After Rush to Beat New Tax, Manhattan Luxury-Apartment Sales Slump

July sales plummeted from June levels as new transfer tax took effect

By Josh Barbanel WSJ

In June, sales of luxury residential real estate soared like a Midtown skyscraper as buyers rushed to beat a looming July 1 tax increase.

In July, they plummeted back to earth to the slowest pace in years, according to a Wall Street Journal analysis.

The Park Loggia condo building in New York City. In July, the median sale price of a Manhattan apartment fell to $970,000, the lowest level in four years. PHOTO: MARK ABRAMSON/BLOOMBERG NEWS

Post-Tax Sales SlumpManhattan luxury-home sales fell in July after a new state tax kicked in.Source: WSJ analysis of city property recordsNote: July sales each year; $2 million and up

July sales of Manhattan homes and apartments for $2 million or more shrank to the lowest level for any month in more than six years. It was the slowest pace for such sales in the month of July since 2009.

When residential sales accelerated in June, some brokers said the rush to beat the tax could trigger a broader sales rebound, as buyers who had been hesitating for many months could decide to buy. The market had been weakening for several years.

The new July sales figures cast doubt on that idea and suggest the tax surge simply sped up sales that would have happened anyway. “Consumer behavior is modified by tax-policy change, and this is exactly what we are seeing,” said Jonathan Miller, an appraiser and market analyst.

Mr. Miller said that the July slump may actually be overstating the pace of the slowdown—which he says may be nearing a bottom—after steep price cuts last year.

The new state transfer tax—a one-time payment on any property selling for at least $2 million in New York City ranges from 0.25%, or $5,000, on a $2 million sale, to 3.15% on sales of $25 million or more—triggered a rush to close. The result: Records were set for the most sales above $2 million, above $10 million and even above $25 million.

July represented a reversal, the Journal analysis found. There were 162 sales for $2 million or more in July, 62% of average monthly sales over the last decade. That compares with 685 in June. Total Manhattan sales fell from a record $4.9 billion to just under $1.54 billion, the lowest July total since 2009 and the lowest month overall since 2013.

The new Hudson Yards real-estate development in Manhattan. PHOTO: JUSTIN LANE/SHUTTERSTOCK

Getting Ahead: Manhattan luxury-home sales soared in June and plummeted in July, the month when higher taxes were imposed.Source: WSJ analysis of NYC property recordsNote: Sales for $2 million or more, filed through Aug. 31

The median sale price of a Manhattan apartment fell to $970,000, the lowest level in four years. That was down 40% from the figure in June, which was pushed up by the many high-end sales.

At the same time, sales below $2 million, which weren’t subject to the new tax, chugged along at a steady pace. These sales were up 2.5% from June and were the largest July total since 2015. The analysis includes sales filed through Aug. 31.

Donna Olshan, a broker who tracks the luxury market, said the slowdown has continued. She said the number of contracts signed for properties listed for $4 million or more fell 17% this year through August, including a steep decline this month.

She attributed much of the slowdown to the long-term effects of another change in taxation that increased the cost of owning real estate: federal limits placed on the deductibility of state and local taxes, including on New York’s relatively high property taxes. The new limits took effect in 2018.

“The crisis seems to be going sideways,” she said. Sellers who lower their prices are doing deals, she said, while other listings sit on the market. Many condo developers aren’t lowering prices, but they are telling brokers to “‘just make me an offer,’” she said.

There were 12 transactions for $10 million or more in July, a below-average month, and the lowest monthly total since 2015. The biggest was the $65.75 million purchase of a penthouse at a new condominium at 220 Central Park South by the Gordon M. Sumner, better known as the musician Sting.

But Sting’s 5,845 square foot four-story apartment wasn’t hit by the new tax, since he went into contract on it in June 2016.

The new tax rates took effect on July 1 for most transactions, but the state grandfathered in sales that were in contract by the start of the state’s fiscal year on April 1 at the old rates.

All but one of the $10 million-plus transactions, including eight sales in new developments, were exempt from the new tax.

The only one hit by the tax was the purchase of a three-bedroom co-op by Georgina Bloomberg, a daughter of former New York City Mayor Michael Bloomberg. She paid $10.2 million for an apartment on the 12th floor of 101 Central Park West, a building where she already has a home. She paid an extra $229,400 in taxes because of the higher rates, according to property records.

Market Report July 2019

Manhattan Sales

Manhattan Rentals

Brooklyn Sales

Brooklyn Rentals

Long Island City Sales

Long Island City Rentals

New York claims real estate brokers made $21 million through illegal Airbnb rentals

Sues Metropolitan Property Group for allegedly violating short-term rental laws

By Ben Lane housingwire

A group of New York City real estate brokers made $21 million through a series of illegal Airbnb short-term rentals in flagrant violation of the city’s short-term rental laws, the city claims in a new lawsuit.

This week, New York City sued Metropolitan Property Group along with a number of associated entities and people, claiming that they operated at least 130 illegal short-term rentals in the city over the last several years.

According to the city, Metropolitan Property Group, its owners, and others were repeatedly warned to stop violating the city’s short-term rental laws, but chose to continue to do so, earning more than $21 million in illegal revenue from Airbnb.

In its lawsuit, the city claims that MPG operated illegal short-term rentals in at least five residential buildings the company owns, controls, manages, and operates in Manhattan for at least four years. According to NYC’s lawsuit, the units in those buildings are only allowed to be used as permanent residences.

But, according to the city, MPG’s alleged malfeasance goes beyond just those five buildings.

