When buying a home, a major part of your financial profile is determined by your assets – and more specifically which of these assets can be considered “liquid.” Both lenders and coop boards will have different liquid assets requirements, and what they consider liquid may vary... What Is Asset Liquidity? Assets are items that you own that have value. Among other things, assets can include cash in your pocket, savings accounts, stocks, jewelry, real estate, even things like professional degrees. These assets can be classified as liquid or non- or il-liquid. When an asset is “liquid,” it has cash value or can be easily converted to cash. Common Examples of Liquid Assets: Cash Deposit account funds (checking and savings) Certificates of Deposit (CDs) Stocks Mutual funds Bonds Common Examples of Non-Liquid Assets: Real estate property Jewelry Artwork Electronics Furniture & other personal effects Professional degrees Non-vested Accounts/stocks/options Being the beneficiary of revocable or inter-vivos trust Retirement accounts straddle the line. If you are over a certain age (close to the age where you can access the funds), some may consider retirement funds liquid (usually banks, but maybe not coops). Even if you are not at or close retirement age, banks (but not coops) may take into account your retirement funds in determining whether you meet reserve requirements. For example, many lenders require that you to have at least 6 months’ worth of liquid assets available to pay your principal and mortgage interest, and some lenders may reduce this to 3 months if you have adequate retirement funds. Co-ops typically have far more stringent requirements – some may require that you have as much as 2 years of “post-closing reserves” meaning you would need to have 24+ months of your anticipated monthly mortgage principal, interest, and building maintenance payments in truly liquid assets after you close. Why Is Asset Liquidity So Important? Liquidity is important in cases of financial emergency. Imagine that you own a parcel of land that is quite valuable, along with some rare Picasso paintings that your dear, old Aunt Beverly left you in her will. Aside from that, you have a decent job, however your monthly expenses are around the same as what you’re making, so you can’t really save that much. But when you look at your balance sheet, you’re pretty well off, at least “on paper.” Now say an unfortunate financial emergency befalls you, like an unexpected auto repair or medical bill. You still have to pay your mortgage, but you can’t because you don’t have anything extra saved up, and you don’t want to borrow the money from someone else. Now you could sell that parcel of land or one of your pieces of art, but that takes time. Appraisals must be made, buyers must be courted. These things take time – time you don’t have – and your mortgage is due before you would be able to liquidate these assets. Those assets don’t help you in a financial emergency because, relatively speaking, they’re not liquid enough to do you any good when you need them. Because of this, lenders and co-ops alike require that prospective buyers itemize their assets carefully. This ensures that in the unlikely event of an emergency, the chance that the buyer will default on their loan, or be unable to pay monthly building fees, remains low. #FAQ #FAQBuyer

Smart technology is everywhere now: From Alexa to Nest to Google Home, we almost expect our homes to run themselves these days. In the age of technology, there is hardly any part of our lives that remains untouched by gadgets. Beyond convenience (and for second home-owners, a reliable indicator that your second home is actually still standing), smart home technology can increase resale value and increase appeal to prospective buyers. A recent CNET-Coldwell Banker poll found that 81% of respondents would be more likely to buy a home that had smart technology pre-installed, and 66% of homeowners are willing to leave their smart technology behind for buyers if it meant their house would sell faster. Beyond what it means for stand-alone homes, buildings throughout New York City are incorporating these improvements and upping their amenities to entice renters and buyers. Take a look at some of the most interesting and black mirror-esque technologies we’ve seen offered, as well as items that you can incorporate into your own home. So, Alexa, what are some of the most interesting smart home technologies? Smart Entry and Intercoms Not necessarily a high-end offering anymore, keyless entry and wireless intercom systems are found in many newly renovated buildings. A popular building entry system is Latch, which connects residents to the building’s front door and their own apartment door through their cell phone and the Latch app. Keyless entry is often paired with wireless video intercom systems, also controlled through cell phone apps, increasing smartphone connectivity to home amenities. Cameras From security cameras to pet-cams that help ensure Fido is not destroying your new rug, monitoring your home remotely is now easier than ever. Having a home security system used to mean signing up for a costly security service like ADP, who would hardwire cameras and other bells and whistles all while charging an ongoing fee. Today, you can easily order a Nest or Ring system and set up cameras in whatever corner of the house you want. Complete with apps and cell phone alerts, you can now keep track of your home security, nanny, or pet right from the palm of your hand. These systems even have facial recognition, so you don’t have to go through the hassle of having your camera mistake you or family members as intruders. Thermostats An extremely popular smart improvement is automated and wireless thermostats. One of the most favored