What International Buyers Want and Buy - AM New York

What International Buyers Want and Buy
AM New York 9/26/12

BY Marjorie Cohen

More and more real estate professionals are dealing with international clients, and interviews with some of the most active agents in the city indicate a clear trend.

U.S. Home Prices Rise

U.S. home prices rose again in the 20 city S&P/Case Schiller index in June.  The Case Schiller index showed that home prices rose in 18 out of the 20 markets tracked.  It's still 31% off the peak of 2006.

Eataly

Darren China, architect, an me discussing real estate projects at Eataly.  This rooftop restaurant is amazing.  The restaurants I frequent are the usual 3 or 4 that are kid-friendly.  We each said we'll bring our wives next time.

New York Property Price Trend 4Q 2010

Graph above shows Manhattan New York's property price trend from 1997 through 2010.  Average price per square foot was $328 in 1997 and appreciates to $1058 in 4Q 2010.  This equates to an average annual appreciation of about 10%.

Mortgage foreign investor New York property

Mortgage loan options for foreign buyers of Manhattan New York property.

Visit us at Castle Avenue Partners - Manhattan investment property

Best area in Manhattan for investment

Weimin Tan talks about whether there's a best area for investment in New York. It all depends.

Visit us at Castle Avenue Partners - Manhattan investment property

Roubini buys $5m Manhattan condo

Roubini Buys $5m Manhattan penthouse condo (Curbed)

Nouriel Roubini (Dr Doom) is perhaps the most bearish economist of all.  Predicted housing fall in 2006 and now world famous.  Said US will have double dip etc etc...

Anyway, he just bought a $5m Manhattan penthouse condo!

Manhattan Real Estate: Direct Ownership vs. REIT?

Article as published in Thestreet.com Feb 22, 2010.  Manhattan Property: Direct Ownership vs REITs

Here are some pros and cons to weigh if you're thinking about direct property ownership in Manhattan, such as buying an investment condo or building vs. investing in a real estate investment trust such as Boston Properties(BXP Quote), SL Green Realty(SLG Quote) or Vornado Realty Trust(VNO Quote) that own commercial properties in the area.


No. 1, Liquidity: REIT wins. REITs are liquid and can be bought or sold with the click of a mouse. That's not the case with direct ownership in a condo or building because it takes at least three months to buy or sell.

No. 2, Entry level: REIT wins

America's Most Overvalued Cities - CNNMoney

America's most overvalued cities - CNNMoney


New York, NY (Manhattan) is shown as one of the most undervalued cities.  This is news.


Related links:
New York Investment Property
New York Property
New York Property FAQ
New York Property Price Appreciation History
New York Property articles and media
New York investment property search
Buying New York property

Summary of CBS interview with Political Chick, Lisa Chase

Summary of my interview with CBS's Lisa Chase, The Political Chick, this past Monday.  Topic was state of the residential real estate market.

* In terms of US average, prices should decrease another 10%.  Reasons include:
- glut of foreclosures in the pipeline which will decrease average prices
- expiration of the 1st time homebuyer credit
- higher interest rates as the Fed ends it's mortgage bond buying program in March 2010

* However, real estate is LOCAL and hence one should look at price trends specific to one's local market.

* The Manhattan, New York condo residential market has bottomed in real time.  For example, new development condos traded at $800 per sq ft back in Oct/Nov and then increased slightly.  Real estate market reports will take until Q1 2010 to reflect this as these reports lag 3 months (time it takes to close on a property).  The 4Q 2009 report still shows average prices at $1000 per sq ft.  From this, it's obvious that the coming report will show price declines.

* Manhattan is much less affected by foreclosures and the 1st time homebuyer credit.  I do not feel the Manhattan market will double dip.  Rather, the bottom was here and over.  Transaction volume has been surging, a key signal that the market is finding its bottom. 

* The Obama Making Homes Affordable Program was bad economics.  Should never have started.  It's just delaying the foreclosure process as most intended recipients either have incomes that are too low or own properties that are already too far underwater.

* Over the past couple months, there has been a lot of foreign interest looking to capitalize on Manhattan's downturn. 