“Presumably through the relationships Defendant MPG and its real estate agents have allegedly cultivated, they have controlled, managed, operated, offered and advertised illegal short-term rentals within the Subject Buildings as well as at least 30 other permanent residential buildings in Manhattan since at least 2014 with an estimate of at least 130 different apartments converted from permanent residences to transient accommodations,” NYC states in its lawsuit.

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It is illegal under New York law to rent out a unit in most buildings for less than 30 days unless the tenant is present during the time of the rental, but according to the city, MPG frequently rented out entire units on Airbnb.

All in all, the city claims that MPG is responsible for almost 13,700 illegal short-term rental reservations, which generated a total of approximately $21 million in revenue from 2015 to 2018, and deceiving almost 76,000 guests who booked their accommodations through Airbnb.

The city also claims that MPG and its operators went so far as to create 18 additional corporate entities for the purposes of skirting Airbnb’s rules and the city’s laws.

“Defendants MPG and MPG Brokers often utilized identical contact information and inaccurate addresses to set up these numerous distinct Airbnb host accounts and listings, in clear contravention of the online platform’s stated restrictions on the number of host accounts and listing addresses to be utilized by any one individual or entity,” the city claims.

Additionally, the city claims that MPG ignored repeated warnings from the city and others about the allegedly illegal short-term rentals.

“Operator Defendants have ignored actions from some responsible building owners, and the City’s efforts to shut down their illegal short-term rental operations, with their deceptive advertisements on Airbnb still up and available to unsuspecting tourists to this day,” the city states in its lawsuit.

The lawsuit was filed by the city’s Office of Special Enforcement.

“Over and over again, well-meaning visitors are being misled by sophisticated businesspeople into booking illegal rentals. Only with better data and cooperation from the booking websites can we efficiently identify and shut down these operations,” Christian Klossner, executive director of the Mayor’s Office of Special Enforcement said. “Our top priority is preserving housing and a sense of community in New York neighborhoods, and we want guests to feel safe when they visit our city.”

When asked about the lawsuit, Airbnb (which is not a party in the suit) said that the lawsuit provides a “clear example” of the need for new short-term rental laws in the state.

“This case is a clear example of just one thing: the ongoing need for a comprehensive, statewide bill that would provide for strict recourse against the few bad actors while protecting the rights of thousands of regular New Yorkers who are responsibly sharing their home,” Josh Meltzer, head of Northeast Policy for Airbnb, said in a statement. “Airbnb supports legislation in Albany that would do just that and we invite the Office of Special Enforcement to come to the table and work with us on a real path forward.”

The Real Estate Industry Is Fighting New York City’s Historic Climate Bill On Technicalities

It’s a divide-and-conquer approach critics say could weaken one of the most important major pieces of municipal climate legislation in the world.

By Alexander C. Kaufman HUFFPOST

NEW YORK ― The fight over New York City’s landmark bill to slash climate-changing pollution from big buildings began Tuesday at a marathon hearing where the real estate industry and its allies picked apart the legislation, criticizing its strict deadlines and protections for affordable housing.

The bill, called Intro. 1253 and introduced last Wednesday, sets an ambitious timeline for cutting emissions from buildings of more than 25,000 square feet ― the city’s biggest source of carbon pollution ― starting in 2022 and increasing steadily until meeting a 40 percent reduction by 2030. From there, the legislation gives landlords until 2050 to double those cuts.

“We can’t wait anymore,” City Councilman Costa Constantinides, a Queens legislator who leads the council’s Committee on Environmental Protection, said at the hearing. “The time to act is now.”

Waiting, he said, risks leaving “our grandkids the world of ‘Mad Max’ or the world of ‘Hunger Games.’” The bill has nearly two dozen co-sponsors, including Council Speaker Corey Johnson.

It’s a formidable goal from a first-of-its-kind bill that, if passed, would set a new standard for cities around the world and mark the most aggressive climate action yet taken by any municipality, let alone the largest and most economically influential in the nation. But meeting it will be costly, particularly for the real estate industry that dominates New York politics and gave rise to such figures as President Donald Trump.

Challenging the bill outright was never an option. The legislation came from an agreement in August, brokered by the nonprofit Urban Green Council, between the city’s real estate lobby and grassroots activists that set out a framework for cutting emissions 80 percent by the middle of the century. To do so, the agreement outlined a roadmap for requiring landlords to retrofit old buildings with energy-efficient technologies.

An early draft of the legislation nixed proposals to give extra leeway to New York’s dwindling stock of roughly 990,000 rent-regulated apartments. But the final version unveiled last week surprised activists by not only preserving the protections for rent-regulated units but also going beyond the original Urban Green Council framework to call for cuts to be made roughly twice as fast.

The timeline for emissions reductions nearly matches the ambition back-to-back reports from federal and United Nations scientists who said urgent action is needed to wean the global economy off fossil fuels and avert catastrophic global warming in the coming decades.

But the loophole for buildings housing even one rent-regulated apartment ― seen as critical to avoid rent hikes in a so-called Gilded City already facing record homelessness ― could exempt up to a third of the city’s big residential emitters. Instead of requiring expensive retrofits that, even with rent protections, could be legally passed on to tenants in the form of rent increases of up to 6 percent a year, the legislation proposes requiring the same auditing for all buildings over 25,000 square feet that buildings over 50,000 square feet already undergo.

That appeared to anger industry groups, who demanded their own exemptions, and a handful of their environmentalist allies who said the rent-regulated buildings cannot be left behind as the city reins in the environmental footprint of its skyline.

The Real Estate Board of New York, the city’s powerful and deep-pocketed landlord lobby, “supports the bills intention to act quickly and with ambition,” said Carl Hum, a senior vice president of the group.

