All Forum Posts by: Jason Lee

The rental market is slowly improving. We've had a record number of new lease signings each week for several weeks but rents are still down quite a bit and vacancy is still high (although it's trending down). If we remain at this same pace of new lease signings we could approach "normal" vacancy before the end of the year. That's probably not likely though and so I don't see how rents can completely recover.

The sales market is hot right now. We had the 7th straight week of over 300 contracts signed in Manhattan which is amazing and we had the 7th straight week of over 30 or more contract signed over $4M (41) which is the longest streak going back as far to 2006 which is as far back as this data was tracked. Prices seem to be holding but I don't see how we're going to have appreciation anytime in the near future. Prices were softening pre-covid and the fundamentals for any appreciation have only gotten worse since.

How about some actual data to help with these predictions?

There were 6,561 new leases signed in Manhattan in February. That's a 112% increase YOY. That's also the fifth straight month having a record number of leases signed since 2008 (which is the earliest this info was tracked). But what about landlords manipulating the market by "warehousing" apartments? The data suggest approximately an extra 1,209 apartments warehoused in February YOY. That seems to be outweighed by the extra 3,472 new leases signed.

Of course we're not out of the woods as median price is still down 14% and inventory is up 154% YOY, but things are improving steadily. Listing inventory is trending down since the peak in October, and the vacancy rate has decreased each month since peaking in October. If we continue to improve at this same pace (that's a huge IF) we would be back to "normal" vacancy by the end of the year. Something to hope for.

Anecdotally, the majority of tenants I've met recently are moving to NYC because they can work remotely from anywhere and they want to live in NYC. Then there are those that need more space because they can work from home and those that are looking to trade up because they can get a little more for the same price. No, I'm not getting a bunch of C class applicants for  B class properties. Even with the lower rent you still have to make over 100K to rent a B class sub 500 sq ft studio from one of my landlords.

In the sales market we had another week of over 300 contracts signed, the sixth straight week of over 30 contracts signed above $4M, and supply is down. We are quickly transitioning from a neutral market (it was a buyer's market not long ago) into a seller's market. The sales market is hot.

RIP NYC? I don't see it.

Things look different in the sales market in Manhattan. Number of contract signed in February was up 73% YOY. That's the 3rd straight month of YOY increases. Total number of contracts signed in January and February is highest since 2015. Meanwhile supply is down. We've had 5 straight weeks of 30 or more contracts signed above $4M which is also breaking records going back several years. 

I mainly sell condos in Manhattan. This is a bad idea. If you get lucky you'll have negative cash flow of at least $500 a month. That's not including any vacancy. And that's if you can even get a mortgage. Depending on what your own housing costs are, you probably wouldn't qualify as your total debt-to-income would be too high. If you want to stick with condos and you want cash flow you'll have to find lower cost areas where you have low enough LTV where you actually cash flow.

If you want to sell there is no reason to wait. Supply is down and pending sales are up 46% YOY (that's pre-covid). There were more contracts signed last week than any other week going back to May 2016. The market at this price point is hot.

Why would you consider selling under market value? We're seeing some bidding wars at lower price points.

You can call them what you want but it's still 90% financing and if you make your offer as 80% you're going to get tripped up when you get to the contract which would state you're looking for 80% max in the financing/contingency portion, then later on in the seller's rider where you represent you have the additional 10% cash to bring to the table. It's not to say 90% can't work but it depends on the price point, your competition, and how motivated the seller is. I haven't seen a 90% deal in awhile but I'm pretty sure Wells and Citizens can do it... and many others.

This is an 80-10-10/piggyback loan and works as you described except you're opening the first and second/HELOC simultaneously. This allows you to avoid PMI as well. It won't work for co-ops unless they allow 90% financing which most don't. The bigger issue you'll have is that many sellers won't be thrilled with a 90LTV offer. Depending on what price point you're looking the market is heating up and 90% is not going to be that attractive.

Prices in Cliffside Park are still going up. 13.8% YOY in January for townhouses and condos. Supply and inventory are down quite a bit, closed sales are up. It's looking a bit frothy... like almost everywhere else.

This doesn't quite add up. How does the buyer walk away a couple days before the closing without losing their deposit?

Also, I wouldn't consider 5% off asking, for all-cash, for an investment property, in this market, a lowball... but there's perspective.