products is NEST smart thermostat, which, at only $249, is a great way to make your life more convenient, and even save some money on heating and cooling. NEST allows residents to control their apartment’s temperature though a simple mobile app. From the comfort of your bed you can lower the temperature if you like it colder when you sleep, and you can even raise the temperature before leaving work so it is warm when you arrive home. Better yet, the app will learn your habits, and will automate these temperatures on its own. Lighting Smart lighting falls under two categories — smart overhead lighting and automated curtains. Whether it’s overhead lighting that can be controlled through a remote, an app, or through Amazon Alexa, lighting has become much more advanced (yet much more convenient) than walking over to the light switch and manually controlling your lights. Smart light bulbs often allow for dimming regardless of whether the fixture itself has been wired dimming or not. Besides the optimization of electrical lighting, natural lighting can also be controlled by smart technology; once a luxury seen only in movies, motorized curtains are becoming more and more common, with buildings offering this as a hot-ticket amenity. Even if your building doesn’t offer automated shades, companies like the Shade Store can come and install them for you — I just had these installed in my own house last week, and have to admit there is nothing better than shutting out piercing morning light with the press of a button. Smart Appliances While just taking off, smart appliances have been making headlines for their development and compatibility with Amazon Alexa and Google Home. Samsung has been at the forefront of smart appliance development, with offerings including smart stovetops, smart washer and dryers, and even smart refrigerators that track groceries, a family calendar, and play music. Communal Offerings Beyond what is offered in apartment units themselves, many buildings are also making an effort to improve their communal amenities as well. Communal spaces themselves have been an up-and-coming trend, but in a real estate market where competition stiffens every day, buildings have tried to further amp up their amenities. Basic things like free wifi and printing services are being offered in most higher-end buildings, along with more advanced amenities such as the TopBrewer app, which allows residents to order beverages on an app before picking them up in the communal lounge (the smart brew tap will prepare the drink, so no need for a barista). The TopBrewer app is featured in Murray Hill’s House39, which also has a transit screen in the lobby that projects real time transportation statuses, as well as Lyft, Uber, Via, and Zipcar updates. Another hi-tech offering increasing in popularity is a smart mail system. Package Concierge is a wall unit with mailboxes that sends residents notifications when a package is delivered. When residents want to retrieve their packages, all they have to do is put their phone to the scanner and the mailbox opens so they can retrieve their package. Not only does this make tracking shipments easier for residents, it also simplifies the mail sorting process for building staff. While not every building is jumping on the smart home technology bandwagon, there is definitely a growing trend, especially among new developments, to offer increasingly "tech-friendly" amenities. Even if your building doesn't offer any high-tech communal amenities (yet), there are still plenty of items you can purchase and install yourself to incorporate "smart" aspects into your own home. #BlogPosts

Just last month, lawmakers in Albany and Governor Cuomo enacted The Housing Stability and Tenant Protection Act of 2019, which brings significant changes in New York State’s rent laws. While much of the legislation affects rent-regulated (stabilized/controlled) units — such as changes to vacancy deregulation, preferential rents, major capital and individual apartment improvements — there are also important changes that affect ALL rental units. So whether you’re a landlord or a tenant, here are some of the important changes to take note of: Caps on application fees & security deposit. When signing a new lease, security deposits are now limited to one month’s rent. There is also a new limitation on application fees: a landlord may not collect an application fee except for background and credit checks, and even then the landlord may only collect $20 or the actual cost of the screening, whichever is less. The landlord may not request the fee from the applicant unless the landlord provides a copy of the background and credit checks, as well as the receipt or invoice for the screening. Tenants may also be able to avoid paying the fee if they provide the landlord with a copy of a background check and/or credit check conducted within the past thirty days. Right of inspection and "cure path" for post-tenancy repairs. Before taking occupancy, the tenant now has a right to inspect the apartment to create a written document attesting to the condition of the unit. Prior to surrendering the apartment, the tenant may have another inspection where the landlord gives the tenant an itemized list of repairs or cleaning that may be the cause for deductions from the tenant’s security deposit. This "cure path" allows tenants to amend the conditions itemized before the end of their tenancy. For any outstanding issues, the landlord must provide the tenant with a final itemized statement indicating what deductions were made, if any, and the reasoning why within 14 days after the tenant vacates the premises. Late fees and rent demands. Late fees cannot be charged until more than five days after the due date, and cannot exceed $50 or 5% of the monthly rent, whichever