Senior Vice President, Associate Broker
Sotheby’s International Realty
The Dow is rising, the European Central Bank is moving forward, and interest rates are on an upward trend. All three forces signal one thing for Manhattan residential real estate: stability, stability, stability!
These key economic events are major decision-making factors for our domestic buyers and sellers. I am convinced that they are a harbinger of a renewed market confidence, currently translating into increased sales, especially at the top end of the market.
Today, the main factor influencing Manhattan residential real estate and fueling our sales surge is the international buyer. Foreigners are not as influenced by the Dow, or even rising interest rates, as we are. Rather, they are keenly focused on the dollar’s value on the world stage, recognizing that the U.S. is a proven safe investment haven. These buyers will become increasingly important for us as two of our senators are currently preparing to introduce a bipartisan bill that would give residence visas to foreigners who spend at least $500,000 on residential real estate in the United States.
Worth noting—I have secured deals with three international billionaire buyers this quarter for $250 million in one building alone. These mega-buys are from floorplans as the building is still under construction. New development has roared back to life from its recessionary slumber and there appears to be no lack of eager buyers.
The climate is good news for buyers and sellers, alike. I see it at the Field Team every day. Sales are up and inventory is decreasing. Current conditions are encouraging for our local buyers and sellers and the international investors are giving us the added fuel to keep our developers building. The economy is growing sufficiently, suggesting that Manhattan luxury real estate has proven its resiliency yet again. I look forward to representing our clients in the new market stability and delivering more record-breaking sales.
Vice President and Brokerage Manager
Sotheby’s International Realty
Greenwich has long been considered one of the most desirable towns in southern Fairfield County. Recently, it has been experiencing the benefits of the economic recovery at a faster pace than other parts of the nation. While affected by the downturn of 2008, Greenwich was not hit as hard as much of the country. Its natural beauty and plentiful amenities, excellent public and private schools, and close proximity to Manhattan by train have made the town increasingly attractive to many homebuyers. The true fundamentals that draw people to Greenwich remain.
Two important factors deeply affect and preserve property values in Greenwich, enhancing its desirability. Greenwich is a well-run town, carrying very little municipal debt, which translates into low property taxes, especially for such an affluent place. This makes the houses here particularly attractive, especially when compared to the higher taxed towns that surround it. These factors, coupled with sound planning, have helped to preserve the beauty and graciousness of the town, preventing overdevelopment and maintaining Greenwich’s New England charm.
Recently, Sotheby’s International Realty has witnessed a surge in activity for Greenwich properties priced over $10 million. Since January of this year, we have closed, put under contract, or are in final negotiations on multiple properties asking $12 to $15 million. This well exceeds 2011 activity during this same period. As a company that dominates this segment of the market and leads in overall sales volume in Greenwich, we witness all of this first and view these sales as a strong indication that the upper end of the market is gaining strength. (According to the MLS, Greenwich only saw seven sales at $10 million and above in 2011.)
Additionally, there remains a very active market for properties offered at $1 to $3 million, a range in which both the median and average prices reside. The highly sought-after Old Greenwich and Riverside neighborhoods of Greenwich are also very busy, having witnessed multiple bidding wars for properties in all price ranges in the last few months.
President and CEO
Daniel Gale Sotheby’s International Realty
Not too long ago, we touted trophy home sales and saw record appreciation in residential sales year after year.
Well, the market changed. A ripple of bad housing news for the likes of Florida, Nevada, and California grew with “short sales” and foreclosures that doomed and gloomed, ultimately hitting the New York City area after the collapse of Lehman Brothers.
As we celebrate our company’s ninetieth anniversary, currently celebrated as Long Island’s premier firm, we see a very encouraging trend emerging from a market that, perhaps, faltered more than most we’ve experienced in years past for the North Shore. As the leader of a company that dominates this area I want to be clear that I am bullish, but cautiously so. We do not foresee a full or traditional housing recovery until prices are, indeed, on a slow and steady incline.
Although I seldom credit Washington for anything too proactive, the economic force of the Fed’s unprecedented effort to reduce mortgage rates and keep them low has finally made a difference. The economic gain for borrowers has overshadowed the importance of other stimulus efforts, being impactful when it comes to buying a house.
Low rates have actually pumped up many consumers’ ability to save money. Combine that with growing employment and increasing consumer confidence, and we have what almost feels like a perfect storm—without the storm. Remember, too, there exists an abundance of “all cash” buyers. But, without consumer confidence, a good stock market, and properties priced competitively, they often sit on the sidelines.
Fortunately, today’s consumer feels better and can invest in stocks or a home again. We see multiple offers at the “right” price. The alternative of no-yield cash or low-yield T-bonds is becoming less attractive as the Dow climbs and housing stabilizes. We at Daniel Gale Sotheby’s International Realty have renewed enthusiasm for both the present and the future market, knowing full well that strategic pricing and targeted local and global marketing will continue to play an important role in our success.
Sotheby’s International Realty
This year in the Palm Beach real estate market, a very different scenario from last year has unfolded. First let’s look at the rental market. We usually have a fair number of rentals during the season, but this year in preparation for the Palm Beach season, people began flocking to our beautiful and idyllic island to find that perfect rental for the time they planned to spend here. The volume of rentals was truly staggering and, by the time December 1st came along, it was very slim pickings for decent seasonal rentals. In addition, there have been more annual rentals than we have seen previously and a number have options for multiple annual renewals.
Next, let’s look at the sales market. Although residential sales started off a little more slowly than last year, it is important to keep in mind that our selling season lasts well into June, and the current volume of pending sales is approximately two and a half times our 2012 sold volume, suggesting that we will see strong sales numbers for the balance of the year. Also worthy of note is the fact that the number of days that properties are on the market has declined dramatically and properties are selling at a much smaller discount to the asking price than they were last year. This, of course, is largely due to sellers pricing their properties more realistically. In short, these factors signal that the residential market in Palm Beach is turning out to be far healthier than we have seen in a number of years.
Condominium sales are following a similar pattern to residential sales with a strong number of pending sales of very high-end properties. As with residential properties, days on the market have decreased and the discount to asking prices has narrowed.
All in all, we feel very optimistic about the market and believe that this year will produce strong results, especially in the Palm Beach area.
From the April 2012 issue of Quest Magazine.