“But we also want to proceed wisely,” he said, urging a focus on “long-term goals while being cognizant of short-term realities.”

He said he supports the bill’s call for a study of a carbon-trading market based on Tokyo’s cap-and-trade scheme that allows big commercial landlords in the Japanese capital to buy and sell a limited and shrinking number of CO₂ pollution permits. The cap-and-trade market is the only major policy in the world akin to what Constantinides’ bill is trying to do.

For the Greater New York Hospital Association, the 2022 start date represents an “extremely problematic” and “arbitrary timeline” for facilities that stay open 24/7 and require constant lighting and power, according to Andrew Title, the association’s senior government affairs director.

Adriana Espinoza, the New York City program director at the New York League of Conservation Voters, which, with the Natural Resources Defense Council, made up the only major environmental groups opposing the current version of the bill, said, “We share the concern of others over exemptions for buildings with at least one rent-regulated unit. It is likely these buildings and the New Yorkers who live in them are those who would benefit the most” from retrofits.

Looming over the debate is the possibility that the new Democratic majority in both houses of the New York State Legislature next year will pass stronger protections or eliminate Major Capital Improvements ― the program that allows landlords to charge rent-regulated tenants for expensive overhauls ― when rent regulations expire next June. Constantinides said he’d amend the legislation to close the loophole for rent-regulated units if such policy changes occur in Albany in the months to come.

“We need all sectors to participate in the reduction of greenhouse gases in the city of New York ― no sector can be left behind,” he said. “We do not want to create a list of exemptions. We want to make sure every sector participates in a meaningful way.”

He asked the five panelists testifying how many have worked with the NYC Retrofit Accelerator, a free program that advises landlords on making energy-efficiency improvements.

“Just one?” he said with a curt chuckle when a lone hand rose. “OK.”

The accelerator isn’t the only program that could help make the mandated emissions cuts more affordable for landlords. Constantinides sponsored a sister bill to opt New York City into the months-old statewide Property Assessed Clean Energy financial program, which allows building owners to apply for long-term, fixed-rate loans to make energy-efficiency improvements or install solar panels through a voluntary line item on their property taxes.

“We know that many will need help, real help,” Constantinides said.

“No one here is pretending this is going to be easy. We know it’s going to be hard,” he added. “But we also know, as hard as it’s going to be, it’s nothing compared to how hard it’s going to be adjusting to when it’s too late.”

Despite laser-targeted opposition, the bills enjoy strong support from a mobilized coalition of organizations. Nearly 100 demonstrators rallied on the steps of City Hall an hour before the hearing began. They came from groups ranging from working-class stalwarts, such as Democratic Socialists of America and New York Communities for Change; to climate justice advocates such as 350.org, Uprose and the Sunrise Movement. Their signs and chants localized the messaging Rep.-elect Alexandria Ocasio-Cortez helped popularize on federal climate policy, declaring the bills the backbone of a “Green New Deal 4 NYC.”

The stakes for the bill’s passage are high.

Former Mayor Michael Bloomberg attempted to mandate a building retrofit program in 2009, but the effort fizzled. Current Mayor Bill de Blasio twice attempted to mandate emission cuts from buildings, first in 2016 and then again in 2017. But the efforts went nowhere. In September 2017, the mayor released his most detailed plan yet without coordinating with his usual environmental allies on the City Council, alienating lawmakers who were drafting their own bills to cut emissions. They refused to back de Blasio’s proposal.

But de Blasio appears to fully back the bill. When Constantinides asked if the bill represented “the largest emissions reduction policy in the history of this city,” Mark Chambers, the mayor’s sustainability director, cut him off and said, “The history of any city.”

“We can’t let deniers and those with deep pockets whose profits are at risk deter us,” Chambers said. “The science is clear, and we have to cut carbon now, and cutting it from the largest source simply makes sense.”

That could have a huge ripple from a city with a gross domestic product big enough to rank among the world’s 20 largest economies.

In January, the de Blasio administration sued five major oil companies over infrastructure damage from sea level rise. A federal judge tossed the suit in July, but California and seven other big states signed on to the city’s appeal last month.

When the mayor started the process of divesting roughly $5 billion in fossil fuel investments from the city’s pension funds earlier this year, other cities quickly followed.

Over the past month, Ocasio-Cortez took Washington by storm, forcefully rallying current and incoming members of Congress to support her plan to start working on a Green New Deal, a sweeping federal stimulus plan to drastically cut emissions over the next decade and drive up wages by funding renewable energy projects with union wages. But increasing support of that plan beyond the nearly two-dozen lawmakers ― including Sens. Ed Markey (D-Mass.) and Jeff Merkley (D-Ore.) ― will need to be buttressed by local policies like the Constantinides bill, said Randy Abreu, Ocasio-Cortez’s policy director.

“Local policies like this need to happen in every city to give that signal to the federal government that we are ready for this,” Abreu told HuffPost outside City Hall. “We all know the federal government has the resources to make this happen. We just need to show D.C. that this is going to happen.”

WATCH: Inside the nearly completed 3 WTC

Silverstein's FiDi skyscraper slated to open.

By Jhila Farzaneh and Kathryn Brenzel 

A person standing on the 76th-floor terrace of 3 World Trade Center can see four states, at least three bridges and Larry Silverstein’s new apartment at 30 Park Place (sort of).

The 5,300-square-foot terrace is 934 feet above ground and is up for grabs to whoever takes the attached 31,000-square-foot office space. One World Trade Center looks almost close enough to touch from the tower’s tallest terrace, which also provides a panoramic view of Downtown and well beyond. Another terrace on the 60th floor spans 5,300 square feet and will be used by the tenant who takes that space. On the 17th floor, an expansive 11,000-square-foot outdoor space is divvied up evenly between GroupM, the building’s anchor tenant, and the rest of the tenants in the tower.