is less. If a tenant has fallen behind on rent, the owner may ask the tenant to pay the full amount that they owe — this is called a rent demand. Rent demands now allow the tenant 14 days to pay the owed rent, whereas previously, tenants were only given 3 days to pay. Renewals or rent increases above 5%. If at the end of the term the landlord intends to raise the rent above 5%, or chooses to not renew the tenancy, the landlord must send notice to the tenant by process server (not mail). The law requires 60 days’ notice for leases of at least one year (but less than two years), and 90 days’ notice for leases of two years or more or where a tenant has lived in the unit for two years or more. These are just some highlights, but you can find the full text of the new legislation here. Some of the provisions leave room for interpretation, so if you have concerns or questions, please reach out and we can connect you with landlord-tenant attorneys that are familiar with the changes. #BlogPosts

Talk about a possible recession has been swirling for months, and the market has taken a hit in anticipation. While no one has a crystal ball, the consensus is that we are probably due for a recession, but it is unlikely to be as catastrophic as 2008-09. While no one can say exactly when the recession will hit (many speculate it will be around election time), the NYC housing market has been trending downward due to tax law changes that have limited certain homeowner deductions as well as hesitation on the part of buyers who are waiting for the “bottom.” Our clients across the real estate spectrum have been asking our advice on how to weather (or capitalize) on these economic conditions: Sellers need to understand that pricing is key. Accurate and strategic pricing is important no matter the economic climate, but with current conditions the margin for error is razor-thin. Traffic is down overall, and only properties perceived as “deals” or having good value are having any traction. Another piece of advice we’ve been telling our clients is to be patient. Even very hot properties that would typically be snatched up in a week or two are taking longer than anticipated, and with fewer offers. For less hot properties, the time to contract is even more protracted. In some cases, properties that languish on market end up selling for prices that are way below initial asking, while others do sell at the expected prices, but after months on the market instead of weeks. Buyers, it is your time to shine! Interest rates are at all-time lows and prices are about 10-13% lower than in previous years (and more for condos over $3M). That said, we are seeing some herd mentality on the part of many buyers who are sitting on the sidelines rather than capitalizing on these opportunities. While no one can predict when the “bottom” will come, even if things get a bit worse before they get better, pricing has already largely adjusted in anticipation of the recession and other factors, and there are risks (like rates or lending standards or increased competition) for buyers who wait to see if prices will drop a few extra percentage points. Remember, you only know you hit the bottom when things turn back up. Renters are facing tough times as rental prices hit an all time high last quarter in all boroughs. For renters who have the means to consider buying, there are deals out there and opportunities to lower your monthly costs through purchasing. For some renters, there may be unique residences available to rent for a couple years as owners are delaying selling, but otherwise, it is mostly good news for landlords. For everyone in NYC, it’s important to keep in mind that the market here is resilient -- even in the middle of the last recession, prices in NYC remained fairly strong when prices nationally plummeted and foreclosures ruled the day. From Q4 2008 to Q4 2009, the median condo sale price fell 11.7%, but co-ops only fell 6.7%, and both began to correct fairly quickly in 2010 and soon exceeded pre-recession levels. If you have any questions about how to navigate the current market, please don’t hesitate to reach out. #BlogPosts

At my homebuyer seminars, I always begin by addressing the pervasive misconceptions about buying an apartment in NYC. Here are six things that I hear all the time: 1.) “I’m not going to live in New York forever.” NYC has a way of sucking you in no matter what your intentions, but that’s beside the point. Buying an apartment in NYC need not be a lifelong financial commitment since most buyers can expect to break even within five years, and that’s assuming a very modest rate of appreciation. Of course, this may not hold true in the event of a significant economic downturn (like 2008), but even in such cases, NYC’s market has shown its resiliency by bouncing back within a few years and then exceeding pre-recession values. For that reason, it is important to plan ahead to avoid being in the position of selling during a downturn. 2.) “I can save money by not working with a buyer’s agent.” A buyer’s agent is compensated, indirectly, by the seller via his agent. The person who gets a windfall when a buyer is unrepresented is the seller’s agent since most listing contracts have the same commission regardless of whether the seller’s agent has to share his or her commission with the buyer’s agent. Having an agent on the buy-side means the buyer’s interests are better represented, and the buyer has someone to negotiate on their behalf, rather than the seller’s agent acting in a dual capacity representing both buyer and seller. In almost all sale transactions in NYC there are agents on both sides, and in my personal experience, prospective buyers who are unrepresented tend to present haphazard offer packages at non-competitive levels. Being represented by an experienced agent also sends a signal to a seller that the buyer is serious and will be prepared throughout the process. 