Since 2006, real estate website Streeteasy. com has provided NYC families access to market information that matters to them— even allowing users to search virtually all of the city’s listings according to criteria such as zoned public school or specific building amenity. We spoke with Streeteasy’s founder and CEO Michael Smith, a downtown father of four, to get the scoop on the city’s current sales and rental market.
In recent years, there’s been a trend toward families staying in the city, rather than having their 2.5 kids and heading for the suburbs. Has the recession affected that trend at all?
Private schools on the New York side versus property taxes elsewhere make the costs a wash. It’s all about the personal choice of lifestyle and the value one places on interior space.
What would you say are the city’s hottest neighborhoods right now— particularly for families?
The Upper East Side, Upper West Side, and Tribeca have always been the first neighborhoods families consider when looking for a place to live. However, there are lots of other neighborhoods that have good value and are rich in resources that are great for families. I would consider Chelsea, Greenwich Village, Morningside Heights, as well as Battery Park City and the Financial District.
Have you seen the recession affect the decision to rent versus buy?
Absolutely. For those considering staying long-term—a minimum of five years—it’s
definitely worth buying. However, with the recession and so many who are
uncertain of what their future might hold, many have put off buying and
have continued to rent. Renting allows consumers to stay more liquid in
a time of uncertainty.
How would you describe the rental market in NYC right now?
In
late 2008 and 2009, we saw median rents dropping by 10 percent year
over year across the board, and landlords were offering potential
renters all kinds of incentives, like three months free rent. Now we are
seeing median rents holding steady, and in some areas, they are slowly
creeping back. Rents are not as negotiable as they were a year ago.
There are still incentives, but ultimately, rental prices are still low,
and incentives are typically a small portion of the total cost. Focus
on the real cost.
For families who are ready to buy, how would you describe the sales market right now?
The
sales market is steadily recovering from the financial crisis of late
2008. The first half of 2009 was poignantly painful—the number of
closings dropped by 50 percent, and median prices dropped by almost 20
percent compared to 2008. But the market started to show signs of life
toward the latter half of 2009. Prices have been stabilizing this first
half of the year, and the number of closings has been increasing
steadily. However, prices and volume of closings are about 20 percent
below 2008 levels. Certainly in NYC, there is always strong demand for
real estate. Where prices are headed will depend on buyers’ confidence
and whether or not they can obtain financing.
Financing seems to be a key issue. How should potential buyers approach financing?
Before
you start looking for an apartment, check your credit report and make
sure there aren’t any errors on the report that might lower your score.
The next thing you should do is get pre-approved for a mortgage. This
will determine how much apartment you can afford.
What about potential sellers? How can they make the most of the current situation?
As
a seller, it is really important to make sure your apartment is priced
correctly when it hits the market. If it’s priced too high, your place
will stagnate on the market. There have also been situations where
apartments are under contract and the banks do not appraise the
apartment to match the contracted value. This may result in
renegotiation of pricing mid-contract.
Once buyers know what they can afford, what key information should they look for on Street- Easy.com?
On
our site, users can see the history of a listing, like how long a
property has been on the market, what kind of price cuts it’s had, and
even how much the current owner paid for the property. This information
can help you make an educated offer to the seller. And when considering a
property, make sure to look into the financial health of a building and
if there are any planned assessments in the future that might affect
your affordability.
What advice do you have for families considering buying into a new development?
Definitely
do your research. Who is the developer? What other projects have they
done in the city? Who is the builder? Have they completed projects on
time? What percentage of the building is sold out? Depending on whether
or not the building is new construction or a conversion, they will need a
minimum number of contracts signed for the offering plan to be declared
effective. And, the building will need to be at least 51 percent
sold-out if banks will approve a mortgage for a buyer.
Once they establish the financial health of the building, what else should they look at?
On
our site, users can look for listings a number of different ways. For
example, you can just enter a school, such as PS 41, into our search bar
and this will pull up all the sales and rental listings zoned for that
school. You can also search by amenity. For many parents, an elevator,
doorman or in-unit laundry will be a requirement.
When
considering an apartment, find out about the management company and try
to meet the super. You want to make sure that they will repair things
in a timely way. And I would suggest walking by the apartment at night
to see what the neighborhood is like and what the building is like,
since that’s when most people are home. Searching by zoned school might be tricky right now.
Are you following the NYC public school rezoning/overcrowding issues?
We
have been following this closely and have worked with various people to
look at the changes in the housing mix that are having a very real
impact on overcrowding. The situation in Lower Manhattan has improved
because of the pressure and solutions, which came largely from parents.
Hopefully the city will eventually do a better job of being proactive
and will use better data to predict enrollments, particularly in
neighborhoods which have significant residential development.
For more information, visit streeteasy.com