For now, the most impressive aspects of the new office tower — developed by Silverstein Properties and slated to open June 6 — are arguably its views. Inside, the floors are mostly spacious, column-free concrete boxes. It’ll be up to the tenants to build out the floors, a common practice for new commercial development. But even the bare bones aren’t bad: Each floor features ceiling heights of 13.6 feet and floor-to-ceiling windows. GroupM has opted to maintain the industrial vibe with exposed concrete in parts of its 700,000-square-foot digs. The windows have waist-high ledges — called furniture rails — that serve as a kind of comfort blanket for the acrophobic. (Silverstein’s Dara McQuillan assured TRD staffers on a tour of the building that there’s no risk of falling without the bars).

The tower will be the third of the newly constructed WTC buildings to open, following One WTC, 4 WTC and 7 WTC. Silverstein is still trying to find an anchor tenant for 2 WTC, which lost News Corp. and 21st Century Fox back in 2016. Until then, the site will remain just a foundation created with Norman Foster’s vision in mind.

The building’s lobby sports a 60-foot-high cable-net glass wall, which enables natural light to pour into the space. At that height, use of the steel cables comes as close to an uninterrupted glass curtain wall as you can get, Silverstein’s leasing head Jeremy Moss said during a tour of the building last month. At first blush, the lobby’s walls are reminiscent of the almost reflective stainless steel used for elevator doors. A closer look reveals woven strands of steel that is sandwiched between two pieces of glass, woven in Switzerland by Sefar.

Part of the lobby’s far wall is bright red to show depth, a device the architect Richard Rogers has employed in several of his projects. The facade features another common motif for Rogers: using structural elements of a building as a design feature. The otherwise ordinary glassy facade of the tower is accented by K-shaped bracing on its eastern and western sides.

The 80-story building is 40 percent leased and asking prices range from the $70s to $90 per square foot, Moss said.

“I’m actually hoping that Larry will let us move our offices out of 7 WTC across the street, and over here to 3 World Trade Center,” Moss joked. “I’m going to keep lobbying for it.”

Video produced by Jhila Farzaneh.

Jersey City becomes alternative to New York, but without the 'sticker shock' in prices

• Jersey City is raising its profile as an alternative to New York City, given its closeness to the Big Apple and more reasonable prices.
• New buildings like 99 Hudson offer luxury living at a fraction of the cost.
• Yet some say Jersey City could easily go the way of Brooklyn, which itself was an alternative to Manhattan until everyone began moving there.

Daniel Bukszpan |  - CNBC - Full article here.

Kathleen Elkins | CNBC

A view of Jersey City skyline from an early morning run.

Real estate prices in New York City have cooled but remain astronomically high, so Jennifer Tobias, a senior designer at the Studio Sofield design firm in lower Manhattan, found a nearby refuge.

Located just across the Hudson River from Manhattan's West Side, Jersey City is being touted by some as the latest alternative to New York City's torrid real estate market. It's where Tobias joined a growing number of area residents who find Jersey City more affordable when compared to its more famous neighbor.

"My apartment is a 310 square foot studio in a 28-unit building," Tobias told CNBC recently. Her unit cost $195,000 when she bought it in 2007, and she said that its current value is $312,000.

"A similar apartment in New York City would easily cost twice as much," she added. Her residence faces Van Vorst Park, which has a farmer's market, Shakespeare performances and outdoor movie nights. A wide range of restaurants and bars can be found within an eight-block radius, and the overall cost of living is low.

She isn't only getting a more affordable lifestyle across the river. New York's outer boroughs like Brooklyn and Queens, have traditionally offered lower cost housing. However, prices there have also skyrocketed in recent years, forcing residents of modest means to look elsewhere.

Enter New Jersey, which for years dwelled in the shadow of its larger-than-life counterpart across the Hudson, but has definitively come into its own. Places like Jersey City have emerged as alternatives to the Big Apple for cosmopolitan-minded residents.

'Avoid sticker shock'

According to a real estate report from PricewaterhouseCoopers, Jersey City has established itself as the go-to for people fleeing New York City. Its growth can be attributed to an influx of "highly educated millennials," many of whom work in Manhattan's technology service companies, Pricewaterhouse noted.

"Renters and buyers alike are taking notice and helping to make Jersey City the fastest growing metropolitan area in the state," said Ralph DiBugnara, vice president of retail sales at the New Jersey-based mortgage lender Residential Home Funding.

He cited an average home price of $391,000 and an average rent of $1,500 per month—substantially lower than what Zillow cites as Manhattan's median home price of over $1.3 million, and median rent of $3400.

Agent Gina Castrorao of the New York City-based real estate company Triplemint said that Jersey City's real estate prices depend in large part on proximity to the Hudson River.

"There are rents ranging from $1,200 to $10,000," she said. "Typically, the closer you are to the water, the higher the prices will be."

"It is true that high growth markets like Jersey City do often eventually become victims of their success, and are branded as 'too expensive.'"-John Boyd, president, Boyd Company

Scott Bierbryer, co-founder of the apartment marketplace startup VeryApt.com, said that those who work in Manhattan are well-served by transportation options that offer a short commute into the city.

Those interested in buying luxury property have many options as well. These include 99 Hudson, an 82-story condominium owned by Chinese developers that's currently under construction. When it's complete, the building will offer virtually every amenity residents can get east of the Hudson River, minus the high prices: Unit prices start under $1 million.