3.) “I can’t buy as nice of an apartment as I can rent.” To the surprise of many buyers, the monthly carrying costs of owning a home (including mortgage payments) can be roughly the same as the monthly rent on a comparable unit. Even where monthly costs are slightly higher than a comparable rent price, unlike rent paid to a landlord, a big chunk of these payments (often ⅓ or more) goes toward the equity in the property and other portions may be tax deductible. 4.) “I want to buy a condo, so I can renovate it how I want.” The perception that condo boards will let you do what you want is generally misplaced. If you live in a building where you share walls, entrances, and elevators with other residents, you can’t renovate willy nilly. Almost all buildings (both condo and coop) have alteration agreements which set forth rules regulating how renovations are done in order to protect the quality of life of other residents (such as hours of construction, duration of renovations, use of elevators….) and to maintain the physical integrity of the building (such as requiring an architect to vet layout changes, prohibiting wet over dry, … ). Alteration agreements aren’t designed to destroy an owner’s renovation dreams, but rather to make sure that one person’s toilet doesn’t leak down into someone else’s living room, or that your neighbor’s renovation doesn’t last 6 years. Often, boards will welcome renovations that are done properly and safely as these raise property values in the building. 5.) “The cheaper the apartment, the better the deal.” Many first-time homebuyers are easily enticed by listings that at first glance appear to be a bargain. However, an unexpectedly low price tag almost always means there is something about the property that makes it worth inherently less than comparable properties or that the building’s financial condition makes ownership costlier or more risky. The market here is highly efficient and moves quickly unlike many places, so a lower price tag is not usually about timing or a lack of buyers at that particular time, but due to some flaw or immutable characteristic which will limit the upside in the future. That said, there is a property for everyone, so if a buyer is ok with brick wall views and lack of light, they can pay less and enjoy the space all the same so long as they remember that when it comes time to sell, the property won’t be right for everyone so the selling price down the line will also be below market. 6.) “I’m too early in my search to reach out to an agent.” Many first-time buyers only reach out to agents once they are fully ready to buy. Before that, they have spent countless hours thinking about their budget and stressing out without actually having the right information. A good agent would never push a buyer to rush the process, but can save a potential buyer lots of time and wasted energy, as well as getting them on a more efficient plan to be ready to buy. It is never too soon to reach out to an agent who will be able to answer your preliminary questions, and help you feel at ease and knowledgeable throughout every stage or your search (even if that stage is just browsing listings for fun). Buying a home is one of the biggest decisions someone can make, but it doesn’t need to be the most painful. If you or someone you know is thinking about buying a home, we are here to help with any questions, big or small. #BlogPosts

Many buyers are intimidated at the prospect of competing against an all-cash buyer for a hot property -- but does cash always win? First, to address a common misconception: most buyers, and especially those vying for co-ops below $3M, are relying on financing to some extent, which means a majority of active buyers are submitting offers contingent on obtaining that financing. So as long as you have enough funds to cover the minimum down payment amount (typically 20%) along with required closing costs/reserves, your offer is still competitive -- and even more so if you’re able to put down 25% of the purchase price. That said, the mighty all-cash buyer still has a huge advantage, right? Well, not necessarily. First off, the seller gets the same proceeds whether they are paid by the buyer or his lender. More importantly, all-cash buyers tend to grossly overestimate the value of their cash and their draw as an all-cash buyer, leading them to make noncompetitive offers. But an all-cash offer does have some value. Certainly it will tip the scales with all else being equal. And in some situations it might justify a modest discount on the sale price. The value to a seller of an all-cash offer is based on the following two advantages: (1) Faster Closing. In a typical deal, eliminating the mortgage application and underwriting process can cut anywhere from 10-25 days off the duration of the transaction. Buyers who are financing typically have between 30-45 days from contract signing to apply for their loan and obtain a commitment letter from the bank. Upon receipt, they usually have another 3-5 business days to submit their board package or building application. Cash buyers typically have 10-15 business days from contract signing to submit their building or board application, so the time savings to a seller is really only about 3 weeks. (2) Eliminating risk. To understand why and how cash reduces risk, it’s important to consider the three things on which financing hinges -- the buyer, the building, and the unit. By the time a seller accepts a buyer’s offer, they will feel pretty comfortable with the first two of these factors, so the only question mark is whether the unit will appraise at the contract price. While low appraisals are not common, even a $1 shortfall could jeopardize a financing-contingent deal where the buyer is putting down the standard 20% of the purchase price. However, the consequences of a low appraisal diminish as down payment amounts increase over 20% of the purchase price. In these cases, an all-cash buyer is effectively no better in terms of risk than a well-qualified buyer who can (and agrees to if necessary) put down 25% or more. It is important for all-cash buyers to be realistic about the value their all-cash status holds. Most often, the discount that it can entice is not worth tying up their capital or foregoing other benefits of cheap financing options. #FAQBuyer #FAQ

