requires a super-majority of owners to do so.  How these boards resolve this issue is one that will be further analyzed as their policies get scrutinized by the City.

So now let's look at how the notice requirement can be met on this rule:
For purposes on residential buildings that are strictly rental the rules are the same without having board approval first which is necessary for condos and coops.  Once a board adopts a policy for smoking, it must be disclosed by “owner” to all “tenants”.  Tenants includes subtenants as well.  The smoking policy must either be provided to each tenant or posted in a prominent location.  A copy of the smoking policy must be provided to all tenants on an annual basis. The annual distribution can be given either by providing a copy to each tenant or by posting the notice in a conspicuous place.

For new tenants or resident the law provides that the condominium unit owner and cooperative tenant-shareholder incorporate the smoking policy into “any agreement to rent or purchase the dwelling unit or shares in the cooperative apartment corporation”.  Therefore it should be incorporated into all new leases going forward.
The penalties for not complying with Local Law 147 can be costly.  Specifically initial penalties will be between $200 and $400 for a first violation.  Second violations will be between $500 and $1,000 in a period of twelve months and between $1,000 and $2,000 for a third and subsequent violations in a period of twelve months.

With right amount of planning complying with new smoking policy in New York City should not be difficult.  For more information on Managing Smoke Free Rental you can click here.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

NYS Senate Passes Bill to Give A Property Tax Rebate To Homeowners From the NYC Surplus

The New York State Senate recently passed a bill authorizing the City of New York to give a property tax rebate to homeowners based on the projected surplus the City will have.  The bill sponsored by Andrew Lanza from Staten Island would authorize cities with a population of one million or more to provide a rebate of a portion of the real estate taxes on owner occupied residential real estate.  New York State Comptroller Thomas P. DiNapoli announced a projection that New York City will enjoy a surplus of $2.6 billion for this current fiscal year. This bill is based on these projection and would “empower New York City to share some of its prosperity with the hardworking families according to the press release.

The bill which you can read in its entirety here will affect residences up to 6 family units and tenant stockholders of condos and co-ops.  The rebate will be the lesser of up to $400 for the amount of the imposed annual tax liability on the property.   The bills allows the local law to be changed in order to give the rebate for the period between July 1, 2018 and ending at July 13, 2020.  In order to receive the rebate, the owner cannot be in arrears in an amount exceeding $25 for the year in which the rebate will be claimed.

Senate Majority Leader John Flanagan states, “There are very few places in New York where the cost of living for middle class homeowners is higher than in New York City. On top of that, the city property tax system is very unfair and the tax burden continues to rise at alarming rates. For years, our Senate Majority has been leading the charge to cut these out-of-control taxes and fees, and this legislation will help ensure that struggling homeowners in the five boroughs are given real savings.” Senator Lanza who sponsored the bill stated that he would continue the fight on burdensome real estate taxes.  “With the projected City surplus, this rebate will provide relief to hardworking taxpayers from the ever increasing burden of city property taxes. I urge my colleagues in the Assembly to pass it. I also thank Councilman Steve Matteo for his tireless efforts and leadership as he fights to deliver property tax relief to the people of Staten Island and New York City, and I will continue to work with him toward that end.”

The bill will not go to the Assembly where it will be scrutinized before a vote to occur.  Senator Martin Golden of Brooklyn called upon the Assembly to make the bill a priority for passage so it can be signed by Governor Cuomo.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/nys-senate-passes-bill-to-give-a-property-tax-rebate-to-homeowners-from-the-nyc-surplus/

Northeast Existing-Home Sales Increase Despite Nationwide Downward Projection

The National Association of Realtors (NAR) released their report on existing-home sales for the month of May and it shows that the national trend of sales in the sector is trending downward for the second consecutive month.  All markets show a drop off with the exception of the Northeast which saw a 4.6% increase.  The numbers come as no surprise as inventory as well as increase mortgage rates are hurting the industry.

According to the report, which is considered completed transactions including single-family homes, townhomes, condominiums and co-ops, decreased 0.4% to a seasonally adjusted annual rate of 5.43 million for May. Sales are now down 3.0% from 2017.

Chief economist for the NAR Lawrence Yun stated “Closings were down in a majority of the country last month and declined on an annual basis in each major region. Incredibly low supply continues to be the primary impediment to more sales, but there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market.” Despite seeing almost historic levels of decreased inventory there was an increase this month.  Housing inventory jumped in May 2.8% to 1.85 million existing homes available for sale.  It is worth noting that this is 6.1% lower year over year.

The Northeast was the only region that saw an increase in existing-home sales.  In May, sales increased 4.6% to an annual rate of 680,000.  This amount is still 11.7% below the same time in 2017.  The Midwest saw the most drastic decline in 2.3% followed by the West at 0.8% and the South at 0.4%.