"Buyers can avoid sticker shock by saving an average of 10 percent on purchases at 99 Hudson, compared to newer properties in DUMBO, and an average of 38 percent versus Lower Manhattan," said Edwin Blanco, a sales manager with Marketing Directors, who represents the property.
Blanco told CNBC that 99 Hudson has attracted more buyers from Manhattan than any other Jersey City property in his portfolio. They cite the easy commute and spectacular views as the biggest selling points.

David Amsterdam of the global real estate company Colliers International said that Jersey City is also a good deal when it comes to office space. He quoted an overall rent of $72.74 per square foot for Manhattan businesses, as opposed to only $38.98 per square foot in Jersey City.

All of which raises the question of whether Jersey City could soon go the way of formerly reasonably-priced New York neighborhoods like parts of Brooklyn and Long Island City. As soon as the word got out, many of those became trendy, expensive hotspots.

To some extent, that effect is already underway. In nearby Hoboken, median apartment prices are even more expensive than the Big Apple's, data from real estate tracking firm Apartment List shows.

"It is true that high growth markets like Jersey City do often eventually become victims of their success, and are branded as 'too expensive,'" said John Boyd, principal of the Boyd Company, a corporate site selection firm based in Princeton, New Jersey.

"The challenge for developers and politicians in Jersey City is to create a climate where new housing options remain in the pipeline, and incentives are available for re-purposing projects, [such as] converting old industrial and retail into mixed-use housing projects," he said.

However, if Jersey City does eventually become too expensive, Boyd added that new options will always, eventually, present themselves.

"Bayonne, which is getting a new ferry service by the end of this year, is being touted the 'new Jersey City' by many of our clients, because of its lower cost profile and proximity to Manhattan," he said.

The latest NYC market report is ready.

Manhattan Trends:

• In February, Manhattan contracts signed trended downward year-over-year for the third consecutive month.
• Pricing metrics for condos were varied, as average price rose compared to last year, while median price fell.  Meanwhile, pricing metrics for co-ops saw gains, with average and median price both increasing more than 25%.
• Average price-per-square-foot was up for both condos and co-ops.  For condos, the figure hit $2,179 - while it reached $1,515 for co-ops.
• Listed inventory continued to rise, with co-ops seeing more than double the increase of condos.
• Days on market declined dramatically for condos, but rose substantially for co-ops.
• Negotiability increased for both product types when compared to last February, but declined month-over-month.

Brooklyn Trends:

• During February, the Brooklyn market experienced an increase in contracts signed, up 9% versus last year, driven by strong new development sales in southern Brooklyn.
• However, because sales in less-expensive areas of southern Brooklyn were up this month, the borough’s average and median sale price experienced double-digit declines of 12% and 19%, respectively.
• Average price-per-square foot remained unchanged versus February 2017 at $882, but it was up 9% from January.
• The difference from last asking price to sale price was 1% below the average asking price, an improvement from the figure a year ago.
• The average days on market figure - of 105 - was skewed by a few high-priced homes selling after sitting on the market for over two years.

CLICK IN HERE FOR THE FULL REPORT

Where the millennial workforce gathers and why

Some unexpected cities are succeeding in attracting young talent where safe bets like Austin and Seattle fall by the wayside - March 11th - The Real Deal.

The research is in: millennials are settling in some unexpected places to build their careers.

The top 10 metro areas where college-educated millennials gather is supposed to point to strong real estate markets — demarcated by high median house prices — and strong economies, but there are some surprising results in the new geographical rankings, complied by the Brookings Institute.

In response, CityLab ran a correlation analysis to compare the Brookings’ data to generally accepted indicators of talent, technology, diversity and density to find that millennials gather in the same metro areas where older populations of college-educated people already are; where there is a high concentration of people working in artistic and tech-related industries; and are positively co-related with cities that have large LGBTQ and Asian communities.

Here’s a look at the unexpected cities the Brookings Institute ranked in the top 10 for millennial workers. [CityLab] — Erin Hudson

Boston

Madison

San Jose

San Francisco

Washington, D.C.

Hartford

New York

Raleigh

Minneapolis – St. Paul

Denver

I Can See New York From My House!

Right at Home

By RONDA KAYSEN FEB. 23, 2018

If you are considering making the leap from New York City to the suburbs, I have an exercise for you. Call a friend who already lives there and ask her if she thinks she still lives close to New York. She might say something like “It’s like I never left! Practically everyone here is from Park Slope.” After talking to her, you’ll think, “Geez, I’ve really got to get on this!”

And why wouldn’t you? Montclair, N.J., a popular destination for many New York expats, bills itself as the town “where the suburb meets the city” and in these very pages, readers were once told to call Maplewood, N.J., “Brooklyn West.”

But I am here today to dispel the myth. The city is nowhere near the suburbs.

Sure, on a good day, like, say, Sunday at 11 p.m., you can zip from Midtown to your picturesque colonial in 30 minutes flat. But try that trip at rush hour, and there’s a good chance you may have an existential crisis sitting on a bus stuck at a standstill on the helix, the hellish ramp that connects the Lincoln Tunnel to the expanse of New Jersey roads.

Granted, the subway is no picnic for city dwellers, with mornings invariably spent wedged against half of Brooklyn while the train idles in a tunnel. Many of the forces plaguing the subways — crowds, delays and aging infrastructure — are also at play in suburban mass transit. But the biggest difference — and the one suburbanites and their brokers often conveniently forget to mention — is the lag time between rides on trains like New Jersey Transit, particularly during off hours.