New development is a category all its own in NYC real estate and includes both ground-up new construction and pre-war conversions (essentially new construction inside of a pre-war building shell). Everyone knows there is a cachet (and price premium) to buying brand new. What are the pros and cons of buying in a new development? Pros of New Development 1. Floor Plans Designed for Modern Living: Naturally, new developments are designed with today’s buyer in mind: en suite master bathrooms, double vanities, walk-in closets, large open plan kitchens with high-end appliances and vented hoods. New developments tend to maximize their usable square footage by eschewing layout elements often found in their pre-war counterparts, such as long hallways, closed kitchens, and over-sized foyers. 2. Quality of Finishes: To get top-dollar, developers know they have to invest in high quality, eye catching finishes. At a certain price point, that means things like solid slab marble counters, rainfall showers, high-end appliances, solid white oak flooring, and custom cabinets and tiles. 3. Amenities: Standard amenities in new developments include central heat and air, in-unit vented washer/dryers, heated floors, “smart home” features, and premium materials and appliance suites. A larger development might also have a full-scale fitness center (perhaps with a pool), a roof-deck or other shared outdoor space, doormen and concierges, cold storage for grocery deliveries, bike and private storage, resident lounges, business centers, parking, and a host of other amenities for children and pets. 4. No Unknown Renovation Costs or Headaches: Renovating is neither cheap nor easy, and a new development represents the ultimate in a move-in ready product with the home delivered pristine condition all the way down to scuffs on the walls and dings on the floor. A buyer in a new development is paying for finishes so exploring the different options in different projects is a major part of the process, unlike in resale where many buyers focus more on the potential of the space with some updating in mind. 5. That Feeling of Being the First. Most of my clients who have bought in a new development say that the main draw for them was being the first to live in their home. Many new development buyers are repeat offenders who will trade in their home for a brand new model when it’s time to move. Cons of New Development 1. Higher Closing Costs: Developers almost always seek to shift to the buyer certain closing costs that would ordinarily be paid by the seller in a resale. These “asks” usually include state and local transfer taxes, which come out to 1.825% of the total purchase price for over $500,000, the sponsor’s attorney fees for closing, reimbursement fees, document preparation fees, etc. Even if the buyer does a good job of negotiating who pays closing costs, the buyer will almost certainly have to contribute a couple months of common charges to build up the building’s reserves at the onset -- and possibly even a substantial fee toward a superintendent’s apartment. 2. Higher Monthly Carrying Charges: New development condos, especially in new construction, tend to have substantially higher monthly costs -- both common charges and taxes -- than their resale counterparts. The higher common charges can be attributed to the cost of maintaining amenities, but the taxes are also higher because they are assessed anew, unlike in resale or conversion projects. The taxes can also be unpredictable for those who commit to purchasing in the early stages, when the taxes are mere projections in the offering plan and have not yet been assessed. 3. Unpredictable Timeline: There is always some uncertainty about when a buyer in a new development can finally close on an apartment. And even after closing, there may be further uncertainty about when the amenities and common spaces will be completed and operational. An experienced developer may be able to minimize delays, but much is outside of their control. For example, closings might not begin until a certain number of units have entered contract and the city has completed its many rounds of inspections. 4. New Construction Concerns: While most new development sales come with a guarantee of quality for major systems and the soundness of construction for a certain period of time after completion, it is almost inevitable that there will be some minor issues in the first few years. The building will “settle” (which means, at the very least, cracks in the paint) and there will almost certainly be a leak somewhere. Of course, there are horror stories about major issues -- like pervasive water infiltration -- but these are very rare, especially at certain price points. If possible (i.e. if the building is already built and the unit is ready), we always recommend having an experienced inspector thoroughly go over the property prior to signing the contract. 5. Price: Finally, the most obvious con of buying in a new development is the price premium. Prices for new development tend to run at least 15% higher than older resale inventory, and can be much, much more -- for example, in the last quarter, new development two-bedroom condos in Manhattan traded on average about 43% higher than resale ($2.65M vs. $1.85M). While some of the astronomical price tags have been negotiated (and many quite significantly) down during the slowdown, many new development units (about a quarter) have simply sat unsold as developers have not had to rush to lure buyers in the same way individual sellers have had to do. Developers are in the business of building to make a profit, and also have additional obligations to investors and lenders that limit how negotiable they can be on prices. Ultimately, it is a personal decision whether having a shiny new place is worth the price premium, especially as today’s new construction is tomorrow’s resale. #BlogPosts #FAQ #FAQFindingaHome