Also of note, median existing-home price for all housing types hit an all time high in May at $264,800.  This is up 4.9% from May 2017 ($252,500) and the 75th straight month of increases.  Mortgage rates also increase for a 7th consecutive month to 4.59%.  The increase in both sales prices and mortgages rates are hampering first-time home buyers in entering into the market according to Yun.  “The abrupt hike in mortgage rates this spring, along with price appreciation and competition being the strongest in the entry-level part of the market, is why first-time buyers are not as active as they should be and their participation remains below its historical average.”

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/northeast-existing-home-sales-increase-despite-nationwide-downward-projection/

NYCHA Admits to Misleading HUD. Will Pay $1.2 Billion In Next 5 Years to Fix Conditions In Affordable Housing

The U.S. Department of Housing and Urban Development (HUD)  reached an agreement with New York City to fix hazardous conditions in buildings under the control of the New York City Housing Authority (NYCHA).  The federal complaint which you can read here and filed on January 11, 2018 alleges that NYCHA violated basic health and safety regulations that protect children from lead based paint.  NYCHA also failed to provide safe and sanitary housing.  HUD and NYC have reached a settlement in the matter which a consent decree was filed.  The decree can be read in its entirety here orders NYC to provide $1.2 billion in additional capital funding over the next five years and $200 million every year thereafter until the problems are fixed.  A federal monitor will be set up in order for NYCHA to meet their goals under the decree.

According to the consent decree NYCHA's certifications to HUD contained untrue representations that they were complying with HUD’s federal lead paint safety regulations.  The complaint also alleges that NYCHA disguised the conditions of the properties in order to receive billions in federal funding.  Also of note are the following admissions:

• NYCHA’s data admits that there were more than 260,000 work orders for roaches between 2013 and 2016.  Between the same period there were 90,000 mouse work orders and 36,000 rat work orders.
• In more than half of NYCHA’s developments, NYCHA’s inspections, including statistical sampling, have confirmed the presence of lead paint somewhere on the premises, and in at least 92 developments, the inspections, including statistical sampling, have confirmed the presence of lead paint inside apartment units.
• Since at least 2010, NYCHA has not performed most of the biennial lead paint risk assessment reevaluations required by regulation for developments containing lead paint.
• Currently, after NYCHA has removed mold from apartments, the mold returns at least 30% of the time.
• In the winter 2017-2018, more than 320,000 residents or 80% of the public housing population lost heat.

The consent decree will allow NYCHA  resume spending from its existing public housing capital funding without seeking prior HUD approval.  HUD maintained an existing zero threshold for NYCHA which prevented them from using funds.  In a press conference today Mayor deBlasio requested that the state legislature release $550 million dollars that have been held for NYCHA since 2011.  He also requested from Governor Cuomo design-build authority which would allow the City to award a single contract for engineering and construction.

Ben Carson, HUD Secretary stated “This historic agreement marks a new era for New York City’s public housing, one that puts families and their children first. New York City and New York State are making an unprecedented commitment to put NYCHA on a new path. The cooperation of federal, state and city officials will vastly improve the living conditions for hundreds of thousands of New Yorkers who call NYCHA home.”

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/nycha-admits-to-misleading-hud-will-pay-1-2-billion-in-next-5-years-to-fix-conditions-in-affordable-housing/

Market Survey Shows That New York City Construction Costs Remain The Highest Worldwide

Turner & Townsend, a multi-national company famous for their project management and program management consultancy work released their annual International Construction Market Survey.  According to the company,  the survey collects information from 46 international markets to determine to global state and direction of the market.  The survey indicates that New York City leads the world in construction costs for the second year in a row in the Turner & Townsend survey.
The five most expensive locations are New York City, San Francisco, Hong Kong, Zurich, and London. The survey looked at 6 different types of buildings in order to assess total building costs. 

The buildings that were taken into consideration were the following:

High-rise apartments
Office block prestige (Commercial office space)
Large warehouse distribution centers
General hospitals
Primary and secondary schools
Shopping centers including malls

Overall construction costs in New York City decreased 12 percent in 2017 and expenditures were measured at $45.3 billion.  This is the second highest on record after 2016. They are forecasting expenditures to hit $52.5 billion in 2018 citing recent tax cuts as an incentive for driving businesses back to the United State and specifically New York City.