Miss a subway, and another one will probably come along soon enough. Miss a train to suburbia, and there you are, hopelessly staring at your Clever Commute app while you nurture an intimate relationship with the bowels of Penn Station. When your train arrives an hour later, the buzz from that ill-timed extra glass of Chardonnay has worn off, and you are left wondering why you even bothered to leave the house.

This is no indictment of suburbia. I fully enjoy the trappings of my suburban life — the schools, the space, the fawns in our backyard. My husband and I bought our house in West Orange, N.J., after first renting 10 minutes away in Montclair. We entered the deal aware that we were forever signing away our previous life in Brooklyn. I accepted the bargain because I like the slower pace and the small-town vibe. But I have also made peace with the fact that the city is no longer at my doorstep, and that my quaint downtown strip is no New York.

I, of course, am not alone. In 2017, home sales hit a 35-year high in Westchester County and a 14-year high in Nassau County, according to Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers and Consultants. “City costs have risen more than the cost of a home” in the suburbs, Mr. Miller said. “We can see that in the massive migration in the last three or four years of city dwellers.”

Over the past 25 years, the number of people commuting across the Hudson River has grown by 28 percent, to 320,000 people a day, with bus trips up 83 percent and nearly tripling the number of rail trips in and out of Penn Station, according to a 2017 Regional Plan Association report.

Companies like PicketFencer and NeighborhoodScout offer services that play destination matchmaker for these newcomers. But until you get here, it’s hard to realize how far you have actually gone. Train and bus schedules are deceptively optimistic. Talk to real estate brokers and they reinforce the rosy narrative, rattling off options — the jitney stops at the corner! There’s a park-n-ride five minutes away! You can walk to the train!

Maps don’t do the situation justice either. Just ask Ilana Dubrovsky, 32. When she was considering moving out of Clinton Hill, Brooklyn, with her husband, Allen Razam, 40, and their two children, she pulled out a map and drew a circle around the city. She limited her search to towns less than an hour away. She settled on South Orange, N.J., where she and her husband bought a six-bedroom house in 2014. “I wanted that access. I wanted to see our friends,” said Ms. Dubrovsky, who works in sales.

Do you want to know how many times she has been to Brooklyn in the past four years? Twice.

“It’s such a pain in the butt,” she said. “I don’t want to put two kids on the train, so then I drive. Last time it took us an hour to get from Bay Ridge to Park Slope. An hour! Do you know how many places I go to in an hour in New Jersey?”

To her surprise, Ms. Dubrovsky, who works from home, found that she did not miss her old stamping grounds. Why battle crowds and traffic to go to Prospect Park when there’s a nature reserve with a zoo and miniature golf up the road? “I just don’t have the patience for the city anymore,” she said.

Her husband, however, a real estate broker and personal trainer, still works in Brooklyn, and leaves the house at 4 a.m. every morning to beat the traffic.

Leave Brooklyn and you trade Sahadi’s grocery for impromptu barbecues with a dozen neighbors. Have you seen the size of the parking lot at Costco? You can really load up on burgers. Join the town pool, and you spread out your towel on the grass — yes, there’s grass at the pool — and wait for friends from the neighborhood to just show up.

The perks make it easier to forget the two miserable hours you spent commuting on the train this morning when a city friend asks what it’s like to live out here. Instead, you focus on the charm. Did I tell you about those cute fawns in the yard? And, of course, there are the happy Park Slope transplants.

This might explain how Jennifer and Mark Loga ended up buying a four-bedroom house in Maplewood last December without realizing how long their new commutes would soon be. “Everything that we heard was that it was really convenient,” Mrs. Loga, 31, told me in January when she was eight months pregnant. It was about three weeks after they had moved from Jersey City. The couple had lived in Brooklyn before that.

“Nobody was like, ‘Yeah, it’s a great area, but your commute is going to be horrible,’” she said. Mrs. Loga works in marketing near Madison Square Park and Mr. Loga, 32, a civil engineer, works in the Financial District. “Did we think it was going to be an hour and a half each way? No.”

Wondering how buyers can arrive here unprepared for what’s ahead, I called Leslie Kunkin, a real estate broker who I met one night in 2010 while trapped on a bus for three hours in a snowstorm. Finally, at 3 a.m., we were dropped off on a deserted Montclair street corner to trudge home in knee high snow. Yet, somehow, the odyssey didn’t completely sour me on the suburbs and Ms. Kunkin sold me my house three years later.

In December, Ms. Kunkin and a group of other brokers started an agency, West of Hudson Realty Group, because Montclair is, you know, west of the Hudson River. “Despite our snowstorm, I stand behind our commute,” she said, describing the commute, on the whole, as “amazing.”

“Sure you get stuck in traffic,” she said. But compared with the subway, the ride to the suburbs “is so much more civilized.”

From Ms. Kunkin’s perspective, a ride where you can usually get a plush seat with some elbow room offsets that rigid train schedule.

I asked Mrs. Loga if she regretted her decision, or if the charm of a conductor who stamps your ticket takes the edge off. “You have all these great things, but it’s the one little blemish,” she said. “If you can deal with it, you’re fine.”

And if you can’t, well, then maybe you end up working from home.

Is Donald Trump's Presidency Helping—or Hurting—His Real Estate Brand?

By Lance Lambert | Feb 20, 2018 - Realtor.com

Ever since President Donald Trump kicked off his unlikely candidacy for the nation's top political office in June 2015 at the foot of the golden Trump Tower escalators in Manhattan, he has become an unabashed hero to millions of Americans—and a pariah to millions more. But long before he was a polarizing politician, he was a brash and publicity-savvy real estate mogul who built one of the world's most recognizable luxury real estate companies.