With NYC poised to enter Phase Two of the NY State reopening plan on Monday, June 22, real estate showings and other activity will resume. We anticipate a surge in new listings in the next few weeks and will monitor the market closely for pricing trends. In the meantime, here is an update on the first half of June: Negotiability The most recent Compass negotiability survey, which tracked offers made in Manhattan and Brooklyn from May 16th to June 15, was fairly consistent with data from earlier in the month. Brooklyn buyers seem to expect less negotiability than Manhattan buyers, while Brooklyn sellers have been much less willing to entertain offers more than ~5% below-ask than their Manhattan counterparts. In Manhattan, 36 total offers were reported, with a median negotiability range between 7-9.9% below-asking for the 24 successful offers (although notably, 54% of accepted offers were at least 7% below-asking. Of the 12 rejected offers that were reported, all but three (75%) were at least 10% below-asking, with a median discount range between 15-16%. In Brooklyn, 46 offers were reported, with 31 accepted (median negotiability range 1-3.9%), and 19% of these were at no discount from the listing price. Interestingly, median negotiability for the 15 rejected offers was not much higher -- 4-6.9% -- indicating buyers in Brooklyn have been far less inclined to offer significantly below asking than in Manhattan. Activity The first half of June saw a 37% increase in new listings in Manhattan and a 32% increase in Brooklyn compared to the second half of May, but overall, new listings across both boroughs were down more than 36% versus the same time period last year. Contracts signed between June 1 - 15th were also down 70% in Manhattan and 52% in Brooklyn this year compared to last. Details below:

As the first few regions of New York enter Phase 1 of the State’s re-opening plan, I wanted to share some data on where the NYC real estate market is now, and what we may see in the second half of 2020. Current Market Conditions Since the “NY on PAUSE” order began on March 22, agents have been extremely limited in their ability to list, market, and show properties. While some transactions have taken place, most have been closings of deals that had been negotiated before March 22nd. From mid-March through the end of April, very few new sales listings entered the market, and many active listings were temporarily de-listed. Agents are not permitted to show listings in-person, and even when this restriction is lifted (possibly in mid- to late-June), we may see many buildings continue to restrict the access of real estate agents. Since May 1, we have seen a handful of new listings come to market – there were 37% more new listings the week of 5/4 than the previous week -- but overall new listings are still down about 78% compared to last year. Most new asking prices appear to be at pre-COVID levels and we have not seen price reductions on existing inventory; however, this is not an accurate reflection of where we expect prices to be as (1) it is premature for price reductions when showings are limited/non-existent, and (2) agents/sellers expect most new offers to be significantly below ask and for sale prices to show greater-than-usual negotiability. There is very little hard data, but we have received the results of a few surveys that provide us with some preliminary insight on negotiability. This data is not comprehensive, as it only includes responses of brokers who opted-in to respond, but I find it useful nonetheless. These surveys suggest that prices will begin to trend ~ 5-10% lower as real estate activity resumes. It’s also clear that a fair number of buyers expect greater negotiability and discounts, which sellers still seem unwilling to accept. Halstead Survey - Based on 105 offers self-reported by agents between 3.22 - 5.8: The average difference between ALL offer prices and ALL ask prices was 13.79% (105 replies) The average difference between offer and ask in deals that were ACCEPTED was 6.78% (40 replies) The average difference between offer and ask in deals that were REJECTED was 18.10% (65 replies) In MANHATTAN: The average difference between ALL offers and ALL asks was 15.59% (76 replies) The average difference in deals where offer was ACCEPTED was 7.25% (26 replies) The average difference in deals where offer was REJECTED was 19.92% (50 replies) In BROOKLYN: The average difference between ALL offers and ALL asks was 9.09% (23 replies) The average difference in deals where offer was ACCEPTED was 4.93% (13 replies) The average difference in deals where offer was REJECTED was 15.08% (10) Thank you to Fritz Fagan, Exec. Director of Sales and Leasing for Halstead Manhattan, for sharing this information. Compass Negotiability Survey 3/16 to 4/15 - Based on 61 offers self-reported by agents (includes both accepted and rejected offers):​ In MANHATTAN (39 offers): 15 offers < 4% below-ask 12 offers 4-9.91% below-ask 6 offers 10-15% below-ask 3 offers 