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.

QE3 and property

QE3 is the Federal Reserve Bank's recently announced initiative to buy $40 billion of mortgage backed securities per month indefinitely until the economy improves.  The main goals of QE3 are to (i) improve the housing market by decreasing mortgage rates and boosting housing demand (ii) stimulate the economy by pumping money into the financial system.  The Fed hopes this would spur business investment and hiring.

Manhattan Apartment Sales Highest Since Crash

The Wall Street Journal, in the article Manhattan Sales Continue To Climb, reported that Manhattan apartment sales is at the highest level since the crash.

Sales in the third quarter of 2012 was up 9.3% compared to last year.  This is also the highest sales pace since the third quarter of 2008 when a financial crisis was triggered by the collapse of Lehman Brothers.

Goldman Sachs' Lloyd Blankfein is long real estate

Bloomberg reported today that Goldman Sachs' CEO Lloyd Blankfein is long real estate amid anti-deflation actions by central banks globally.  Given that asset prices are expected to increase, Blankfein said,"I accept that invitation to have higher asset prices, and so I would go long more the real assets."

Manhattan condo prices up as supply shrinks

Manhattan condo prices continue to increase as supply is at the lowest level in years, according to Crains New York.  432 Park Avenue, which will be the city's tallest residential tower, is now increasing average asking price to $5,800 per square foot.  This is three years before scheduled completion.

Bill Gross' prediction for stocks and bonds

Bill Gross, PIMCO bond king, wrote the following in his recent August Investment Oulook - Cult Figures.

1.  From 1912 to 2012, stocks had a real return of 6.6 percent per year and this is fading.  This 6.6% return will be hard to replicate in the future because two drivers that contributed to corporate profits are already at historical lows (i) labor costs (ii) corporate taxes.  Bond returns are fading as well.  The Barclays U.S. Aggregate Bond Index currently yields only 1.8%.

2.  Today, a diversified portfolio comprising stocks returning a nominal 4% and bonds returning a nominal 2% may produce an aggregate portfolio return of 3%.  After inflation, it becomes zero.  Bill Gross goes on to say that assumptions of 5-6% real returns used by portfolio and pension fund managers are unrealistic.  Realizing this, policymakers' solution will be to inflate ourselves out of the predicament.  But growth from inflation is not real growth as people will realize.

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.

Buying a townhouse in New York

Process for buying a townhouse in New York.

Our clients who decide to buy a townhouse in New York realize the advantages of owning a building include having potential air rights, owning the land and having substantially larger space than owning an apartment.  A client may decide to buy a single family townhouse or buy a small multifamily building where they have primary residence in one unit and have other apartments within the building rented out for investment income.

Manhattan Property Attracts Buyers from Hong Kong and China

Cover Story:  Manhattan Property Attracts Investors From Hong Kong and Mainland China
Hong Kong and mainland investors see the Big Apple as a less risky place to buy

Wednesday, 29 August, 2012, 12:00am

Peggy Sito

Hong Kong resident Jacky Yeung is going to complete the purchase of two Manhattan flats in one go.

Like many buyers of New York property, the purchases were made, he said, based on the drawcard of the city's status as an international financial centre.