He spent a half-century building his real estate brand, and two and a half years (more or less) building his political one. We set out to discover what sort of impact Trump the politician—and the many controversies surrounding his presidency—has had on the value of his residential holdings.

“The bottom line of real estate is location, location, location. But that’s not entirely true. It is also perception, perception, perception," says Marc Rudov, president of California-based MHR Enterprises, who advises CEOs on branding.

To see how Trump properties have fared since he ran for office, realtor.com® analyzed sales in all of the U.S. residential buildings listed on the Trump Organization's website that had data available. This 23 apartment or condominium buildings, in seven states, come in many forms: from high-rise towers in Manhattan to luxury beach-side apartments in Miami. Some buildings are high-rises with a mix of apartments, hotel rooms, and street-level stores. (Data were not available for the Estate at Trump National, Los Angeles in California.)

According to our analysis, in 2016, the year that Trump was elected president, the number of sales overall in his buildings fell 7.9% from the previous year. It dropped another 7.9% in 2017, his eventful first year in office.

Meanwhile, the median price of his properties dipped 2.3%, to $972,000, from 2016 to 2017. And that was significantly less than the 8.7% drop from 2015 to 2016. (In the 21 Trump buildings with sales in both 2016 and 2017, 15 experienced a decrease in the price per square foot.)

The prices of units purchased in his buildings fell in New York, Miami, Chicago, and Honolulu—four of his biggest luxury markets—in 2017. Only his combined condo and hotel in Las Vegas saw strong price gains. And only Manhattan and Las Vegas saw an increase in the overall number of sales.

Donald Trump's remarkable skills at branding helped build the Trump empire. But financially speaking, that could be a double-edged sword for the nation's most famous man, who now has a fervent base of supporters and detractors alike. As Rudov says, "If you are thinking about buying a unit in Trump Tower, what will the people in your social circle think?”

But it's not only Trump properties that have seen a slowdown as of late. The luxury real estate market has softened nationally as more ultrahigh-end buildings are coming online around the same time, with fewer foreign buyers entering the fray. This is particularly true in New York City, where the bulk of Trump's residential real estate (and his corporate headquarters) is located. The age and style of Trump's Manhattan buildings may also be working against them in the sales market.

It's important to note that the president's name on a building doesn't mean he owns it. The full extent of Trump's real estate is hard to track, since the Trump Organization is a private company that doesn’t disclose all of its holdings. Just because a building is listed on the organization's website doesn't mean the organization owns it or even a majority stake in it, and there are likely some buildings that aren't listed at all.

Complicating the matter is that Donald Trump often licenses his name for all kinds of things, including to builders and developers. So not every Trump building is owned by the president and his family.

The Trump Organization did not respond to realtor.com's requests for comment.

How are Trump's properties doing in the city that made him famous?

The president cut his teeth on Manhattan real estate. And his glamorous, over-the-top luxury buildings have been synonymous with the city since the 1980s.

“Trump tried to get as much newspaper coverage as possible [early in his career], always pushing his Trump [brand] and the adjective ‘billionaire’ attached to his name or ‘successful real estate developer’ and ‘rich,’”says Gwenda Blair, author of "The Trumps: Three Generations of Builders and a President." “He targeted [buyers] who wanted to show off.”

There are 10 residential buildings in Manhattan, one of the bluest of blue cities, listed on the Trump Organization's website. Five more developments are located in nearby suburbs in New York's Westchester County; Stamford, CT; and Jersey City, NJ.

The total number of sales in the Manhattan buildings were actually up 24.6% in 2017—but median sales prices were down 2.4%. Of these, his prize jewel is the 58-story Trump Tower in midtown, where the price per square foot fell 17.8% from 2016 to 2017. That's the biggest drop of his New York holdings. There were five sales in the building last year, ranging from $1.8 million to $3.6 million.

The 58-story tower, which carries his name in 4-foot-high golden letters, is located in a heavily trafficked stretch of well-off Fifth Avenue next to famed jeweler Tiffany & Co. When it opened in 1983, the edifice and its flamboyant design came to define the wealth, ambition, and unabashed consumerism of Manhattan in that era. At the time the New York Times wrote that the tower "is a clarion call to wealthy outsiders. ... The doormen's scarlet uniforms and white pith helmets—or high black fur hats in the winter months—evoke Buckingham Palace. Ivana Trump had them custom made in London."

The city's democratic bent may be one reason for the famous building's residential drop-off. But another is the U.S. Secret Service putting up 24/7 barricades on the street next to the tower after Trump won the presidential race. And the building started to attract protesters—lots of them.

Dolly Lenz, a luxury real estate agent and founder of Dolly Lenz Real Estate in New York, who has sold many units in the Trump Tower over the years, concedes that the frenetic scene is a turnoff to some potential buyers.

"People just want to be able to go in and out, and not go through X-rays,” she says. “If you’re getting back from a black tie and in your high heels, the car can’t even drop you off in the front.”

“I’ve had buyers who are looking for places in New York, but specifically said they don’t want to live in a Trump building,” adds Daniel Neiditch, president of New York–based River 2 River Realty, a luxury real estate brokerage, landlord, and developer. Buyers might "not feeling comfortable with people screaming in their face. And some may not feel comfortable with his name on their building."

The next biggest price decrease among his Manhattan properties was at the 54-story Trump Palace, a 277-unit condo building on the Upper East Side. The number of sales rose from eight in 2016 to 10 in 2017. However, the price per square foot, a measure of the value of real estate, fell 14.9%, to $1,616.

Outspoken left-leaning commentator Keith Olbermann famously sold his three-bedroom condo in the building for $3.8 million in 2016. After the sale, he tweeted a picture of his keys and this message: “I got out with 90% of my money and 100% of my soul!”