16-20% below ask 3 offers +21% below-ask 69% of all offers made were <10% below-ask In BROOKLYN (22 offers): 12 offers < 4% below-ask 6 offers 4-9.91% below-ask 2 offers 10-15% below-ask (both for townhouses priced $2M-$4M) 1 offer 21%+ below-ask (for a +$2M condo, not accepted) +82% of offers made were <10% below-ask. Compass Survey for Offers Made 4/15 - 5/15 - Compass later changed the survey questions and methodology, and the more recent survey tied the negotiability to results. Based on 119 offers self-reported by agents: In MANHATTAN (79 Total Offers): 52 offers (66%) were SUCCESSFUL (meaning they led to an accepted offer) 27 offers (34%) were REJECTED 38% of ACCEPTED offers were <4% below-ask 85% of ACCEPTED offers were <10% below-ask 78% of REJECTED offers were >10% below-ask, and 56% were >15% below-ask In BROOKLYN (40 Total offers): 30 Offers (75%) were SUCCESSFUL (meaning they led to an accepted offer) 10 offers (25%) were REJECTED 50% of ACCEPTED offers were <4% below-ask, another 47% were 4-9.9% below-ask Only 1 ACCEPTED offer was +10% below-ask Only 4 REJECTED offers were <10% below-ask, while 60% (6 offers) were >10% below-ask Expectations for 2020 Market Activity With the current drought of listings, the big question is when will new listings come to market and how will negotiability, buyer interest, and overall sales activity change throughout 2020. Currently, I’m expecting to see two bursts of listings: Mid-to-Late June -- Hopefully NYC’s infection data will continue to decline over the next few weeks, and we will qualify to enter Phase 1 of the State’s re-opening plan by mid-June. This will allow construction, manufacturing, and wholesale business to resume. Assuming infection rates and other metrics remain stable, we could be ready to enter Phase 2 – which includes professional services such as real estate – a few weeks later. In Phase 2 we expect there to be a significant uptick in sales activity. My expectations for this period are as follows: There are many listings in queue, and while there is some pent-up demand in the market, the rush of inventory will likely outpace this demand. Listing prices will likely be similar to pre-COVID, as there will still be very limited closed sale data that reflects transactions made during the pandemic. Most offers made/accepted will likely be lower than ask. To the extent there are buyers out there in June, they will be looking for deals. Many buyers (and sellers) will opt to "wait and see" through the summer. Activity and demand in the market will likely vary widely by price-point, with the higher end of the market (+$2M) seeing far less activity than the <$2M market, especially as many of these buyers have left the city for the summer. Early September (after Labor Day) – Given the talk of a possible resurgence of the virus in late Fall, I expect most sellers will opt to list ASAP in September to get ahead of a potential second wave. Everyday life may be somewhat back to normal at that point, and buyers are likely to feel more comfortable with their financial and job security, especially if the economy is on the mend. It will be significant for both buyer and seller confidence during this period if we have evidence of improved treatments/prognosis for COVID-19, especially if these indicate that a significant resurgence is unlikely. Even without this, if schools have opened back up, many more prospective buyers will have returned to the City. This should result in an increase in demand, although lingering economic uncertainty and quality of life issues may mean that some buyers are still hesitant to pay premium prices. We can also expect to see an adjustment in listing prices due to a new wave of closed sale comps from the Summer months that will be available come Fall. Expectations for Pricing in 2020 & Beyond Overall, I expect that inventory will exceed demand for the remainder of 2020. While many sellers will try to wait out 2020 with the hope of listing in a more settled market next Spring, there will inevitably be a backlog of properties with sellers who just can’t wait – and most of these properties will be listed at essentially the same time. Also, while mortgage rates are still very low, sellers are still likely to have a more limited pool of buyers, as lending standards have tightened. It is significantly harder for buyers with low liquidity to qualify for loans, and most major banks are unwilling to lend more than 80% LTV (20% down). It’s hard to say what effect this will have on prices market-wide. Some agents fear adjustments of 15+% across the board. Noah Rosenblatt of Urban Diggs predicts 10-15% (maybe more for higher priced properties) dip over the summer reflecting closed sales where the negotiations took place during COVID for sellers that had to sell, he expects a bounce back to half those levels over Fall, and then a gradual recovery to pre-COVID levels by next Spring. My expectation lies somewhere in between. I don’t think there will be a sustained drop in prices over 10% for most properties. I think a 5-10% drop for Manhattan resales is a reasonable expectation over the next year, but I expect we will also see significant variations based on product type (co-op, condo, townhouse), location, and price point (higher end affected more than lower end). Homes with lower monthly charges, outdoor space, and washer dryer in unit will likely fare better than others. Price volatility and time to recovery will be impacted by these considerations, and it might take longer than next Spring to see an across the board return to pre-COVID levels. Although we anticipate a normalization of buyer behavior by early 2021, supply may continue to outpace demand as 2020 listings catch up and we potentially see additional new inventory due to the effects of COVID.

