Latest For LearnVest: A 2014 Real Estate Forecast

My latest piece for LearnVest is a forecast about national real estate in 2014. The market has been all over the place in the last five years, what with high foreclosures in some areas and median prices in the mid to six figures in other areas. (Hello, New York City!)

I spoke with some experts and combed a little data and came up with this piece. Since most dinner party conversations eventually turn towards real estate, read up and sound smart over dessert.

What’s Happening in Real Estate in 2014

Holiday Lull? Go Look For A House

I have a quick piece on LearnVest today about why the winter lull is a good time to look for a house. Back when I was a broker I liked this time of year a lot since people who were looking were motivated and closed things up quickly. I still tell friends who are looking to rent to move between November and January. The inventory is lower, but, at least in Manhattan, prices are lower as well.

House Hunting? Why Winter Is a Great Time to Buy Real Estate

New Huffington Post Piece

I'm at it again over on The Huffington Post, with a piece that explains why the vacancy rate in Manattah has tightened up and why rents have gone up more than most expected this year.

Three Reasons Why Vacancy Is Tight in Manhattan and Rents Are Higher

I Love It When I'm Right, Which Is Often

Back in January, I wrote a piece for The Huffington Post about how, from my perch in the trenches on Manhattan real estate, it seemed as if the rental market was changing -- rents were higher, there were fewer incentives for tenants, etc. Most of my clients this past winter were relocating to the city with well-paid jobs. Many were frustrated by the lack of no-fee apartments, or that the owner wouldn't throw in a free month of rent.

Is A Warming Rental Market A Sign Of A Better Economy

Today, the New York Post had a piece about how, in fact, according to real numbers, there is less inventory and rent is higher.

The Rent's High? Too Damn Bad

And the Wall Street Journal, last week.

Manhattan Rents on the Rise

If there's one economic indicator that I'm obsessed with (and who doesn't have a favorite?) it's the unemployment rate. Moreso than new home sales or construction, the unemployment rate, specifically in New York City, affects my business directly. If you don't have a job, you can't rent an apartment. If you can't rent an apartment, then I make no commission.

This piece about the national unemployment rate dropping to 8.8% was good news. Since all economics is local, I'm even more pleased to see that it's 8.7% in New York State. It's slightly higher in New York City, but the data includes all five boroughs, not just Manhattan. The Bronx, which has a ridiculously high unemployment rate, skews the numbers.

According to this chart, unemployment in Manhattan is less then 8.0% While still high, it's lower than it was last year.

A few days ago Business Insider ran the following chart that also implies an increase in hiring.

This is the private payrolls diffusion index. When the breadth of industries adding jobs is as wide as it is, payrolls will advance.


All this means that as a tenant -- in Manhattan -- you can't belly ache that the economy is bad and therefore the rent shouldn't go up. (I've been getting a lot of that lately.) If people are employed, then their $3000 apartment from two years ago is now going to be $3200 or more, because the owner can clearly get $3200 from a new tenant.

There's another, more basic reason for rising rents in Manhattan: inflation. Prices go up over time. You don't need a Ph.D in economics to know this. Landlords are running a business, not a charity. To think that rent will never go up, despite the rising cost of heating oil, basic maintenance, local taxes, etc. is silly. While you may be renter, the owner is just that -- a building owner -- and he is absorbing all the costs of owning real property. If a boiler needs to be replaced or a roof patched, it will be reflected in your rent -- recession or no recession.

And that, mes amis, is why the brief, halcyon days on lower rents in Manhattan is finished.

One Building, Two Exclusives

This was the week of new exclusives. I have two new ones on 37th and Park, in a gorgeous townhouse that has laundry.

First, the $2200 one bed. Deco fireplace, high ceilings, new kitchen and tons of closets. Third floor walk up.


On the first floor is a mammoth floor through unit with a backyard. It could also be used as professional space. Enormous living rooms and bedrooms, built in book cases, two bathrooms and yard. New kitchen, tons of closets. $4400.

A Few Great Apartments

I spent the past two weeks checking out new apartments, and below are a few of my favorites.