Some buildings chose to remove the Trump name entirely. They included Trump Place, three buildings along the Hudson River on the Upper West Side, where tenants circulated a "Dump the TRUMP name" petition before he was elected. The Trump SoHo Hotel rebranded itself the Dominick Hotel, after a dropoff in business, including several visiting NBA teams that stopped staying at the hotel in protest.

Not every Manhattan buyer was uncomfortable with the Trump name. The city also brought some successes for the Trump Organization last year.

The price per square foot jumped 35.8% in Trump Parc, a former hotel converted into a 38-story condominium tower near Central Park. It was also up 25.2% at Trump Park Avenue, a prewar, 32-story condo building on the Upper East Side.

How are Trump properties faring in the rest of the country?

Nationally, Trump properties generally haven't fared well since his presidential run.

In his five Florida buildings on Sunny Isles Beach, outside of Miami, sales dropped 23.6% from 2016 to 2017. (The price per square foot in these beach-front towers were also down 6.4% year over year, to $678.) These buildings feature all kinds of high-end amenities, including beachfront cabanas, tennis centers, and heated swimming pools.

At the Trump Hollywood, a 41-story condo building located right on Hollywood Beach in South Florida, sales dropped from 10 units in 2016 to just three in 2017. The price per square foot fell 4.2%, to $692. The building features a theater room, wine cellar, and tasting salon along with a library, two spas, and four tennis courts.

An ocean away, at the Trump Tower Waikiki, which offers hotel rooms and condos in Honolulu, the number of sales also fell, by 13.9% from 2016 to 2017. The price per square foot dropped by 8.4% over the same period with the median sold price of $1,240,000.

But Donald Trump did have some bright spots, even in a state that wound up voting for rival, Hillary Clinton. At the Trump International Hotel Las Vegas, a combination hotel and condo tower off the Strip, the number of sales jumped 54.5%, to 51, in 2017. The price per square foot in the building also increased 13.6%, to $511.

But this is no typical Trump property. The median price of the units sold in the building last year was a more modest $265,000, the lowest of any of the properties listed on the company's website. The small, furnished condos are popular with out-of-towners who stay in the units when they're in Vegas, and then have the building's management company rent them out (and arrange cleanings) the rest of the time.

“It’s a great location, it's got phenomenal views, it’s right across from one of the best shopping malls in Vegas,” says Dino Satallante, real estate broker at Queensridge in Las Vegas, who is selling a unit in the building for one of his clients. And "you’re getting a little return on your investment and you don’t have to do anything.”

But some of that rise may also be attributed to the real estate market in Las Vegas, which has been very much on the rise as of late. In December realtor.com ranked Las Vegas as the best housing market going into 2018, with a projected price growth of 6.9%.

The age of Trump's buildings is working against them

Another reason that some of Trump's properties are seeing sales and price declines is their age: They're older than the new crop of luxury buildings. Many of his New York City buildings in particular went up or were renovated in the 1980s or 1990s. So they're competing against a slew of new construction with larger floor plans, the newest amenities, and more modern aesthetics. That makes them a harder sell, say real estate experts.

But despite being older than the newest crop of luxury towers coming online in the past few years, Trump’s units are still among the most prized for their price, says Lenz. Trump's units in Manhattan sold at prices ranging from $551,000 to $15.9 million last year.

“They aren’t super luxury, and their price point reflects that,” Lenz says. But they're immaculate, she adds. “He wants his [real estate] reputation to be sterling.”

Outside of New York City, the Trump Organization has some newer buildings. The Trump International Hotel and Tower in Chicago opened in 2009, a project that cost almost $850 million to construct. At 1,388 feet, it's the fourth-tallest building in the United States.

But the number of sales in the Chicago building dropped from 47 in 2015 to 31 in 2016, and 18 in 2017. And just last year, the price per square foot fell 16.9%, to $756.

“What we are seeing at Trump is atypical of the market," says Gail Lissner, an appraiser and managing director of Integra Realty Resources in Chicago, which tracks 65 residential buildings in the city. That's because the Chicago luxury market is typically more steady without big ups and downs.

"This is one of the nicest buildings in Chicago, despite what people might think of the Trump name," Lissner adds.

The luxury market is softening—not just for Trump properties

Some of the forces working against Trump properties are those affecting the luxury condo market as a whole.

Nationally, it was harder to sell luxury real estate in 2017, as an influx of ultrahigh-end homes have entered the market in recent years. The days that luxury homes sat on the market, a good indicator of the strength or weakness of a market,  increased 5.4%, to 116 days, according to realtor.com data. (We're defining luxury as the most expensive 5% of homes in a given market.)

At the same time, the overall U.S. housing market heated up, with the days on the market falling to 71, a 7.3% drop.

Meanwhile, luxury real estate in Manhattan has taken an especially hard hit over the past few years.

This is partly due to fewer wealthy, foreign buyers, who are big players in the luxury market . For example, the Chinese government has imposed new restrictions making it harder for citizens to buy property abroad. Trump's comments on immigration may also dissuade potential foreign buyers.

Foreign buyers are also typically in the market for second, third, or even fourth or fifth homes. So it's not surprising that Trump’s buildings that cater to secondary home buyers, like Trump Tower, are down the most. The Trump International Hotel and Tower, a building that is home to more primary home buyers, has fared better, Lenz says.

"No perspective purchaser has ever told me they didn’t want to look at or buy a Trump property," says Lenz. “[It's that] luxury is down, not that Trump is down."

Lance Lambert is a data journalist for realtor.com. He previously wrote for Bloomberg Businessweek and the Chronicle of Higher Education.

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