Best,
Wei Min
Castle Avenue Partners
New York Investment Properties

Interview podcast at chataboutit.com
New York property articles and media
Buying New York Property
New York Investment Property Search


Website:  http://www.castle-avenue.com/
Blog:  http://www.wealthre.blogspot.com/

Cold Weather Chills Housing Starts - WSJ

Link to article:  Cold Weather Chills Housing Starts


Wei min's comments:

Housing starts should tumble because we are in the midst of a foreclosure glut, real estate crisis and price declines of up to 40%. Just because housing starts were a certain number last year does not mean they should be at the "run rate" this year.

We would be in bad shape if housing starts increased.

Nov 2009 Manhattan residential rental market report

Rental volume picks up as rents drop: report (reported by The Real Deal).  Manhattan vacancy 1.87%

Buyers backing out

Buyers fighting to cancel contracts (The Real Deal)


Where buyers are backing out (The Real Deal)

W Union Square acquired for $2 million

My investors would love this.  W Union Square hotel acquired for $2 million.  But very important note - buyer has to assume $212 million in debt :)

Nov 2009 Manhattan New York rental report

Article as reported by The Real Deal.  Manhattan residential vacancy rate 1.8%

Links:

Castle Avenue Partners - Manhattan property agent

Top New York High Schools rated by USNews

New York High Schools that made US News and World Report's Top 100 America's Best High Schools, December 10, 2009


Newcomers High School Queens County, Long Island City, NY
Gold:#6 of 100

The High School of American Studies at Lehman College Bronx County, Bronx, NY
Gold:#19 of 100

Stuyvesant High School New York County, New York, NY
Gold:#31 of 100

Townsend Harris High School Queens County, Flushing, NY
Gold:#33 of 100

Staten Island Technical High School Richmond County, Staten Island, NY
Gold:#34 of 100

Baccalaureate School for Global Education Queens County, Long Island City, NY
Gold:#35 of 100

Yonkers High School Westchester County, Yonkers, NY
Gold:#41 of 100

South Side High School Nassau County, Rockville Centre, NY
Gold:#46 of 100

Jericho High School Nassau County, Jericho, NY
Gold:#48 of 100

Horace Greeley High School Westchester County, Chappaqua, NY
Gold:#51 of 100

Capital Gains Tax on Property in Manhattan New York

Primary Residence:The IRS allows a seller to sell his primary residence in which he has lived 2 out of the past 5 years and take capital gains tax free of up to $250,000 (for single) and $500,000 (for married filing jointly).

The 2 years out of 5 years rule does not have to be continuous as long as it was used as primary residence during that time. One way an investor can capitalize on this is to buy property, rent it out and move back in for the last 2 out of five years prior to sale.


Investment Property:
Investment property held for more than 1 year will qualify for long term capital gains tax treatment. This means a maximum tax rate of 15% at the federal level. If held less than 1 year, the maximum federal tax rate is about 36%. However, I strongly discourage buying property with the intention of selling in less than 1 year. Buyers should intend to hold at least 5 years.

Many investors use the “1031 exchange” to defer payment of taxes. This requires exchanging the old property for a like-kind new property within a set period of time. Effectively, this strategy uses funds that otherwise would be used to pay taxes to leverage and buy more property, magnifying the return potential.

We will recommend our preferred CPA and attorney to clients so that they receive the best advice.


New York historical price appreciation
New York property articles
New York investment property overview
FAQ
New York investment property search

Contact Wei Min at tan@castle-avenue.com on how we can help you grow wealth through Manhattan property.



With the regulatory and legal environment, I need to provide this disclaimer:
The above serves as a general overview, not by a certified tax or legal professional. Always consult a CPA or attorney for tax matters as individual situations differ.

Reasons to Buy Manhattan Real Estate, published in TheStreet.com

http://www.thestreet.com/story/10613985/1/time-to-shop-for-manhattan-real-estate.html#


Manhattan residential real estate has performed better than that of the US and comparable major cities such as San Francisco and Los Angeles.

For potential buyers including those who are recently married, having an expanding family or the investor who is looking for a hedge against the coming inflation, now is the time to shop. We are in an uncertain period where the Dow is at 10,000 without justifying fundamentals. Unemployment is at 10 percent, dollar is weak and inflation is coming. Relative to the stock market and comparable major cities, Manhattan has performed well. Here are reasons why and why it should continue to do well in the next 10 years.