Living in a West Village loft is a lot of people's dream, and it's actually not difficult to find. This building on Greenwich Street has some wonderful one bedrooms with an extra loft that can easily double as a second bedroom or a home office. It's full of young people and families, has a doorman, elevator, laundry and everyone seems to have a dog. Studios are available as well.


For the same money as one of those West Village lofts, you could live in this new building in Murray Hill. I am all about high floors and insane views. I would live in the unit below. It's a two bedroom, two bath with a living room that over looks both the city and the water. It also has a real entry hall with a large closet, which I find very homey.



No one has ever called me up and said, "Hey, I want to live in Midtown East!" But I have had five clients who ended up there, and quite happily, after not finding anything they liked in Gramercy and the East Village that was within their budget. I even have two friends who ended up on the same floor of the same building thanks to my suggestion. There are some great deals to be had in the east 50s, on everything from rental studios to purchasing intact brownstones.

The place below is awesome. It's a large one bedroom, gut renovated with a modern kitchen. It's a pre-war building with a gorgeous common courtyard. I don't know what the building was before it was converted into apartments, but it's quite unique. Even the bathroom is large.

And The Italian Job Is...CLOSED!

After weeks of wrangling with a co-op board, assuring the client that she would get in when she was ready to cut bait, finally getting a meeting last night and handing off keys an hour ago, she's moving her suitcases out of the hotel and into her new place. 22 days after her lease was supposed to start.

I only get frustrated in the absence of logic, and there was very little when dealing with this particular co-op board. When it comes to getting someone into a unit for rent, there is no need to ignore phone calls, e-mails, or otherwise give people the runaround. Apart from being passive aggressive, it creates needless tension between everyone involved, even the people who are supposed to be on the same side.

I find that it's always better just to be accommodating, even if it's slightly inconvenient or may involve breaking a sweat. Need something brought to your office? Three times in one week? No problem. Need to bend policy a bit to get someone in early when they're moving from another country? What does that cost? Nothing. And it gets things done quicker, which makes everyone happy. To quote Les Miserables, "Glad to do my friends a favor, doesn't cost me to be nice."

But this in New York, and nice is not part of the natural habitat, nor do I expect it to be. I'm more amazed at what lengths people will go to in order to be a pain in the ass, and often for no reason other than a low-grade power trip. I've said it before: the crapper the building, the crazier the co-op. It never fails.

...and now somewhere in this town there is a $6 bottle of wine with my name on it.

It's been a crazy week. I've been out and about with clients, I have a lease signing tomorrow as well as lunch with an old friend from Connecticut. I also have another client who just moved here from Italy who is living in hotels because a co-op board refuses to get back to us about the state of her application. She's being a good sport thus far, but everyone involved -- including myself, the client and the apartment's owner is stressed out. Even my accounting department is confused, because they don't know what to do with all the money she wired over for rent, fees, etc.

It's all made me a little tense, and when I get tense, I start having opinions. Hence, a new post on the Huffington Post about competitive motherhood in Manhattan.

I've seen a lot of apartments this week, from $1400 studios in the East Village to $4000 one bedrooms on the Upper East Side with 36th floor views that could melt your face off.

One apartment that I took two client to was huge, furnished -- and smelled musty. This was strange, since it was in a new building with a fancy marble lobby and a gym. The owner outfitted it with 1970s era wooden furniture and the place stunk. The listing agent later e-mailed me for feedback, which is always a dangerous thing, especially when I am juggling many clients and an Italian ex-pat who's holed up at overpriced hotels and losing patience with a co-op board.

And so it goes:
"The furnished client didn't like the furnishings and the non-furnished client wasn't thrilled with the green walls or the outdated kitchen, which is a shame. The space is amazing. Also: owner may want to consider taking some of the older furniture out, since it smells like mothballs in there. Not sure if you were aware.

But the building is awesome as is the unit. It just needs to be an ounce more modern. Those afghans really turned off the furnished client."

Seriously, afghans? If you're ever trying to rent a furnished unit, don't add knick-knacks like afghans and Precious Moments figurines. Furnished clients are looking for basic pieces -- a nice couch, TV, dining table, etc. They don't need the window dressings.

The bottom line is that if over the next few days you ask my honest opinion about something, chances are you're going to get it. And it's going to be really honest, reflecting the ball of sunshine that I am right now. Buyer beware.