While prices and sales volume declined again in the final quarter of 2019, Q4 actually saw the lowest rate of decline since the fall of 2017. An uptick in activity in the last month of the year -- and another drop in interest rates at the start of the year -- hopefully leads to further stabilization in the first half of 2020. Our analysis is below, along with links to Compass’s Q4 Market reports for even more data and details. MANHATTAN A “wait and see” approach by Manhattan buyers, coupled with anxious sellers, continued to weigh down prices this fall. As a result, 2019 price figures settled to their lowest year-end levels in five years, with average price falling 10% to $1.862M and median price—less skewed by high or low prices—slipping 3% to $999K to remain below $1M for a second quarter in a row. Manhattan’s luxury market saw sales over $5M drop 41%. It's important to keep some perspective on these figures: even at the lowest point this year, prices remained nearly 15% higher than ten years ago. While days on market continued to increase, other metrics were neutral or slightly improved relative to the prior year. Manhattan sales volume were almost even with this time last year, and prices in some product types have begun to bounce back. Inventory is lower, and mortgage rates have remained steady. We saw a 1% uptick in resale co-op sales and an 11% boost in new development sales, but overall sales figures were brought down by a 13% drop in resale condo sales. Signed contracts in the final quarter, however, were up from 2018 figures for a third consecutive quarter—improving 4% annually—suggesting that demand, after four years of declines, may finally begin to absorb supply. In a market hungry for improvement, the last quarter’s results leave us cautiously optimistic as we enter the new decade. BROOKLYN Much like the first half of 2019, sales activity in the second half of the year in Brooklyn moderated compared to a very strong 2018, though prices continued to rise. Average price across the borough hit its highest figure in any fourth quarter, and median price did the same, this year hitting a record high of $800,000. While these figures only represent a marginal increase, median price per square foot increased by double-digits in the final quarter of 2019. This reflects a shift towards smaller apartments, as many buyers chose to hold firm on price by opting for smaller homes -- indicative of a greater overall price sensitivity in the market. Properties in the $500K-1M segment made up 36% of inventory in the final quarter, but accounted for 47% of closings, and competition for these units resulted in a 2% higher average price per square foot. For properties priced in the $1-2M range, inventory outpaced closings, but price per square foot increased 6% versus 2018 because units in this price tier were also 5% smaller compared to past years. Properties priced $2M and higher made up just 6% of all recorded sales, and these units offered the largest average discount. The $3M+ segment saw a decrease in average price per square foot, as more of this inventory was made up of townhomes instead of luxury condos compared to last year. Days on market increased for properties over $1M as Brooklyn buyers also lost some of the sense of urgency that has driven the Brooklyn market to record-fast sales in previous years. By product type, co-ops had the smallest market share but moved the quickest, with 42% of listings entering contract in the first 59 days on market. Mirroring a trend across the river in Manhattan, condos (particularly new development), which commanded the highest average price per square foot figures in the borough, were the slowest to enter contract -- just 32% entered contract in the first 59 days, while 32% took 180+ days. #NYCMarketAnalysesTips #BlogPosts #IYTMarketReports

Carnegie Hill is a small section of the Upper East Side with a history of rich culture, architecture, and residents. Home to Museum mile, world-renowned museums such as the MET and the Guggenheim set the standard for the luxurious history and feel of the 12 x 4 block neighborhood. Named after the mansion that Andrew Carnegie built on 91st Street and 5th Avenue (which is now the Cooper Hewitt Museum), other wealthy residents followed suit and their lifestyle survives through the apartments available in the area -- today, Carnegie Hill is full of white-glove co-ops and grand brownstones with beautifully manicured stoops that line the park and surrounding streets. Here are some of the Team’s top picks in the neighborhood for fine dining and museum visits among other can’t-miss stops in the neighborhood. #NeighborhoodSpotlight #BlogPosts

Park Slope is an idyllic Brooklyn neighborhood with tree-lined streets, beautifully manicured stoops, and more brownstones than the eye can see. Located directly next to Prospect Park, Park Slope finds the perfect balance between city life and residential life. The neighborhood is also full of local gems for dining, drinking, and listening to live music. Check out our favorite spots in Park Slope that are well worth a visit. #BlogPosts #NeighborhoodSpotlight