Future developments will revolve around government fund and non-residential construction.  "Non-residential and government-funded construction will drive much of the growth in 2018 and 2019. Government expenditure is expected to reach USD16bn, with half spent in New York City.  New York is currently experiencing massive redevelopment.  The biggest project is the USD20bn Hudson Yards, which includes 18 million sq ft of commercial and residential space. The Long Island Express, a USD10bn transport project, includes a station under Grand Central. Meanwhile, La Guardia airport is adding a new USD8bn terminal. Employment in construction is at record levels with skilled trades in short supply."  The report indicates that the overall forecast looks bright driven by positive economic growth.  Construction costs will remain high as there is a shortage of skilled labor in NYC. 
The outlook nationwide looks rosy as well as construction costs hit an all-time high of $1.3 trillion last year.  Skills shortage and material costs continue to plague the industry.
On the salary side, New York City was second behind Zurich Switzerland where the average wage was $98.30 per hour in comparison to Zurich's $104 per hour.  The report did indicate that only high union wages were taken into consideration and did not include private sector rates.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/market-survey-shows-that-new-york-city-construction-costs-remain-the-highest-worldwide/

Landlord Responsibilities and Expectations for Lawn Maintenance

The summer months are ahead of us and now is the time that nature is really taking a toll on our lawns.  Most property management companies and property owners take the duty of maintaining their lawns seriously.  Having a presentable lawn brings substantial value to your property.  Some landlords also shift the responsibility to their tenants but most of the time it doesn't benefit the parties involved.  Since this is mostly the case, here is our suggestions in maintaining your lawns during the summer month.

Why tenants should not be responsible for lawn care
Sometimes owners and property management companies decide that it would be advantageous to have their tenants upkeep the lawns of their properties.   The customary agreement would be the landlord would reduce the amount of the rent by having the tenant take care of the lawn.  The reason some landlords decide to this is the time involved.  If you are a landlord with multiple properties it is time consuming to schedule with your tenant and having the work done.  Whether it be performed by yourself or using a lawn maintenance company there is a benefit, in theory in shifting the resources towards the tenant.
The problem in this situation is tenants sometimes neglect their responsibilities or do not perform the job that is expected.  Landlords should always have in writing what the expectations of lawn maintenance is for the tenants.  This is normally done as an addendum to the lease.  Whether it be just mowing the grass or the additional effort of removing tree limbs, weeds and using pesticides all of these issues should be addressed in an agreement.  The failure to do so will result in you having to do the work yourself or hiring someone, costing you additional monies.  Plus the added confrontation with the tenant is not beneficial to anyone involved.

Landlords responsible for lawn care
Without an agreement otherwise, the landlord or property management company is normally responsible for the maintenance of the property's lawn.  Although it may increase the cost to the tenant, the benefits to the owner far outweigh the added rent.

By taking on the responsibility of the lawn care, the landlord is in total control of the look and expectations surrounding the exterior.  In most instances, landlords in this situation find it advantageous to hire a professional lawn care provider.  By doing so, you now have the advice of professionals who understand what is needed as having their expertise and tools to handle any issue that might arise. The added benefit of fertilizing and reseeding when necessary is another great benefit of using a professional outfit.  Partnering with a company will certainly save a landlord time and in some instances money.  This is especially true if you have multiple real estate investments in New York City.

What is the right fit for you?
At the end of the day it does come to how comfortable you are with your tenants and the level of service you will receive.  In our experience, it advantageous to use experienced professionals to do the job.  No one wants to inspect their property and see dead dried out grass or overgrown weeds.   If you decide not to, remember always have it in writing what you are expecting!

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/landlord-responsibilities-and-expectations-for-lawn-maintenance/

Pending Home Sales Drop In April Amid The Ongoing Housing Shortage

The National Association of Realtors (NAR) is reporting that pending home sales for April decreased for the first time in three months.  NAR used a Pending home sales index which saw their reading drop to 106.4 for April.  The drop was 1.3% from March which saw the index level at 107.8.  Pending home sales have been adversely affected the the shortage of available housing available as the levels of housing is considered "dire" at this point.

Pending Home Sales Index is an indicator based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing according to NAR.
Lawrence Yun, chief economist doesn't see a change in sight unless more new and existing home sales hit the market.  The market is being affected by higher mortgage rates, increase home sales prices  and increased gas prices will affect the market ahead.  He states

“Pending sales slipped in April and continued to stay within the same narrow range with little signs of breaking out. Feedback from Realtors, as well as the underlying sales data, reveal that the demand for buying a home is very robust. Listings are typically going under contract in under a month, and instances of multiple offers are increasingly common and pushing prices higher. The unfortunate reality for many home shoppers is that reaching the market will remain challenging if supply stays at these dire levels.”

“The combination of paying extra at the pump, while also needing to save more for a down payment because of higher rates and home prices, may weigh on the psyche of those looking to buy.  For now, the economy is very healthy, job growth is holding steady and wages are slowly rising. However, it all comes down to overall supply. If more new and existing homes are listed for sale, it would allow home prices to moderate enough to stave off inflationary pressures and higher rates.”

It should be noted that although the inventory shortage, Yun still predicts an increase of existing home sales of .5 percent to 5.54 million.  Also of note in our region, the index indicates no change in the pending home sales index as it remained at 90.6.  This is 2.1 percent the same period last year.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/pending-home-sales-drop-in-april-amid-the-ongoing-housing-shortage/