Wall Street Journal Rental Market Article Fail

Oh look, an article about the housing market that makes no sense at all. Quelle surprise.

An excellent example of some shabby reporting is this Wall Street Journal piece. He's talking about the the glut of rental apartments nationwide. The key word here is nationwide. Yeah, there are parts of the country that have been hit badly by the recession and areas where there isn't a huge rental market have a lot of inventory. No shock there. This strikes me as being a clear example of supply and demand.

It's clear this writer wants to make some connection to Manhattan, but instead of giving us actual numbers about the vacancy rates, he finds some lame quote from a recent renter. Nothing from a broker, a brokerage firm or even an analyst, and analysts are always more than happy to speak to the press. New York City, by the way, doesn't even show up on the list of cities with the most concessions to renters. And generally speaking, offering a free month of rent isn't much of a pain to a landlord. Very few landlords are operating on fumes. The concessions are offered just to make sure their units get rented so that their cash flow continues. Quite a few Manhattan landlords use their rentals properties as cash sources for larger development and investment projects.

The New York City rental market is still nice and tight, at least in the prime neighborhoods. You'll notice that his quote from the token renter doesn't mention where she rented. Was it the West Village? The Upper East Side? These are two completely different markets.

Back in September I spent over a week trying to find a $3000 one bedroom in Chelsea for a client, which is a pretty common price point in the neighborhood, and we had maybe six to choose from. Where was the glut of inventory that the press likes to make so much noise about?

The majority of the WSJ piece just rehashes a bunch of housing info that even the most leisurely follower of the news would already know, but it doesn't tell the New York reader much about their city. Which one would expect, considering it is The Wall Street Journal.

One thing to keep in mind when reading any kind of journalism, especially financial journalism -- and this is coming from someone who worked in the biz for eight years -- is that very few journalists have ever actually worked in the field that they cover. Veteran or even plucky writers obviously become quite good at what they do, but in this economy, where reporters are getting laid off in high numbers through no fault of their own, their next gig may likely have nothing to do with what they were doing before.

One large area of growth for journalists is financial journalism. Financial web sites are becoming a cottage industry, and their quality varies. A novice business reporter starts out by churning out pieces about earnings reports and economic indicators, (such as the piece in question) and eventually expands to larger think pieces. But if you put a gun to their heads and asked them to explain a credit default swap or a few basic mathematical models, they couldn't do that. Is that problematic? Perhaps.

Which isn't to say that I, personally, am suspicious of all business news. Back when I was hanging around Old Greenwich, I took a 7:29 train into Manhattan in the morning with quite a few people in decision making positions. They all read the FT, which got me into reading the FT, which is why I still have a subscription.

An Explanatation Of The Global Economy That Won't Insult Your Intelligence

CFR.org - Crisis Guide: The Global Economy

Shared via AddThis

The Council On Foreign Relations has an excellent multimedia project that explains in great and intelligent detail the roots of the whole economic crisis. Most of it is video, but there are some Google Motion Charts and other graphs and timelines as well. Totally worth checking out.

They have similar interactives about topics such as Darfur, Climate Change and North Korea. Smarten up before your next cocktail party.

NYC Housing Prices: Bottoming Out Or Realistic?

, originally uploaded by La Pauline.

The economy has made it difficult for buyers to know if they're getting a fair price for what they're bidding on, or if they should wait for prices to drop a bit more. It's a good question, but there is a logical way to approach pricing, even in this unsteady market.

It's times like this that we have to remember that real estate has always been considered a long term investment, not something that you can cash out on in a year or two. A typical apartment in Manhattan appreciates anywhere between 3% and 7% a year, as is shown by the orange and green lines above.
.
When you read sensational headlines about housing prices sinking 20% to 30%, keep in mind that they're sinking from an artificial high, as shown by the blue line. What may seem like a bargain basement price now, compared to two or three years ago, is actually the natural appreciation of the unit.

Prices of closed deals on condos and co-ops city-wide in the first quarter of 2009 can be found here.

Chart above courtesy of the Vanderbilt Appraisal Company.

Welcome To My Doorman/Elevator...Tenement

Guess what? TR and I got screwed by his co-op board! (Only in New York...)