The Numbers:
While cities like LA and San Francisco have declined more than 40 percent relative to peak, Manhattan’s decline has been much less. Miller Samuel reports that the peak price per square foot was $1,289 in the first quarter of 2008 and declined to $996 in the third quarter of 2009. This represents a 23 percent decline or about half the decline of comparable large US cities.

Third quarter 2009 data shows prices are now declining at a lower rate while transaction volume surged 46 percent, a sign that the Manhattan market is already finding its bottom. I expect it to decline another 10 percent with an eventual U-shaped recovery. But the duration of decline and magnitude have been less than at comparable major cities.

Wall Street firms are expected to pay a record $140 billion in bonus this year, attributable to the stock market, an easing credit market, an increase in deal making and government programs, according to the Wall Street Journal. This is despite the recession and an unemployment rate at a high 10.3 percent in New York City. Regardless of whether these bankers deserve the lavish bonus, this will boost Manhattan real estate prices.

Landlocked:
Manhattan is a landlocked island. While developers in most cities keep expanding outwards, developers in Manhattan do not have this alternative. Yes, we can expand upwards but with such stringent regulations, it is easier said than done.

Capital of the World
Manhattan is a global must-see destination. Emerging markets like Brazil and China are creating wealth at a very high rate and churning out millionaires perhaps by the week. New York is often the first international destination these new millionaires from emerging countries would want to visit. It’s also one of the first places where they would buy investment property or a pied-a-terre.

Diversity of Industries:
While Finance was the dominant industry in New York a decade ago, the current economic landscape is more diverse. Beside Finance, New York is established in Media, Hospitality, Advertising and Professional Services like Legal and Accounting. These industries will be selling to emerging market economies and will benefit the local New York economy in terms of job creation and housing demand.

The City’s unemployment rate was at a high 10.3 percent in August. If not for the diversity of the current New York City economy, the unemployment rate would be even higher. Eastern Consolidated reports that the securities industry lost 1000 jobs in August and a cumulative 31,200 jobs since November 2007. However, sectors like education, health, leisure and hospitality gained jobs which partly offset the negative impact of the financial job losses.

Quality of Life
The air in Manhattan is pristine compared to air in China or Hong Kong. Transportation, although via a 100 year old subway system, is still efficient and dramatically reduces commute time for those living in Manhattan. The legal system is established and there is better work-life balance, again compared to China. These are major considerations for attracting global talent.


What To Do
For the investor expecting the coming inflation, gold is at a high of $1060 an ounce. Of course it could increase to $2000 as per Jim Rogers. However, gold is not income producing. Manhattan residential real estate, backed by the points above, has a net rental yield of 4 percent and still benefits from rental income and price increases. Similar to gold, real estate prices and rental income will increase with inflation. One can live in real estate. There is no practical use for gold.

For the primary residence buyer who is still renting, the value of your saved dollars is getting weaker. The US Dollar Index is now at 75, down from 88 in March, reflecting the world’s pessimism about our currency. Rents will increase. Start shopping for real estate. It’s better than sitting on a pile of cash with weakening buying power.


Contact Wei Min at tan@castle-avenue.com on how we can help you grow wealth through Manhattan property.

CBS's Chataboutit, The Political Chick radio show

First the talking heads said we were in a “W” recovery, and not a “V” recovery, and all were anticipating another shoe to drop in the economy. Now that the Dow Jones crested over 10,000, those “experts” are telling us the economy is on its way back. We all know that the primary underpinnings of the economy are employment and real estate, and both of which are still abysmal. But this sure could be a great buying opportunity for an investment property, right? Wei min Tan, CEO of Castle Avenue Partners (http://www.castle-avenue.com/) will help make sense of where the real estate market stands and where we are headed.

http://chataboutit.com/political-chick-podcast-episode-12/

Mortgages Under 5% - CNN Money

Oct 8, 2009

Freddie Mac said 30yr rate slipped to 4.87%.
Bankrate said 30yr now at 5.2% compared to 6.2% last year.
Mortgage apps surged by 16% last week.

http://money.cnn.com/2009/10/08/real_estate/mortgage_rates/index.htm?postversion=2009100813