This fall, Sara Rotter, a New York City native, became the director of sales for Halstead Property Downtown. Rotter, a former Harvard University student and agent, is a treasure trove of information on the Downtown real estate market—for our year-end issue, Rotter shared her insights on how properties and rentals fared in 2011.
I understand we are still waiting for Halstead’s fourth quarter report, but from the three reports thus far what trends have you noticed in 2011 in the Downtown real estate market?
The fourth market report is due out on January 4.
We did notice a few trends this year. Just to clarify, if you look at our market report and all other major firms, Downtown Manhattan usually refers to 34th Street and south of that. Some classify Downtown as everything from Gramercy Park to all the Villages, Chelsea to Soho and Tribeca.
In general, I can tell you, from what I noticed over the year, that two bedrooms were the hottest commodity. Any two-bedroom property priced between $1.2 to $1.8 million that came onto the market was quickly gone—if it was priced well.
What do you attribute to this popularity in two-bedroom properties?
I think we have a city that is one of the most appealing places to live. It is a true destination to live here; the experience of culture, nightlife, retail, entertainment, and ease of mass transit makes it so livable. People are noticing and are coming back to the city from the suburbs. But we do also have many people upgrading within the city, and these are residents who want to stay here, which I love to see.
What were some of the other trends of 2011?
Another major trend was the rental market is tightening up. Obviously, in the tougher economic time of 2009, the vacancy rate was higher and landlords were offering incentives. That helped dry up the supply. Now that the vacancy rate is straddling one percent or under, there is very low supply and high demand. This was what drove the prices up and is now causing people to stay put. When the rental prices are up, people are less likely to upgrade or move to another rental so the option to purchase becomes that much more enticing. When a rental payment is higher than a monthly mortgage, people sway in favor of purchasing (if they have the down payment).
Another interesting trend was the demand for higher-end properties. We listed two apartments in July for $6 and $7 million. They were marketed separately and as one combination for $13 million. The combination was what sold. It was in contract by September.
We are also noticing a lot more cash purchasers in the marketplace, which could mean that people are investing in real estate over other means of investment. There is also a definite increase in demand for new developments. Since there are not as many available Downtown, they are selling very well. We have also noticed that a large increase in foreign investors have come back into the market.
How does 2011 stack up against 2010?
People were still a bit hesitant last year, whereas this year, there was more buyer confidence. The bidding wars have come back within specific price points. Downtown is a price-sensitive market; if you are priced well, the property should sell quickly. Others will most likely sit on the market unless it is a “one of a kind” home.
For the buyer who is looking to set up roots Downtown but still wants to make a smart buy and get a good deal, where is a good place to buy?
I think a really great area is anywhere near The Highline, especially the northern part of Chelsea, which is seeing a real resurgence. Before The Highline was developed, the area was very unique but in the last two years it has been remarkable to what has been developed. The Highline is a draw to both New Yorkers and visitors.
The Meatpacking District is always a smart buy. I also think that is an area that will develop some more. Also the area between the West Village and Soho is still underdeveloped. In general, for the amount of un-renovated space that you can come by in Soho to rent or buy, you may still do very well in that area on a price per square foot basis, if you’re willing to do the work.
Do you think the area is going through a resurgence?
It is for sure. I love this market. I have been offered to work in other areas, but I’ve never wanted to leave. The resurgence or the market trending up doesn’t surprise me; this is an extraordinary place to live. There is so much variety Downtown and each neighborhood has distinct character with its own unique architecture. There is so diversity, from the way people live, the retail to the style of each neighborhood. This is what makes it, in my view, one of the most enjoyable places to live in the city.
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