The extremely tight residential rental market in Manhattan may be having a positive impact on sales in Brooklyn. Home sales activity in the Borough of Trees skyrocketed and the median home price showed significant gains, according to a third-quarter market report released today by residential brokerage Prudential Douglas Elliman.

“Brooklyn is showing signs of firm growth,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and preparer of the report. “The key driver of that growth this quarter is the condo market, which I think is benefiting from the high rents in Manhattan combined with the falling interest rates.”

Overall, there were 2,219 sales in Brooklyn during the third quarter, 18.1 percent greater than the number of sales in third quarter of 2010. Simultaneously, median sales price in the third quarter rose 5 percent from the prior-year quarter to $510,000. The growth in those two categories denotes a healthy market, Miller said. [more]

From the October issue: It’s conventional wisdom that low interest rates stimulate home sales, but in today’s roller-coaster economy, conventional wisdom does not seem to apply.

Despite the optimism of real estate and mortgage brokers, analysts say low rates, as a symptom of wider economic malaise, may actually hinder home sales in New York.

“Brokers may use low rates as a reason to [convince clients to] buy, but the flaw with that argument is that you can’t just look at rates and dismiss investors’ confidence,” said Noah Rosenblatt, the founder of Manhattan-based UrbanDigs, a property consulting and analytics firm. The industry headed into autumn with mortgage rates at all-time lows: Freddie Mac reported early last month that 30-year and 15-year fixed-rate mortgages were at historically low levels of 4.12 percent and 3.33 percent, respectively. [more]

Source: Prudential Douglas Elliman (click to enlarge)

In stark contrast from the various economic indicators surrounding it, the
Manhattan rental market showed remarkable stability and strength in the third
quarter. The price of an average Manhattan rental unit increased about 7 percent
from the prior year quarter and remained consistent with the impressive levels
achieved in the second quarter, according to market reports released today by
residential brokerages Prudential Douglas Elliman and Citi Habitats.

“I used to see the rental market as a leading indicator of changing economic
conditions because of how nimble it is,” said Jonathan Miller, CEO of appraisal firm
Miller Samuel who prepared Elliman’s report. “But here the economy is struggling –
or at best, is flat — and conditions are tight in the rental market.” [more]

At the current pace, many New York State homeowners in default won’t live to see the day their property is foreclosed upon. According to Harper’s Magazine data cited by Miller Samuel President Jonathan Miller on his blog Matrix, it would take 61 years for lenders to foreclose on all homes currently in default if the current rate continues.

That can be attributed to the robo-signing scandal which has led state attorneys general to crack down on, and thus slow down, the process by which lenders foreclose on properties. [more]

From left: One57 and Extell Development President Gary Barnett, the Touraine and Toll Brothers CEO Bob Toll and MiMA and Related Companies CEO Stephen Ross

There’s a scarcity of new development in Manhattan, and developers are licking their chops. According to Corcoran Sunshine Marketing Group data cited by the New York Times, by the end of 2011 just 1,111 new units will open in Manhattan south of Harlem. That’s down from 1,767 last year, ad 8,552 in 2007.

That’s good news for developers — such as Extell Development, Related Companies and the Toll Brothers who are delivering One57, MiMA and the Touraine, respectively, to the market — who recognize the scarcity of supply and are raising prices and foregoing concessions. In fact, some developers are even refusing to negotiate with buyers on price. [more]

Penthouses tend to appeal to a tiny pool of potential buyers, and can take years to sell as a result of their lofty asking prices. Still, according to Forbes, sales of luxury residential real estate have been picking up even as the economy remains unsteady.

“Relative to everybody else, the higher-end market is where we’re seeing record purchases and where we’re seeing traction,” says Jonathan Miller, president of appraisal firm Miller Samuel. “It’s not that we’re seeing prices rise, it’s that we’re seeing more activity.”

Cash purchases account for much of this traction. While sales of less expensive homes limp along as a result of ever-tightening mortgage lending practices, the luxury end is comprised of home buyers with cold hard cash to spend, said Miller. [more]

From the September issue: In Manhattan, a doorman is a marker of luxury and status.
But as rents rise in a tough economy, tenants are increasingly willing to go without that friendly face to screen visitors and accept packages if it means staying in New York’s most exclusive borough, industry experts said.
Data shows that the premium that renters are willing to pay for doormen has shrunk dramatically in the past two years. Between 2010 and mid-year 2011, the premium for rental apartments in buildings with attended lobbies dropped 36 percent for studios, 21 percent for one-bedrooms and 18 percent for two-bedrooms, according to a market report compiled by real estate consulting firm and brokerage Nancy Packes Inc., in collaboration with StreetEasy. [more]

From left: Trump Organization Chairman and President Donald Trump, Naftali Group CEO Miki Naftali and Jones Lang LaSalle President of New York operations Peter Riguardi

September marks The Real Deal’s 100th magazine issue (to be posted online tomorrow). In it, we will be bringing you some of the stories that made the biggest impact on us and on the market. In the meantime, here is what some industry execs have to say about The Real Deal’s magazine milestone as well as about what The Real Deal has meant to them in the publication’s eight-year existence. For example, Donald Trump, chairman and president of the Trump Organization, said: “The Real Deal has become more comprehensive in its coverage of the real estate industry in New York City and it has also become a valuable source of information. The Real Deal has done a terrific job.” Compiled by Lauren Elkies

[more]

An upcoming change in mortgage limits could disproportionately affect buyers in New York City because prices are higher than in the rest of the country, the New York Times reported. On Oct. 1, the limit on federally guaranteed loans drops to $625,500 from the current level of $729,750, meaning that buyers in the city and surrounding suburbs will have to come up with larger down payments or have to apply for so-called jumbo loans above $625,000 at higher interest rates.

Because for many buyers neither option may be possible, they are setting Sept. 30 deadlines to close deals before the change. [more]

From the August issue: The gulf between New York City’s real estate market and the rest of the country has always been wide. But that disconnect appears to be growing.

“Manhattan seems to be one of the lucky ones,” said Jonathan Miller, president and CEO of Miller Samuel, who called the Big Apple one of “the best housing markets in the country, relatively.”

For example, Manhattan’s median residential sale price in the second quarter was only 17 percent below the market peak in 2008, according to the most recent report from brokerage Prudential Douglas Elliman, which is prepared by Miller. That’s an improvement from the worst depths of the downturn, when Manhattan prices were 25 to 30 percent below the high, said Miller, who also does market research for Las Vegas, Washington, D.C., Baltimore and Miami. [more]