Now that I've stopped sobbing, I can tell the tale: Last week, on a whim, I called the management company to see the status of our inquiry to sublet out TR's alcove studio since we are having a baby in June. I asked to sublet as of June 1 for up to three years, but I secretly would have taken any day that they gave me.

We got a date all right: Spring/Summer 2010.

It seems that his co-op only allows 15 shareholders at any given time to sublet, and we are on a waiting list with 10 other people. Three of those people are also families who are expecting children.

I asked the woman on the phone if she realized that TR's place is a studio, and that it is likely against some fire code to have two adults and an infant living in essentially 520 square feet, including closet space. (Someone please tell me this is true, and back it up with documents.) She said, "Not to be rude, but you're not the only people in the building who are having a baby." True, but we are likely the only ones in a studio.

You know the old joke about a baby sleeping in a drawer? This might actually be the case for my little bean.

True, it's one heck of a view from the 21st floor, but the board is a little out of touch with the current economic climate or the fact that sometimes rules have to be adjusted in order to keep shareholders happy. Then again, maybe the board doesn't realize their building is on Second Avenue, not Park Avenue.

Other flaws with his board and building (since you asked):

1. They charge for common storage. Even in my rental building, which is also doorman/elevator, and, arguably, nicer, storage is free. Why do people pay to store things in a building that they're already paying maintenance to?

2. Parents cannot buy units for children unless the child is employed and can pay mortgage and maintenance on their own. Granted, if they could do that, they wouldn't need their parents helping them out, would they? (And the board wonders why not one of the six studios on the market have moved in over six months, nor has the two bedroom on the first floor.)

3. At least one doorman is known for hooking up with female resident(s). Klassy!

Again, not the kind policies I would expect east of Lexington Avenue.

Please send booze. Preferably a 2005 Bordeaux, Grand Cru or Premier Grand Cru. Since we're being charged for common storage, I'm turning our slice into a wine cellar/panic room.

Short Sales: What You Need To Know

There's been a lot in the news lately about short sales: when a homeowner's lender agrees to accept less than is owed on the mortgage for the property. They occur all over the country -- even in Manhattan -- and can be a way to get a deal on a place, albeit with a few caveats.

Be Patient With The Process: Short sales should be called long sales. In some cases, it could take months for a buyer to hear back from a lender, especially if the owner has two mortages or liens against the property. Perhaps just as frustrating as the wait time is the fact that you likely won't be privy to details as the deal is progressing. That could mean going months without an update.

There Are Deals to be Found in Short Sales -- But Don't Expect Outright Steals. A buyer needs to make a fair offer, based on comparable homes that have been sold recently. The offer should be aggressive, but not ridiculous.

Sales Are 'As Is' In a short sale, it isn't likely that you will get allowances from the seller for repairs that are needed, as you might in a traditional sale. Do a home inspection and know what you're getting into.

Have A Back Up Plan: When an offer is accepted and earnest money is put down, remember that you risk losing those funds if you decide to walk away and buy another home.

It's Not Only About Price: A short sale is only a bargain if it's a home that you truly want to live in -- not something you're drawn to only because of its low price tag.

Live On Park Avenue For $2100 or $2400 A Month

Who says you can't live in style in a recession? An amazing pre-war building right on Park Avenue in the 30s (yes, you'd have a proper Park Avenue address!) has two huge units available -- for $2100 and $2400. They've been on the market for all of two days.

First, this one on the fourth floor of an elevator building with a part time doorman. Roughly 700 square feet, it has a large living area that leads to a balcony. (Very Eva Peron!) It's drenched in sunlight, has French doors and lots of closets.


View from the balcony


Bedroom is king sized with real parquet floors and large windows.


On the second floor of the same building is an even larger one bedroom for $2400, roughly 750 square feet. It has soaring Catherdral ceilings, over sized windows, parquet floors, built in shelving with a library ladder so you can always reach your favorite volumes. Bedroom is king sized and there are many closets throughout the apartment. $2400.


You'll never have a dark day here!


Are you a cook? Large kitchen with dishwasher as well.

An Actual Conversation I Just Had With A Broker

Broker: I have a question about the listing on West 19th Street. The listing says Penthouse D, but this building has eight floors, no penthouses.

Me: Um, it would be the top floor.

Broker: You mean the roof? The apartment is on the roof?

Me: No. It's the top floor. The eighth floor.

Broker: I went up there and there are only units A through D. No penthouse.

Me: The available apartment would be 8D, then. Penthouses are generally the top floor.

Politeness Is Good For Business

Sunday can be a tricky day for showing apartments, since most supers don't like to show places or be bothered. Sunday is a good day, though, for showing doorman and luxury buildings, since keys are usually at the desk or there's an on site rep who shows you around.

This afternoon some pied a terre clients called me to tell me they were coming into the city to look at their final three choices. Since they are great people I was more than happy to make myself available. And so I called each on site agent at their favorite buildings and set up appointments for the afternoon. Given that the clients were coming in from out of town, they got delayed. Here's how the on sites reacted.

Building A: Was more than happy to see us on short notice, and had no problem whenever I had to call and push up the time by 20 minutes or so.

Building B: Is a nice, but overpriced place whose on site agent that visibly annoyed when my clients were 20 minutes late. "I have a 3:30 appointment," the woman told me. "And I go home at 4:00, so let's hope they show up soon."

Building C: Is a very overpriced new development where pretty much every unit looks out onto a brick wall. The on site agent was confused that my clients were even in town, since he had called them earlier in the day when it was snowing. But the snow cleared, and in came my clients who wanted to see his building again.

I had to push up our appointment, which is when the on site agent called me and asked, "Why are you late? Are these people even serious? I thought our building was the only one they were looking at!" It was a funny statement, since his building was actually their least favorite. And in New York, every one has at least three choices for everything.

The takeaway? When one works in a customer-service oriented field, such as real estate, does getting annoyed at someone like me about traffic and weather and parking delays do any good in the long run? My clients, again, who are from out of town, are relying heavily on my opinion and insight when it comes to making their final choice. I didn't get any static from Building A, and as luck would have it, it seems to be their first choice.

I'm Huge On The Internet!

I love it when other blogs pick up on my writing, and not just because it strokes my ego. I think my piece in The Huffington Post about the need for accurate reporting about the real estate industry made some important points, so I'm glad when web sites like Foreclosure.com agree with things that I've written.

A Sunday In The Life Of La Pauline

This past Sunday was one of the busiest ones I've had, literally, since July. While there may be a recession and a credit crunch and a foreclosure problem in this country, New York City chugs along. Snow and cold, incidentally, does not stop people from looking at places, even if it means climbing four flights of stairs to get to the unit.

11:00 a.m.: Open house for this apartment on West 12th Street and Sixth Avenue. Since there was that big football game at 1:00 we decided to do the open house earlier, and sure enough, people came out of the woodwork. I am a little surprised that we don't have an offer yet for this place, but perhaps it is just a matter of time. It's a one bedroom that could easily be converted to a two bedroom. Great block, doorman building and bright.

1:30 p.m. Hustled down to Sullivan Street to meet up with a young guy from England who needs a place in the Village. We saw a few on Thompson Street that weren't quite right. We're going out again today to tackle the East Village.

2:45 p.m. Met up with a couple who are the Williamsburg version of TR and I: early 30s, arty and expecting their first baby in June. The three of us had a great time checking out places in the East Village and Chelsea. They may have liked the first one they saw. The girlfriend, is the first woman I've found who is craving oranges and smoothies like me. Good to know I'm not a weirdo. Do you know how many oranges I carry in my purse on any given day?

4:00 p.m. I thought I was going to have to show this place to a couple in the West Village, but it's been rented for two months and won't be free until March. (I'm always the last to know.) Yet, the couple still wants to see it. I'll have to iron something out with the new tenants.

I walked all the way back to Murray Hill from Chelsea, stopping once for a burger and a coffee at the diner. Spent the evening playing around with Pandora. Such a charmed life.

Latest HuffPo Piece: Accurate Reporting About The Housing Market

Hack journalism about the housing market doesn't do anyone any favors, so I wrote about some examples of it in today's piece on The Huffington Post. Enjoy!

Quality Reporting Is Key When Writing About The Housing Market